District Court (Minn.) Says Proposed TCPA Class is Not a “Fail-Safe” Class; Denies Motion to Dismiss on the Merits Because the Matters Raised by Defendant Regarding ATDS and Consent Were Outside the Complaint’s Allegations

In Soular v. Northern Tier Energy LP, 2015 WL 5024786, at *8-9 (D.Minn.,2015), Judge Nelson denied a Motion to Dismiss because the matters raised by the Defendant regarding an ATDS and consent were outside the pleadings.  That discussion of the case won’t be otherwise summarized here.  But, Judge Nelson denied the Defendant’s Motion to Strike, finding both that it was premature and that the class allegations were not a “fail-safe” class.   The facts were as follows:

Plaintiff Alex Soular brings this lawsuit against Defendants Northern Tier Energy LP, Northern Tier Energy LLC, Northern Tier Retail Holdings LLC, and Northern Tier Retail LLC d/b/a/ SuperAmerica, which operate SuperAmerica convenience stores in Minnesota and Wisconsin, for allegedly contacting Plaintiff on his cell phone in violation of the Telephone Consumer Protection Act (“TCPA”). (Compl. [Doc. No. 1] ¶¶ 4–5, 16–18.) More specifically, Plaintiff claims that he received numerous promotional Short Message Service (“SMS”) messages, or text messages, from Defendants’ SMS short code “55123,” even though he had never provided prior express written consent to receive those messages. (Id. ¶¶ 20–21, 24–26, 28.) For example, on April 15, 2014, Plaintiff allegedly received the following text message from that short code:  “SuperAmerica says: Time for lunch/dinner? SuperFuel your appetite with any RollerGrill item & SuperSipper for $2! All month long, only @ SuperAmerica.”  (Id. ¶ 25.) Attached as Exhibit A to the Complaint are screenshots of at least twenty-seven additional messages. According to Plaintiff, Defendants sent similar messages “en masse to a list of thousands of wireless telephone numbers using a computerized automatic telephone dialing system.” (Id. ¶ 27.) Plaintiff claims that this system, also known as an “auto-dialer,” “had the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers.” (Id. ¶ 29.) Plaintiff further alleges that these text calls were made “simultaneously” and “without human intervention.” (Id. ¶ 45.)  Plaintiff filed this lawsuit in February 2015, asserting one cause of action for violation of the TCPA, 47 U.S.C. § 227, on behalf of himself and the following class:  “All persons in the United States and its Territories who received one or more text message advertisements, without having provided prior express consent, from or on behalf of Defendants.”  (Id. ¶ 30; see id. ¶¶ 39–48.) He claims that he and the class members have suffered damages in the form of service charges from their wireless carriers, diminished cell phone battery life, wasted data storage capacity, aggravation, and intrusion upon privacy. (See id. ¶¶ 3, 48.) On March 13, 2015, Defendants moved to dismiss the Complaint and to strike the class allegations. The matter was heard on May 15.

Judge Nelson found that the class definition was not an impermissible fail-safe class.

Defendants also seek to strike Plaintiff’s class allegations, pursuant to Rules 12(f) and 23 of the Federal Rules of Civil Procedure, on the theory that Plaintiff has defined an impermissible “fail-safe” class in which membership depends on an individual first having a valid claim.¹ (See Defs.’ Mem. at 6–8.) In particular, Defendants assert that two liability issues would have to be determined before an individual could know whether he or she is a member of the class—i.e., whether the text message came from an ATDS and whether the individual provided the requisite consent. (See id. at 8–10.) According to Defendants, district courts in this Circuit reject such fail-safe class definitions. (Id. at 6, 10; Defs.’ Reply at 14–15.)  In response, Plaintiff argues that Defendants’ Motion should be denied because motions to strike class allegations are rarely granted and, in any event, Plaintiff has not alleged a fail-safe class. (Pl.’s Opp. at 6–8.) As for the latter point, Plaintiff asserts that consent is an affirmative defense, common proof of which will be available in Defendants’ business records, and that the proposed class definition makes no reference to Defendants’ use of an ATDS. (Id. at 8–9.) Plaintiff further contends that even if fail-safe classes are impermissible and Plaintiff has alleged a fail-safe class, the proper time for the Court to address the issue is at class certification. (Id. at 10.)  The Court finds that it would be premature to dismiss Plaintiff’s class allegations at this stage of the litigation. First, the Eighth Circuit has not ruled on the propriety of fail-safe class definitions. See Giesmann v. Am. Home Patient, Inc., No. 4:14CV1538 RLW, 2015 WL 3548803, at *6 n. 4 (E.D. Mo. June 8, 2015). Thus, it is not clear that a fail-safe definition is per se impermissible. Moreover, although Defendants argue repeatedly that district courts in this Circuit have recognized that such definitions are improper, they cite to only one case from this Circuit in which a motion to strike was granted on that basis: Lindsay Transmission, LLC v. Office Depot, Inc., No. 4:12–CV–221 (CEJ), 2013 WL 275568, at *4–5 (E.D.Mo. Jan. 24, 2013). (See Defs.’ Mem. at 8; Defs.’ Reply at 14.) Since that opinion was issued, however, another court in that same district declined to strike a purported fail-safe class definition at the pleading stage. See Giesmann, 2015 WL 3548803, at *6.  Second, it does not appear that the proposed class definition is fail-safe. As the court in Lindsay Transmission summarized:  “A fail-safe class is “one that is defined so that whether a person qualifies as a member depends on whether the person has a valid claim.” Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir.2012). Such a class definition is improper because a class member either wins or, by virtue of losing, is defined out of the class and is therefore not bound by the judgment. Id.; Randleman v. Fidelity Nat’l Title Ins. Co., 646 F.3d 347, 352 (6th Cir.2011). “This type of class definition is called a ‘fail safe’ class because the class definition precludes the possibility of an adverse judgment against class members; the class members either win or are not in the class.” Genenbacher v. CenturyTel Fiber Co. II, 244 F.R.D. 485, 488 (C.D.Ill.2007)….”  2013 WL 275568, at *4. Here, as Plaintiff notes, the proposed class definition makes no reference to Defendants’ use of an ATDS. Accordingly, individuals could qualify as class members even if they do not have a valid claim—i.e., if they received a text message from Defendants that was not sent via an ATDS.  For these reasons, Defendants have not adequately demonstrated that Plaintiff’s class definition is improper. Accordingly, in light of the Eighth Circuit’s statement that striking allegations is an “extreme measure” that is infrequently granted, Stanbury Law Firm, P.A. v. I.R.S., 221 F.3d 1059, 1063 (8th Cir.2000), this Court declines to strike Plaintiff’s class allegations from the Complaint. A more appropriate remedy for curing Plaintiff’s class definition—if it proves necessary—will be to require Plaintiff to amend the definition at the class certification stage. See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir.2012) ( “Defining a class so as to avoid, on the one hand, being over-inclusive and, on the other hand, the fail-safe problem is more of an art than a science. Either problem can and often should be solved by refining the class definition rather than by flatly denying class certification on that basis.”). Thus, Defendants’ Motion to Strike the Class Allegations is denied.