Anderson Office Supply, Inc. v. Advanced Med. Assocs., P.A.

Decision Date16 March 2012
Docket NumberNo. 105,868.,105,868.
PartiesANDERSON OFFICE SUPPLY, INC., a Kansas Corporation, Individually and as the Representative of a Class of Similarly Situated Persons, Appellee, v. ADVANCED MEDICAL ASSOCIATES, P.A.,andJeffrey L. Drake, d/b/a Drake Chiropractic, Appellants.
CourtKansas Court of Appeals

OPINION TEXT STARTS HERE

Syllabus by the Court

1. In most circumstances an appellate court's task in an interlocutory appeal is to answer certified questions rather than to rule on the propriety of all underlying orders made by the district court.

2. When a certified issue in an interlocutory appeal is inextricably intertwined with other issues that do not meet the criteria for an interlocutory appeal, an exception to the rule limiting review to certified questions is recognized. Under the exception, the intertwined issues may also be reviewed to allow meaningful review and promote judicial economy.

3. Except as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of the enactment of 28 U.S.C. § 1658(a) (1990) may not be commenced later than 4 years after the cause of action accrues.

4. Since the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq., was enacted in 1991, the statute of limitations set forth at 28 U.S.C. § 1658(a) applies to claims made under it in Kansas state courts.

5. The district court has substantial discretion in determining whether a class should be certified, but the court's decision must be rigorously analyzed in light of the provisions of K.S.A. 2010 Supp. 60–223.

6. The district court is not required to conduct “a mini-trial” with extensive fact-finding before certifying or denying certification of a class. It must only rigorously analyze the proffered evidence to determine whether the plaintiffs have met or are likely to meet the statutory requirements for certification.

7. In making a claim under the Telephone Consumer Protection Act, it is not necessary for a plaintiff to prove a facsimile transmission was received by the plaintiff, but the plaintiff must demonstrate that a facsimile transmission was unlawfully sent by the defendant.

Lynn W. Hursh, Casey O. Housley, and Gerald A. King, of Armstrong Teasdale LLP, of Kansas City, Missouri, for appellants.

Rex A. Sharp and Barbara C. Frankland, of Gunderson, Sharp & Walke, LLP, of Prairie Village, Phillip A. Bock and Tod A. Lewis, of Bock & Hatch, LLC, of Chicago, Illinois, and Brian J. Wanca and Ryan M. Kelly, of Anderson + Wanca, of Rolling Meadows, Illinois, for appellee.

Before GREENE, C.J., HILL, J., and MICHAEL E. WARD, District Judge, assigned.

HILL, J.

This is an interlocutory appeal of a district court's certification of a class action lawsuit that seeks recovery for claims made under the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (2006). The technical questions raised by the appellant about the certification of the class, such as precertification discovery and commonality, are controlled by a recent Kansas Supreme Court decision concerning the Act and, thus, we affirm the rulings of the district court in accordance with that opinion. Besides the usual questions that concern the propriety of the class certification, this appellant also raises the issue of the applicable statute of limitations: either the federal 4–year limit or the state 1–year limit. Through the exercise of pendent jurisdiction, an appellate court may entertain additional questions in an interlocutory appeal as an act of judicial economy. Here, if the state statute applies, then there is no need for class certification. If the federal law controls, then the class action proceeds. Exercising pendent jurisdiction and being persuaded by the majority of other states that have addressed the issue, we hold that the federal 4–year statute of limitations applies to all actions in Kansas arising under the Telephone Consumer Protection Act. Applying the federal statute promotes the intent of Congress and avoids the problems that arise from limitation borrowing.

The action begins after the transmission of unsolicited advertisements sent via facsimile.

Jeffrey Drake owns Advanced Medical Associates, P.A., d/b/a Drake Chiropractic. Advanced Medical contracted with Business to Business Solutions to send fax advertisements to other businesses in the region close to Advanced Medical. Business to Business created an advertisement and, with Advanced Medical's approval, successfully delivered it to more than 5,000 telephone fax numbers in December 2005. Advanced Medical paid $268 to Business To Business for this service.

