Ballard RN Ctr., Inc. v. Kohll's Pharmacy & Homecare, Inc.

• Decision Date: 06 November 2014
• Docket Number: No. 1–13–1543.,1–13–1543.
• Parties: BALLARD RN CENTER, INC., f/k/a Ballard Nursing Center, Inc., Plaintiff–Appellee, v. KOHLL'S PHARMACY AND HOMECARE, INC., Defendant–Appellant.
• Court: United States Appellate Court of Illinois

22 N.E.3d 137

BALLARD RN CENTER, INC., f/k/a Ballard Nursing Center, Inc., Plaintiff–Appellee

v.KOHLL'S PHARMACY AND HOMECARE, INC., Defendant–Appellant.

No. 1–13–1543.

Appellate Court of Illinois, First District, Fourth Division.

Nov. 6, 2014.

Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, and Julie Clark, all of Edelman, Combs, Latturner & Goodwin, LLC, of Chicago, for appellee.

Amir H. Tahmassebi and Lucas Sun, both of Konicek & Dillon, P.C., of Geneva, for appellant.

OPINION

Justice BILL TAYLOR

delivered the judgment of the court, with opinion.

¶ 1 In this interlocutory appeal, defendant Kohll's Pharmacy & Homecare, Inc. (Kohll's), appeals the trial court's decision to grant class certification to plaintiffs.

¶ 2 On March 3, 2010, plaintiff Ballard RN Center, Inc. (Ballard), allegedly received an unsolicited one-page fax from Kohll's which advertised corporate flu shot services. Ballard filed suit against Kohll's, seeking statutory damages under the Telephone Consumer Protection Act (47 U.S.C. § 227 (2006)

) (TCPA) and the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/2 (West 2010) ), and also damages for conversion of ink and paper. Ballard additionally filed a motion for class certification, requesting that the court certify a class of all parties who, on or about March 3, 2010, were sent unsolicited advertising faxes by Kohll's. Discovery showed that on March 3, 2010, Kohll's sent the fax at issue to a total of 4,760 fax numbers and successfully transmitted it to 4,142 of them.

¶ 3 The trial court granted Ballard's motion and certified the class on April 15, 2013. Kohll's appeals this certification order. For the reasons that follow, we affirm in part and reverse in part.

¶ 4 I. BACKGROUND

¶ 5 On April 20, 2010, Ballard filed its complaint, which was styled “Complaint—Class Action.” The complaint alleges that on March 3, 2010, Ballard received an unsolicited fax from Kohll's, although Ballard had no prior relationship with Kohll's and had not authorized the sending of fax advertisements from Kohll's. It alleges that the fax did not provide an “opt out notice” as required by the TCPA even when faxes are sent with consent or pursuant to an established business relationship. It further asserts, on information and belief, that the fax from Kohll's was part of a mass broadcasting of faxes and Kohll's had transmitted similar unsolicited fax advertisements to at least 40 other persons in Illinois.

¶ 6 A copy of the fax is attached to the complaint. The fax is a one-page document advertising “Corporate Flu Shots.” At the bottom of the page, under the heading “Removal From List Request,” the fax states, “If you have received this information in error or if you are requesting that transmissions cease in the future, please notify the sender to be removed as the recipient of future transmissions.” It then provides contact information by fax, phone, and email.

¶ 7 Ballard's complaint seeks relief in three counts. Count I seeks relief under the TCPA, which prohibits the use of any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine (47 U.S.C. § 227(b)(1)(c) (2006)

) and provides that a private plaintiff can bring suit for violation of the TCPA for $500 in statutory damages, with treble damages for willful or knowing violations. Count II seeks relief under the Consumer Fraud Act (815 ILCS 505/2 (West 2010) ), alleging that Kohll's unsolicited fax advertising constituted “unfair acts and practices” in the course of trade and commerce. Finally, count III, for conversion, alleges that by sending unsolicited faxes, Kohll's converted to its own use ink and paper that belonged to Ballard and the class members.

¶ 8 On the same day that Ballard filed its complaint, it also filed a “Motion for Class Certification.” In that motion, Ballard requested that the court certify the following classes:

“All persons and entities with facsimile numbers (1) who, on or after April 20, 2006, or such shorter period during which faxes were sent by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., (2) were sent faxes by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., promoting its goods or services for sale (3) and who were not provided an ‘opt out’ notice that complies with federal law. (Count I )

All persons and entities with Illinois fax numbers (1) who, on or after April 20, 2007, or such shorter period during which faxes were sent by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., (2) were sent faxes by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., promoting its goods or services for sale (3) and who were not provided an ‘opt out’ notice that complies with federal law. (Count II )

All persons and entities with Illinois fax numbers (1) who, on or after April 20, 2005, or such shorter period during which faxes were sent by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., (2) were sent faxes by or on behalf of defendant Kohll's Pharmacy & HomeCare, Inc., promoting its goods or services for sale (3) and who were not provided an ‘opt out’ notice that complies with federal law. (Count III )”

The motion contains no factual allegations in support of class certification. It states that “[p]laintiff will file a supporting Memorandum of Law in due course”; however, it appears that no such memorandum was ever filed.

