Blow v. Bijora, Inc.

• Decision Date: 04 May 2017
• Docket Number: Nos. 16–1484 & 16–1608,s. 16–1484 & 16–1608
• Citation: 855 F.3d 793
• Parties: Nicole BLOW, individually and on behalf of all others similarly situated, Plaintiff–Appellant, Cross–Appellee, v. BIJORA, INC., doing business as Akira, Defendant–Appellee, Cross–Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

855 F.3d 793

Nicole BLOW, individually and on behalf of all others similarly situated, Plaintiff–Appellant, Cross–Appellee,

v.BIJORA, INC., doing business as Akira, Defendant–Appellee, Cross–Appellant.

Nos. 16–1484 & 16–1608

United States Court of Appeals, Seventh Circuit.

Argued October 28, 2016

Decided May 4, 2017

Dana Perminas, Attorney, Messer, Stilp & Strickler, Ltd, Chicago, IL, for Nicole Blow.

James K. Borcia, Attorney, Tressler LLP, Chicago, IL, for Bijora, Inc., an Illinois Corporation, doing business as Akira.

Before Ripple, Kanne, and Rovner, Circuit Judges.

Rovner, Circuit Judge.

In May 2011, Nicole Strickler brought this class-action lawsuit against Chicago-based retailer Bijora, Inc., doing business as Akira.¹ Strickler was later replaced as named plaintiff by Nicole Blow, who alleged that Akira's practice of sending promotional text messages violates the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1–12, and sought approximately $1.8 billion in damages. The district court ultimately certified a class of individuals with a series of Illinois telephone area codes who had received automated texts from Akira in the preceding four years. After Strickler filed her third amended complaint, Akira impleaded the company that supplied its software for the text transmissions, Opt It, Inc. Opt It then settled its claims with Strickler, who was replaced by Blow as the named plaintiff in the suit against Akira. On Blow and Akira's cross motions for summary judgment, the district court ultimately granted summary judgment in favor of Akira after concluding that Blow had failed to demonstrate that Akira used an automatic telephone dialing system in violation of the TCPA. Blow appeals, and Akira cross-appeals, challenging the class certification and renewing its request for sanctions against Blow's counsel for alleged misconduct and frivolous filings. As detailed below, we affirm the judgment of the district court, although on different grounds.

I.

In 2002, Eric Hseuh founded Chicago-based apparel retailer Akira. The boutique women's clothing and accessory store has continued to expand since that time and now boasts over twenty retail locations in the Chicagoland area. In 2009, Chicago-based software company Opt It, Inc. approached Akira and offered its text marketing services to the clothing chain. Akira hired Opt It to use its software text-messaging platform to connect with Akira customers and inform them of promotions, discounts, and in-store special events such as parties. Using a variety of methods, Akira gathered its customers' cell phone numbers for Opt It to key into its messaging platform. Specifically, Akira customers could opt in to its "Text Club" by providing their cell phone numbers to Akira representatives inside stores, by texting the word "Akira" to an opt-in number posted in Akira stores, or by filling out an "Opt In Card." The card stated that, "Information provided to Akira is used solely for providing you with exclusive information or special offers. Akira will never sell your information or use it for any other purpose."

Opt It's software platform used a fairly straightforward system to deliver text messages to Akira customers. First, customers' cell phone numbers were loaded onto Opt It's text messaging system platform. Those numbers given directly to an Akira employee were manually entered into the system, and the numbers customers texted directly to the opt-in number were automatically added to Opt It's platform. Akira could then manage its promotional text messaging system using Opt It's web interface, where an Akira employee could log in and draft a message to be sent to its text club customers. The Akira employee drafting the message then had the option to send the message immediately or set a future date and time for the message to be sent to all of the saved numbers. If Akira decided to change or cancel a message intended for future delivery, it could access the system and alter the message before it was sent or delete it altogether.

Akira gathered cell phone numbers for over 20,000 customers for its text club messages. From September 23, 2009 until May 27, 2011, Akira sent some sixty text messages advertising store promotions, parties, events, contests, sales, and giveaways to those 20,000 customers, including appellant Nicole Blow.

