Gene v. Biopay

• Decision Date: 22 October 2010
• Docket Number: No. 09-31191.,09-31191.
• Parties: GENE & GENE, L.L.C., Individually and as Representative of the Class, Plaintiff-Appellee, v. BIOPAY, L.L.C., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

624 F.3d 698

GENE & GENE, L.L.C., Individually and as Representative of the Class, Plaintiff-Appellee, v. BIOPAY, L.L.C., Defendant-Appellant.

No. 09-31191.

United States Court of Appeals,Fifth Circuit.

Oct. 22, 2010.

COPYRIGHT MATERIAL OMITTED.

John Powers Wolff, III, Christopher Keith Jones, Keogh, Cox & Wilson, Ltd., Philip Bohrer (argued), Bohrer Law Firm, Keith D. Jones, Baton Rouge, LA, for Plaintiff-Appellee.

David Boies Sharpe (argued), Miles Channing Thomas, Scott R. Wheaton, Jr., Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Middle District of Louisiana.

Before CLEMENT, SOUTHWICK and HAYNES, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

In this second interlocutory appeal pursuant to Rule 23(f) of the Federal Rules of Civil Procedure, BioPay, L.L.C. (BioPay) challenges the district court's grant of Gene & Gene, L.L.C.'s (Gene) motion to re-certify a class. As in the first interlocutory appeal, Gene & Gene LLC v. BioPay LLC, 541 F.3d 318 (5th Cir.2008) ( BioPay I), we REVERSE and REMAND.

I. BACKGROUND

The Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227 et seq., prohibits sending unsolicited advertisements from one fax machine to another. Id. at § 227(b)(1)(C). Between 2001 and 2005, BioPay used a third-party contractor to send over 4000 fax messages advertising its services to potential clients in Louisiana. Gene is the owner of Marcello's Wine Market, a business that allegedly received a single, unsolicited fax from BioPay. Gene filed this class-action suit against BioPay alleging that BioPay violated the TCPA by sending unsolicited faxes to Gene and an unidentified number of class members. After discovery, Gene moved for class certification, proposing to define the class as:

All recipients of unsolicited telefacsimile messages and/or advertisements within the State of Louisiana which were transmitted and/or initiated by or on behalf of BIOPAY, L.L.C., between the dates of January 21, 2001, and through the present.

The named Class shall not include any recipients from whom the Defendant has received the prior express invitation or permission to receive the telefacsimile advertisements.

BioPay I, 541 F.3d at 323 n. 5. The district court certified the class, determining that it met the requirements of Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure. Gene & Gene, LLC v. Biopay, LLC, 240 F.R.D. 239, 241-46 (M.D.La.2006). BioPay brought an interlocutory appeal under Rule 23(f) and we “reverse[d] the district court's certification of the class and remand[ed] this case for further proceedings not inconsistent with this opinion,” holding that “the determinative question of whether consent can be established via class-wide proof must, given the particular facts of this case, be answered in the negative.” BioPay I, 541 F.3d at 329.

On remand, Gene immediately moved to reopen discovery. BioPay opposed the motion. The district court referred the matter to a magistrate judge, who reopened discovery “on the limited issue of class certification ....” BioPay appealed the magistrate judge's order to the district judge; BioPay also alternatively requested that the district court stay the proceedings and certify the question of whetherBioPay I intended “to allow plaintiff a second bite at the class-certification apple” for immediate appeal to this court under 28 U.S.C. § 1292(b). The district court affirmed the magistrate judge's decision and declined to certify the question for interlocutory appeal. Gene & Gene, L.L.C. v. Biopay, L.L.C., No. 05-121-JJB, 2008 U.S. Dist. LEXIS 97404, at *2 (M.D.La. Nov.21, 2008).

Gene then issued additional discovery requests. Specifically, Gene requested the electronic production of a FileMaker Pro database ¹ in its native format and BioPay complied. BioPay had previously produced a Microsoft Excel report exported by the FileMaker Pro program, but not the database itself. The FileMaker Pro database included a field not contained in the Excel report entitled “Sales Notes.” Gene & Gene, LLC v. BioPay, LLC, No. 05-121-JJB, 2009 WL 6598001, *4, 2009 U.S. Dist. LEXIS 128256, at *14-15 (M.D.La. Nov. 10, 2009). Notably, the district court found that although the Excel report did not include the “Sales Notes” field, it did contain the “ ‘Fax Permission’ field, a field that appears every bit as important as the neglected field.” Id. *5, 2009 U.S. Dist. LEXIS 128256, at *15-16. In addition to the Excel report, BioPay had previously produced selected printed screenshots from the FileMaker Pro program. The screenshots include the FileMaker Pro report for Marcello's Wine Market and show the “Sales Notes” field and its associated comments. After obtaining the FileMaker Pro database, Gene found it now had the “ability to easily generate a list of all [BioPay contacts] who: (1) do not have the Fax Permission box checked, (2) have no comments or entries in the Sales Notes field, and (3) whose information was obtained solely from a purchased list, among other search criteria or source information.”