On November 2, 2009, Anderson Office Supply Inc. filed a class action petition against Advanced Medical in the Harvey County District Court. Anderson alleged that under the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq., entities are prohibited from having an agent send unsolicited fax advertisements. Anderson claimed Advanced Medical violated the Act on December 13, 2005, when Business To Business (on Advanced Medical's behalf) transmitted a fax advertisement to Anderson. Anderson therefore requested monetary relief and an injunction preventing further unlawful action by Advanced Medical. After that, Anderson asked the court for certification of the class under K.S.A. 2010 Supp. 60–223.

Both parties agree this case was filed after Anderson's counsel, while prosecuting another Telephone Consumer Protection Act case involving Business To Business, obtained Business To Business' archived computer files containing fax numbers that ultimately identified the class members in this case. Advanced Medical had concerns about the validity, authenticity, and accuracy of the electronic information obtained by Anderson's counsel, so it filed a memorandum opposing the motion for class certification and requested the opportunity for discovery related to the electronic information before any class was certified.

The district court denied Advanced Medical's request, reasoning that further discovery regarding the class members did not prevent class certification at that time because this type of discovery could be conducted while preparing the case for a trial on the merits. The court then granted class certification after finding the proposed class met the requirements of K.S.A. 2010 Supp. 60–223(a) and certified the class under K.S.A. 2010 Supp. 60–223(b)(1)(A) and (b)(3). In doing so, the court rejected Advanced Medical's basis for opposing class certification—that the proper proceeding for an action such as this is small claims court, not a class action.

Then, Advanced Medical applied for permission to take an interlocutory appeal under K.S.A. 2010 Supp. 60–223, raising four issues: (1) whether the district court abused its discretion in certifying the class, (2) whether the district court abused its discretion in denying precertification discovery, (3) whether the class claims were barred by the Kansas statute of limitations, and (4) if certification was appropriate, whether it should have been limited to certification under K.S.A. 2010 Supp. 60–223(b)(1)(A).

Resolution of the statute of limitations dispute is crucial to this litigation. When Anderson filed the class action petition in the district court, it alleged that the fax advertisement at issue was transmitted on December 13, 2005. Advanced Medical then moved for judgment on the pleadings, arguing that under the Kansas statute of limitations—K.S.A. 60–514(c)—actions upon a statutory penalty must be brought within 1 year. The petition was filed on November 2, 2009—more than 1 year after the fax was transmitted. In response, Anderson argued the federal, 4–year statute of limitations applies in these actions—so its claims were timely made.

The district court agreed that the federal statute of limitations applies and denied Advanced Medical's motion. After noting Kansas had not determined which statute of limitations applies in Telephone Consumer Protection Act cases, and other states have ruled on both sides of the issue, the district court found that the majority of states apply the federal statute. The court believed that the rationale offered by the majority outweighed that offered by the minority.

This court has pendent jurisdiction to decide which statute of limitation applies.

Anderson argues this court lacks jurisdiction to consider the applicable statute of limitations because Advanced Medical took its appeal under K.S.A. 2010 Supp. 60–223(f)—which permits an appeal from an order granting or denying class action certification. Thus, in its view, this court may only consider arguments regarding the certification of the class in this case—and cannot consider any argument about the applicable statute of limitations. Obviously, the question whether this court has subject matter jurisdiction is a question of law over which we exercise unlimited review. Cypress Media, Inc. v. City of Overland Park, 268 Kan. 407, 414, 997 P.2d 681 (2000).

The doctrine of pendent jurisdiction controls this issue. In explaining the concept of pendent jurisdiction, our Supreme Court in Williams v. Lawton, 288 Kan. 768, 784, 207 P.3d 1027 (2009), said: [T]he permissible scope of an interlocutory appeal ... is not necessarily limited to the precise questions that may have been certified by the district court and an appellate court may have supplemental interlocutory jurisdiction.”

The Williams court elaborated:

“Although there is little Kansas case law considering this concept, pendent or supplemental interlocutory jurisdiction was found to exist in Cypress Media, Inc. v. City of Overland Park, 268 Kan. 407, 997 P.2d 681 (2000). In Cypress Media, this court recognized that in most circumstances an appellate court's task in an interlocutory appeal is to answer certified questions rather than to rule on the propriety of all underlying orders made by the district court. 286 Kan. at 414 ; see Adams v. St. Francis Regional Med. Center, 264 Kan. 144, 151, 955 P.2d...

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