Carnett's, Inc. v. Hammond

• Decision Date: 14 March 2005
• Docket Number: No. S04G1241.,S04G1241.
• Parties: CARNETT'S, INC. v. HAMMOND.
• Court: Georgia Supreme Court

610 S.E.2d 529

279 Ga. 125

CARNETT'S, INC. v. HAMMOND.

No. S04G1241.

Supreme Court of Georgia.

March 14, 2005.

Reconsideration Denied March 28, 2005.

Bondurant, Mixson & Elmore, Michael B. Terry, Frank M. Lowrey, IV, Atlanta, Hicks, Casey & Barber, Mark W. Wortham, Richard C. Foster, Marietta, for appellant.

Marc B. Hershovitz, Atlanta, Roy E. Barnes, Marietta, Weissman, Nowack, Curry & Wilco, Ned Blumenthal, Michael K. Jablonski, Atlanta, for appellee.

Hall, Booth, Smith & Slover, Mark A. Barber, Annette F. Simelaro, Hill, Kertscher & Wharton, Douglas R. Kertscher, Thurbert E. Baker, Attorney General, Isaac Byrd, Deputy Attorney General, Sidney R. Barrett, Jr., Daniel S. Walsh, Assistant Attorneys General, amici curiae.

FLETCHER, Chief Justice.

Michelle Hammond brought a class action lawsuit against Carnett's, Inc. alleging that Carnett's violated the Telephone Consumer Protection Act (TCPA)¹ when its agent faxed 73,500 unsolicited advertisements to Atlanta area residents. The issue before us is whether the Court of Appeals correctly held that the trial court abused its discretion in denying Hammond's motion for class certification.² Because individual questions of law and fact predominate over whether a recipient's fax was "unsolicited," and thus whether each recipient is properly part of the class, the trial court did not err in denying class certification and the Court of Appeals's decision must be reversed.

1. The TCPA prohibits "us[ing] any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine."³ In April 2002, Carnett's, an Atlanta area car wash company, hired Sunbelt Communications and Marketing, LLC to fax advertisements for discount car washes to Atlanta area residents. On September 20, 2002, Hammond, a fax recipient, filed suit against Carnett's for violation of the TCPA.⁴ She sought to certify a class consisting of all fax recipients who had not asked to be added to Carnett's or Sunbelt's distribution lists. On April 29, 2003, the trial court denied Hammond's motion for class certification, reasoning that whether each class member received an "unsolicited" fax would require individual inquiry. On March 12, 2004, the Court of Appeals reversed, and we granted certiorari.

2. As a preliminary matter, we agree with the Court of Appeals's ruling in Hooters of Augusta, Inc. v. Nicholson⁵ that the TCPA reaches purely intrastate communications and provides a private right of action in state court unless prohibited by state law. As the Court of Appeals has also recognized, these private actions may be brought as class actions where the requirements of OCGA § 9-11-23 are met.⁶ These requirements are:

(1) numerosity — that the class is so numerous as to make it impracticable to bring all members before the court; (2) commonality — that there are questions of law and fact common to the class members that predominate over any individual questions; (3) typicality — that the claim of the named plaintiff is typical of the claims of the class members; (4) adequacy of representation — that the named plaintiff will adequately represent the special interest of the class; and (5) superiority — that a class action is superior to other methods of fairly and efficiently adjudicating the controversy. ⁷

Although all of these requirements are important to consider, this case turns on the commonality requirement. The question answered by the Court of Appeals, and which is now before us, is whether the trial court abused its discretion in concluding that the commonality requirement was not met.

3. In determining whether the commonality requirement was met, we must analyze the elements of a TCPA violation and determine whether the class members were similarly situated. We undertake this analysis recognizing both that trial judges have broad discretion in deciding whether to certify a class⁸ and that plaintiffs bear the burden of proving that class certification is appropriate.⁹

The TCPA is violated only if a plaintiff receives an "unsolicited" fax. Under the statute, "unsolicited" means transmitted without the recipient's "prior express invitation or permission."¹⁰ This invitation or permission can be given orally or in writing.¹¹

The Court of Appeals found no evidence that Carnett's or Sunbelt obtained express permission from the fax recipients.¹² But under Federal Communications Commission regulations, promulgated pursuant to the TCPA¹³ and in effect at the time Carnett's faxes were sent,¹⁴ express permission is also deemed given by those recipients having an "established business relationship" with Carnett's.¹⁵ An established business relationship is defined as "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of the subscriber's purchase or transaction with the entity...." ¹⁶

