Consumer Finance Insights
February 22, 2018

Northern District of Illinois Decertifies TCPA Class Action

On February 13, 2018, the U.S. District Court for the Northern District of Illinois decertified a Telephone Consumer Protection Act (TCPA) text-message class in light of new evidence of consent obtained during the class-member identification process.  Johnson v. Yahoo! Inc., No. 1:14-cv-02028, is instructive for TCPA defendants in several key respects because it shows the importance of considering whether relevant evidence might be in the hands of third parties and the individualized nature of sifting through the actions of users and subscribers.  Although Johnson also teaches that an order granting certification is not necessarily the final word, litigants should heed the court’s warnings to identify substantive and particular evidence of individualized issues early on in a suit.

In Johnson, the plaintiff sought to represent a nationwide class of individuals who received a text message from Yahoo.  As part of Yahoo’s online instant messaging services, users were able to send instant messages to others as text messages.  When a telephone number received such a message for the first time, Yahoo immediately sent a follow-up message explaining why the recipient had received the text.  Plaintiff’s proposed class included individuals who had received such an explanatory text from Yahoo, but who were not Yahoo users.  Plaintiff excluded Yahoo users from her class definition because those users had consented to text messages from Yahoo as part of the registration process.  In its opposition to class certification, Yahoo argued that no class should be certified because individualized issues of consent could predominate.  The court rejected this argument because Yahoo had not presented specific evidence to support it.

After certification and after the close of discovery, the parties began attempting to identify individual class members.  As part of that process, the plaintiff subpoenaed records from Sprint to attempt to match telephone numbers texted by Yahoo with individual users and subscribers.  Yahoo cross-checked the information provided by Sprint against its own records and found that many individuals whose telephone number was not associated with a Yahoo account may nonetheless have been Yahoo users and, therefore, would have consented to calls through the registration process.  This was because names (even unique ones) provided by Sprint often matched multiple different Yahoo accounts.

Faced with Yahoo’s motion to decertify, the court concluded that it now had the specific evidence it needed to find that individualized issues predominated and that decertification was appropriate.  The court concluded that Yahoo’s evidence would require individualized inquiries to determine whether the Sprint user and subscriber names that matched Yahoo account records were actual matches or simply coincidences.  In a footnote, the court indicated that this issue not only created a predominance problem, but also ascertainability concerns.

TCPA class-action defendants should note several key aspects of this decision.  First, identifying concrete facts to support class certification opposition arguments is key.  And, perhaps more importantly, doing so early in the case is vital.  Here, the District Court permitted Yahoo to bring forward evidence after certification and after the close of discovery to decertify the class.  Some courts may not be as generous.  Second, that evidence may be in someone else’s hands.  Defendants should think outside of their own records when faced with class allegations.  Johnson indicates that a laser focus on what a defendant’s files can show might lead to missed opportunities.