In BioPay I, we framed the critical substantive issue as “whether BioPay's fax advertisements were transmitted without the prior express invitation or permission of each recipient.” BioPay I, 541 F.3d at 327. In its decision to re-certify the class, the district court agreed with Gene that the FileMaker Pro database creates a common method of establishing the issue of consent. Gene & Gene, 2009 WL 6598001, at *3, 2009 U.S. Dist. LEXIS 128256, at *11. Finding that “the unique facts of the Database create common questions of consent,” the district court held that common issues predominated individual questions under Rule 23(b)(2) and ultimately re-certified the class as “contacts that BioPay obtained from purchased lists, but only including those contacts that BioPay has no record of communicating with before transmitting a facsimile advertisement.” ² Id. at *1, 2009 U.S. Dist. LEXIS 128256, at *4. In the same order, the district court declined to impose sanctions on BioPay for its failure to disclose the FileMaker Pro database in its native format during the original class certification litigation, finding “it appears that BioPay attempted to comply with its discovery obligations in good faith.”

Id. at *5, 2009 U.S. Dist. LEXIS 128256, at *16. BioPay timely appealed.

II. ANALYSIS

Whether BioPay I Left Open the Possibility of Re-Certification on Remand

1. Standard of Review

We review “de novo a district court's interpretation of our remand order, including whether the law-of-the-case doctrine or mandate rule forecloses any of the district court's actions on remand.” United States v. Elizondo, 475 F.3d 692, 695 (5th Cir.2007). This case, however, is before the court pursuant to a Rule 23(f) interlocutory appeal. The version of Rule 23(f) in effect at the relevant time stated that “[a] court of appeals may permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order.” Fed.R.Civ.P. 23(f) (2007). “The text of the rule makes plain that the sole order that may be appealed is the class certification; no other issues may be raised.” Regents of the Univ. of Cal. v. Credit Suisse First Boston (USA), Inc., 482 F.3d 372, 380 (5th Cir.2007) (quotations omitted). In Regents, however, the court also noted that “review of the factual and legal analysis supporting the district court's decision is appropriate on review of class certification ....” Id. at 381. Because the district court's analysis of our mandate in BioPay I was a predicate for class re-certification, we consider its interpretation of the mandate.

2. Analysis

The law of the case doctrine provides that “an issue of law or fact decided on appeal may not be reexamined either by the district court on remand or by the appellate court on a subsequent appeal.” Fuhrman v. Dretke, 442 F.3d 893, 896 (5th Cir.2006) (quotations omitted). Exceptions to the doctrine allow reexamination of issues decided on appeal only if “(i) the evidence on a subsequent trial was substantially different, (ii) controlling authority has since made a contrary decision of the law applicable to such issues, or (iii) the decision was clearly erroneous and would work a manifest injustice.” Id. at 897. The law of the case doctrine applies to matters decided on interlocutory appeals. Royal Ins. Co. v. Quinn-L Capital Corp., 3 F.3d 877, 881 (5th Cir.1993). The doctrine is “based upon sound policy that when an issue is once litigated and decided, that should be the end of the matter.” United States v. U.S. Smelting Refining & Mining Co., 339 U.S. 186, 198, 70 S.Ct. 537, 94 L.Ed. 750 (1950); see also Fontainebleau Hotel Corp. v. Crossman, 286 F.2d 926, 928 (5th Cir.1961) (quoting U.S. Smelting). The principles surrounding the law of the case doctrine apply equally to the mandate rule, “which is but a specific application of the general doctrine of law of the case.” United States v. Lee, 358 F.3d 315, 321 (5th Cir.2004) (quotations omitted). “Absent exceptional circumstances, the mandate rule compels compliance on remand with the dictates of a superior court and forecloses relitigation of issues expressly or impliedly decided by the appellate court.” Id.

BioPay first argues that BioPay I is the law of the case and that it forecloses further discovery on remand and class re-certification. Gene, as it did in its motion to reopen discovery below, relies heavily upon the continuing duty of district judges to assess class certification orders under Rule 23(c)(1)(C) to justify the reopening of discovery and its second attempt at class certification. Rule 23(c)(1)(C) provides that “[a]n order that grants or denies the class certification decisionmay be altered or amended before final judgment.” While this rule vests...