Hammond argues that the established business relationship exemption does not exist because it is contrary to the clear statutory language of the TCPA. But the FCC regulations dictate otherwise,¹⁷ and state courts must accept these as valid.¹⁸ Cases from Georgia and other jurisdictions have also held that this exemption exists.¹⁹

4. Having determined that the established business relationship exemption exists, we must now determine whether it is sufficient to defeat commonality under the facts of this case. The FCC has opined that the established business relationship exemption is broad²⁰ and that "[y]ou have an established business relationship with a person or entity if you have made an inquiry, application, purchase, or transaction regarding products or services offered by such person or entity."²¹ While we need not determine the precise parameters of this exemption, the definition of an established business relationship in the FCC rules, as well as the above-cited FCC pronouncements, suggest that even one car wash at Carnett's would likely suffice. ²² Although the faxes were not targeted to Carnett's customers,²³ they were sent to residents in the areas where Carnett's does business. Therefore, at least some fax recipients likely had an established business relationship with Carnett's. Hammond did not exclude these individuals from the proposed class, and thus failed to prove that the class members were similarly situated in that they all received "unsolicited" faxes.²⁴ Accordingly, the trial court was within its discretion to deny class certification based on a lack of commonality.

The Court of Appeals sidestepped this issue by holding that the "predominant question [of solicitation] is common to all the class members and thus supports, rather than undermines, a finding of commonality."²⁵ But a common question is not enough when the answer may vary with each class member and is determinative of whether the member is properly part of the class.²⁶ Hammond argues that answering the question of solicitation now is an inappropriate inquiry into the merits at the class certification stage.²⁷ But the question of solicitation is both a merits question and a class question, and thus the trial court acted within its discretion in reaching it.

[ 610 S.E.2d 533]

5. Finally, courts in other jurisdictions have held that individual questions of whether fax recipients gave their oral or written permission rendered class certification inappropriate without even reaching the established business relationship issue.²⁸ While our holding today does not go so far, we note that these decisions support our conclusion that the trial court did not abuse its discretion under the facts of this case.

6. Hammond also asks, in the alternative to affirming the Court of Appeals's decision on certification, that this Court remand the case so that she may conduct further discovery. She argues that she attempted to obtain a list of the fax recipients from Sunbelt, and that the trial court abused its discretion by failing to allow discovery to proceed while taking the motion for class certification under consideration. The Court of Appeals reversed the trial court's denial of Hammond's motion to compel discovery.²⁹

If Hammond had timely attempted discovery for the purpose of determining and excluding potential class members having established business relationships with Carnett's, we would be sympathetic to this argument. But Hammond never sought discovery as to this issue — instead, she relied on her argument that the established business relationship exemption did not exist. Also, the trial court asked Hammond whether it would be premature to rule on class certification without further discovery, and Hammond elected to proceed without delay. A "party cannot complain of a judgment, order, or ruling that his own conduct produced or aided in causing."³⁰ Therefore, the trial court did not abuse its discretion in denying Hammond's request for further discovery, and the Court of Appeals's decision on this issue must also be reversed.

Judgment reversed.

All the Justices concur, except BENHAM, J., not participating.

1. 47 USC § 227.

2. Hammond v. Carnett's, Inc., 266 Ga.App. 242, 596 S.E.2d 729 (2004).

3. § 227(b)(1)(C).

4. See Hooters of Augusta, Inc. v. Nicholson, 245 Ga.App. 363, 367, 537 S.E.2d 468 (2000) ("Under the TCPA, `the entity or entities on whose behalf facsimiles are transmitted are ultimately liable for compliance with the [TCPA's] rule banning unsolicited facsimile advertisements'.") (citing In Re rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 10 FCC Rcd. 12391, 12407 (July 26, 1995)).

5. Id. at 363-367, 537 S.E.2d 468.

6. Hammond, 266 Ga.App. at 243, 596 S.E.2d 729; McGarry v. Cingular Wireless, LLC, 267 Ga.App. 23, 24, 599 S.E.2d 34 (2004).

7. Hammond, 266 Ga.App. at 243-244, 596 S.E.2d 729 (interpreting version of OCGA § 9-11-23 in effect at the time Hammond's action...