“Junk Fax” Case Determined Not To Make Junk Law, Strengthens Post-Spokeo Standing and Rule 67 Mootness Arguments

In a world pushed forward by new technology, it’s a “junk fax” case that advances two case dispositive TCPA defense bar arguments: (1) a plaintiff lacks Article III standing post-Spokeo unless there is a sufficient injury-in-fact; and (2) a Rule 67 deposit moots a class action.

In A Custom Heating & Air Conditioning, Inc. v. Kabbage, Inc., 2017 U.S. Dist. LEXIS 93134 (N.D. Ill. June 16, 2017), a plaintiff offers an Illinois district court a penny for its thoughts about the defendants faxing unsolicited advertisements.  Only that penny would apparently have been better spent covering plaintiff’s damages from the fax, which the Court valued at a penny per fax.  The Court dismissed the plaintiff’s conversion and state law consumer protection claims because the plaintiff’s injury (even when combined with the injuries of the class) was insufficient as a matter of law.  The Court did not analyze the issue as a post-Spokeo standing argument and failed to analyze the issue in the context of the plaintiff’s TCPA claim, but the Court did use language that may apply to a post-Spokeo lack of standing argument in the context of a TCPA claim.

The Court also weighed in on whether defendants may utilize Rule 67 and Rule 68 compromises to moot a TCPA class action claim. While the Court agreed with the majority of opinions holding that a Rule 68 offer of judgment does not moot a class action claim, it also strongly suggested that Rule 67 is an available avenue for defendants aiming to moot a class action for lack of subject matter jurisdiction, citing Fulton Dental, LLC v. Bisco, Inc., 2016 U.S. Dist. LEXIS 118658 (N.D. Ill. September 2, 2016).  The pro se defendant did not file a Rule 67 motion, but the Court went out of its way to explain that a properly filed Rule 67 motion, coupled with the unconditional furnishing of funds pursuant to a court order and the offer of a monetary or injunctive judgment in favor of the plaintiff, would moot both the individual and class claims.  While the majority of courts still hold that Rule 67 does not operate to moot a class claim, this old school fax case could introduce a new wave of jurisprudence on the issue.  The Court openly invited the defendant to file a Rule 67 motion and raise the mootness argument again, and we will update this post should the defendant do so.

Robert Schultz

Robert Schultz

Bob is an associate in the Trial Group who represents individuals and businesses at every stage of the litigation process, combining big-picture thinking with attention to detail to obtain favorable results. His practice focuses on complex litigation, international arbitration, and appellate cases. He is particularly experienced in pre-trial motion practice and large-scale discovery.

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