¶ 9 On June 28, 2012, Kohll's filed for partial summary judgment on count I of Ballard's complaint. In its motion, Kohll's alleged that, on three separate occasions, Kohll's tendered an unconditional offer of payment consisting of a sum that covered all damages Ballard might be entitled to under the TCPA. According to Kohll's, Ballard's counsel summarily rejected this tender while giving no legal basis as to why additional damages were due under the TCPA. Kohll's further asserted that Ballard had not yet filed a motion for class certification. Based upon these allegations, Kohll's argued that Ballard's TCPA claim was moot under Barber v. American Airlines, Inc., 241 Ill.2d 450, 455, 350 Ill.Dec. 535, 948 N.E.2d 1042 (2011)

, which holds that a named representative's claim is moot in a class action when the defendant tenders the amount of damages the plaintiff seeks before the representative files a motion for class certification.

¶ 10 Attached to Kohll's motion are three letters sent by Kohll's to Ballard. The first, dated June 29, 2011, includes a check for $1,600; the second, dated June 5, 2012, includes a check for $1,500; the third, dated June 28, 2012, includes a check for $2,500. All three of these offers were rejected by Ballard and the checks returned to Kohll's.

¶ 11 Ballard filed a response to Kohll's motion for summary judgment in which it acknowledged that Kohll's had correctly stated the holding of Barber but denied that Barber applied to its case, since Ballard had filed a motion for class certification concurrently with the filing of its complaint on April 20, 2010.

¶ 12 Kohll's filed a reply in which it argued that the April 20, 2010, motion was an incomplete “shell” motion that was legally insufficient to satisfy Barber. In this regard, Kohll's pointed out that Ballard had never presented that motion to the court or set a hearing date. Kohll's also stated that Ballard filed the April 20, 2010, motion before discovery had been conducted and therefore had no knowledge of the class.

¶ 13 On November 29, 2012, the trial court denied Kohll's motion for partial summary judgment, stating that Kohll's did not make its tender prior to the filing of Ballard's class certification motion. It reasoned that “Barber requires only that a motion for class certification be filed. It does not require that it meet any certain standard.”

¶ 14 Ballard then filed an amended motion for class certification, stating, “Having conducted discovery, Plaintiff has revised and limited the Class Definition from that included in its original motion for Class Certification * * *.” According to Ballard, discovery showed that Kohll's had contracted with a list service provider known as Red Door Marketing to purchase thousands of fax numbers of businesses located throughout the United States. Discovery also showed that Kohll's sent its “Corporate Flu Shots Blast Fax” to 4,760 fax numbers on the list, and 4,142 of those fax transmissions were successful. A Westfax invoice for services performed on March 3, 2010, indicates exactly which transmissions were successful. Based upon these facts, Ballard submitted the following proposed class definition: “(a) all parties (b) who, on or about March 3, 2010, (c) were sent advertising faxes by Defendant (d) and with respect to whom Defendant cannot provide evidence of consent or a prior business relationship.”

¶ 15 On April 15, 2013, the trial court granted Ballard's motion and certified the above class. Kohll's now appeals this certification order. See Ill. S.Ct. R. 306(a)(8)

(eff. Feb. 16, 2011) (allowing permissive interlocutory appeals from orders granting class certification).

¶ 16 II. ANALYSIS

¶ 17 On appeal, Kohll's argues that class certification was improper under section 2–801 of the Code of Civil Procedure

(735 ILCS 5/2–801 (West 2010) ), which sets forth the prerequisites for the maintenance of a class action. Under section 2–801

, an action may only be maintained as a class action if the following conditions are met: (1) numerosity (the class is so numerous that the joinder of all members is impracticable); (2) commonality (there are common questions of law and fact among the members of the class that predominate over individual issues); (3) adequacy of representation (the representative party will fairly and adequately protect the interest of the class); and (4) appropriateness (a class action is a fair and efficient way to adjudicate the controversy). Id. The plaintiff bears the burden of establishing these prerequisites, and the...