Blow was chosen as class representative after problems arose with her two predecessors. The original named plaintiff, Nicole Strickler, worked as an attorney for the law firm filing the complaint, Messer & Stilp, Ltd.² Strickler's connection with the firm emerged after the class had been certified, and Messer had filed a second amended complaint asserting claims against Akira and Opt It. Opt It then moved to disqualify the firm based on its failure to disclose that Strickler worked there. Strickler, through Messer, ultimately settled with Opt It and dismissed her claims against it. Meanwhile, Akira had moved to adopt Opt It's motion to disqualify Messer, which requested time to find a substitute class representative. It solicited two additional plaintiffs from the class, Nicole Blow and Jennifer Glasson. When it came to light that Glasson had never received Akira's texts, Glasson voluntarily dismissed her claims and Blow continued as the sole named plaintiff.

Blow's two count third-amended complaint alleges that Akira violated the TCPA's prohibition against using an automatic telephone dialing system to make calls without the express consent of the recipient. On behalf of the class, Blow claims over $1.8 billion in statutory damages, a figure that includes treble damages for alleged willful and knowing violations of the TCPA. See 47 U.S.C. § 227(b)(3). Both parties moved for summary judgment. Akira also moved, among other things, to decertify the class and for sanctions against Blow under Federal Rule of Civil Procedure 11. After concluding that the software platform Opt It used to send text messages was not an autodialer as prohibited by the TCPA, the district court granted summary judgment to Akira. That conclusion rendered the remainder of Akira's pending motions moot, with the exception of the motion for sanctions, which the court denied. Blow appeals the district court's grant of summary judgment to Akira, and Akira cross-appeals the district court's denial of its motions for class decertification and for sanctions under Rule 11.

II.

We consider first the district court's grant of summary judgment to Akira. We review the district court's decision on cross-motions for summary judgment de novo. E.g. , Selective Ins. Co. v. Target Corp. , 845 F.3d 263, 266 (7th Cir. 2016). Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The ordinary standards for summary judgment remain unchanged on cross-motions for summary judgment: we construe all facts and inferences arising from them in favor of the party against whom the motion under consideration is made. Calumet River Fleeting, Inc. v. Int'l Union of Operating Eng'rs, Local 150, AFL–CIO , 824 F.3d 645, 647–48 (7th Cir. 2016). Because we are considering whether the district court appropriately granted summary judgment to Akira, we resolve all factual disputes in Blow's favor. If Blow "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial," summary judgment must be granted. Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

As relevant here, the TCPA prohibits making "any call" without the prior express consent of the recipient "using any automated telephone dialing system" ("autodialer") to "any telephone number assigned to a paging service [or] cellular telephone service." 47 U.S.C. § 227(b)(1)(A)(iii) ; see also Campbell–Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 666–67, 193 L.Ed.2d 571 (Jan. 20, 2016). It is uncontested that text messages to a cellular phone constitute "calls" within the purview of § 227(b)(1)(A)(iii). Campbell–Ewald , 136 S.Ct. at 667 ; see also In Re Rules & Regs Implementing the TCPA , 18 FCC Rcd, 14014, 14115 ¶ 165 (2003) (confirming that § 227(b)(1)'s prohibition against autodialing "encompasses both voice calls and text calls to wireless numbers including, for example, short message service (SMS) calls"). Congress conferred on the Federal Communications Commission ("FCC") the authority to "prescribe regulations to implement" the TCPA. 47 U.S.C. § 227(b)(2) ; see also id. § 201(b) ("The Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this chapter."). Violations of the TCPA may be redressed by a private right of action for damages, § 227(b)(3), which consist of either $500 for each violation or recovery for "actual monetary loss" resulting from the violation, "whichever is greater," id. at § 227(b)(3)(B). The TCPA authorizes treble damages if the defendant "willfully and knowingly violated" the Act. Id. at § (b)(3); Campbell–Ewald , 136 S.Ct. at 667. Based on these provisions, Blow seeks $1,500 for each of the 1,200,000 texts sent for a total of over $1.8 billion in statutory damages.

The district court's conclusion that Akira was entitled to summary judgment was premised on its determination that Akira, through Opt It, had not used an autodialer to send the promotional text messages to Blow and the other class members. Before considering whether Opt It's platform was an autodialer, we must confront Blow's argument that Akira "admitted" in the district court to using an autodialer. This argument arises from one of Akira's responses to a request for admission by Blow.

Between the complaint and requests for admission in discovery, Blow sought on six...