Local Baking Products, Inc. v. Kosher Bagel Munch, Inc., 421 N.J. Super. 268 (App. Div. 2011). The Telephone Consumer Protection Act, 47 U.S.C. §227 (“TCPA”), prohibits the sending of unsolicited faxes. The TCPA allows recipients of unwanted faxes to sue the sender, and to recover $500 or actual damages, whichever is greater, for each violation.
The question in this case was whether plaintiff could bring its TCPA claim as a class action, on behalf of several thousand others who allegedly received the same fax. Writing for the Appellate Division panel, Judge Carchman concluded that a class action was not available. That decision affirmed a ruling of the Law Division. The Law Division awarded plaintiff $500 on its own behalf.
Judge Carchman surveyed prior New Jersey cases, as well as cases around the country, in state and federal courts, that had addressed whether a TCPA claim could be brought on a class basis. Previous New Jersey cases, all unpublished, had rejected class treatment. Cases in other jurisdictions were deeply divided, as Judge Carchman carefully enumerated. Some states, such as Georgia and Louisiana, had cases going both ways.
Ultimately, the panel affirmed the reasoning of the Law Division, which was that a class action was not “superior” to an individual trial in adjudicating TCPA claims, as required by the class action rule, Rule 4:32-1(b)(3). Whatever might be the case under the procedures in other states or in federal courts, New Jersey affords a speedy Small Claims process that allows a TCPA plaintiff to proceed without a lawyer and get a result promptly. Both the cost of litigating and the actual damages, which both the Law Division and Judge Carchman agreed were “about two cents worth of paper and maybe a little ink and toner,” were far less than the $500 statutory damages available to an individual.
Finally, “the same facts required to prevail on an individual TCPA claim– an unsolicited fax was received from a sender with whom the recipient had no prior business relationship– are identical to the facts that would have to be proven to identify merely a single class member.” There was “no superiority in such a situation.”
This decision puts New Jersey’s state courts firmly in the camp of those who reject TCPA class actions. The nationwide debate about this issue, however, will doubtless continue.