Jackson v. Locust Medical: Statutory Damages Defeat a Rule 23(b)(2) Telemarketing Class

Background

The plaintiff filed a one-count TCPA class complaint against a small medical supply company in March 2022. The case management order set March 31, 2023, as the deadline to amend pleadings and join parties.

Discovery showed the company bought telemarketing leads from a third-party vendor, which cut off communication after the owner's April 2023 deposition. The plaintiff's subpoena efforts led him to believe the vendor was a shell controlled by a foreign entity. The one produced contract between the company and the vendor imposed lead criteria, including consent, but did not expressly require TCPA compliance. The company did not monitor the vendor's compliance, kept no internal TCPA procedures, and continued using similar vendors during the case.

In 2024, the plaintiff moved to amend the complaint to add the owner as a defendant, alleging that the company had hidden its lack of assets until February 2024. He also moved to certify a 23(b)(2) class.

Amendment Denied

Because the deadline had passed, Rule 16(b)(4) required good cause, measured by diligence. The plaintiff's brief addressed only Rule 15, and the court said it could deny the motion on that failure alone. It went on anyway. The plaintiff had known the owner's identity since at least January 2022, before filing suit. The deposition revealed one office and two employees. As for the deposition statements the plaintiff called deceptive, the court held that failing to ask follow-up questions does not excuse a lack of knowledge. "It is not this Court's job to rescue Plaintiff from his own strategic choices and lack of diligence."

The court also addressed joinder under Rule 19(a)(1)(A). Assuming corporate officers can be personally liable under the TCPA, an open question in the Third Circuit under City Select Auto Sales v. David Randall Associates, the owner's absence did not prevent complete relief against the company.

Certification Denied

The court went directly to Rule 23(b)(2), noting the plaintiff likely met Rule 23(a). Under Wal-Mart Stores, Inc. v. Dukes, Rule 23(b)(2) does not authorize certification when class members would each be entitled to individualized monetary awards.

The plaintiff's briefing focused on injunctive relief, but the complaint sought damages, and the complaint controls. TCPA statutory damages of $500 to $1,500 per violation belong to each class member and are not incidental to an injunction. With 647 proposed members, a single willful call each approaches a million dollars, and the plaintiff claimed thousands of members. That "strongly suggest[s] this is a case driven by money, not equitable relief." The damages were also not capable of mechanical computation. The court noted other courts reaching the same result in TCPA cases.

Practical Points

• Plaintiffs: Name individual defendants before the amendment deadline, and pursue a Rule 23(b)(3) class when the complaint seeks statutory damages.
• Defendants: A 23(b)(2) motion in a damages case is vulnerable under Dukes.
• Everyone: Thin vendor contracts and no monitoring were part of this record. They are better addressed before a case is filed.

Read the Middle District of Pennsylvania memorandum opinion.