In the
United States Court of Appeals
For the Seventh Circuit
No. 10-8050
CE D ESIGN L IMITED, on its own behalf
and that of a class,
Plaintiff-Respondent-Appellee,
v.
K ING A RCHITECTURAL M ETALS, INC.,
Defendant-Petitioner-Appellant.
Petition for Permission to Appeal, and Appeal,
from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 09 C 2057—Elaine E. Bucklo, Judge.
S UBMITTED JANUARY 18, 2011—D ECIDED M ARCH 18, 2011
Before P OSNER, M ANION, and H AMILTON, Circuit Judges.
P OSNER, Circuit Judge. We have decided to grant the
defendant’s petition to be allowed to appeal from the
district judge’s certification of a class, in this suit under
the Telephone Consumer Protection Act (as amended by
the Junk Fax Prevention Act of 2005), 47 U.S.C. § 227. See
Fed. R. Civ. P. 23(f). The petition presents a sufficiently
2 No. 10-8050
novel and important issue concerning class action
practice to justify our allowing the appeal. And because
the petition and the response are adequate substitutes
for briefs and there is a voluminous record, compiled in
the district court, to assist us in our consideration of
the appeal, we shall not delay the litigation further by
requesting additional briefing.
Review of a decision to certify a class is deferential,
Ervin v. OS Restaurant Services, Inc., No. 09-3029, 2011
WL 135708, at *4 (7th Cir. Jan. 18, 2011), but “deferential”
doesn’t mean “abject.” Parker v. Astrue, 597 F.3d 920, 921
(7th Cir. 2010). A class “may only be certified if the
trial court is satisfied, after a rigorous analysis, that the
prerequisites of Rule 23(a) have been satisfied.” General
Telephone Co. v. Falcon, 457 U.S. 147, 161 (1982) (emphasis
added); see also, e.g., In re Schering Plough Corp. ERISA
Litigation, 589 F.3d 585, 595-96 (3d Cir. 2009). Certification
as a class action can coerce a defendant into settling on
highly disadvantageous terms regardless of the merits
of the suit. 1998 Advisory Committee Notes to Fed. R. Civ.
P. 23(f) (“an order granting certification . . . may force
a defendant to settle rather than incur the costs of de-
fending a class action and run the risk of potentially
ruinous liability”); Blair v. Equifax Check Services, Inc., 181
F.3d 832, 834 (7th Cir. 1999) (“a grant of class status can
put considerable pressure on the defendant to settle,
even when the plaintiff’s probability of success on the
merits is slight”); Hartford Accident & Indemnity Co. v.
Beaver, 466 F.3d 1289, 1294 (11th Cir. 2006); In re Visa
Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 145
(2d Cir. 2001). This is a useful reminder in the present
No. 10-8050 3
case because, as we’ll see, the Telephone Consumer
Protection Act makes violators strictly liable for cumula-
tively very heavy statutory penalties.
The need for rigorous analysis of a motion to certify
a class is for the protection not of defendants alone but
of the class members as well, especially given our court’s
recent movement toward allowing a prospective class
only one real chance for the class to be certified; for
we have directed district courts that have denied certif-
ication to enjoin efforts in other jurisdictions to certify
essentially the same classes. Thorogood v. Sears, Roebuck
& Co., 624 F.3d 842, 850-52 (7th Cir. 2010). Denial of
certification may be as heavy a blow to the class as grant
of certification is to the defendant.
So far as relates to this case, the Telephone Consumer
Protection Act forbids “unsolicited” fax advertisements.
47 U.S.C. § 227(b)(2)(C). Such advertisements (“junk
faxes,” as they are called) consume the recipient’s paper
and ink without his consent and are thus a source of
irritation that has given rise to the statutory prohibition.
Resource Bankshares Corp. v. St. Paul Mercury Ins. Co., 407
F.3d 631, 639 (4th Cir. 2005); Missouri ex rel. Nixon v.
American Blast Fax, Inc., 323 F.3d 649, 654-55 (8th Cir.
2003); Destination Ventures, Ltd. v. FCC, 46 F.3d 54, 56
(9th Cir. 1995). CE Design—a small civil engineering firm
in the Chicago area that, unusually for a business firm,
is an avid class-action plaintiff—has filed at least 150
class action suits under the Telephone Consumer Pro-
tection Act, according to its president, John J. Pezl. Every
time CE receives what it considers an unsolicited fax
4 No. 10-8050
advertisement, Pezl sends it to the class action firm
with which he works (and which represents CE in other
matters as well).
It seems odd that a business firm would want to
bring junk-fax suits, and especially odd that a civil engi-
neering firm would want to sue a manufacturer of
metal building components (King Architectural Metals,
the defendant) for advertising its building components
to the firm. Civil engineers advise their customers on
such products and thus are indirect customers of compa-
nies like King. And it’s not as if King inundated CE with
faxed ads; there were only two, each of only one
page. But CE’s business model combines selling civil
engineering services with filing class action junk-fax
suits, and it’s not unlawful to be a professional class
action plaintiff. Murray v. GMAC Mortgage Corp., 434 F.3d
948, 954 (7th Cir. 2006). Indeed, an experienced plaintiff
in such an action may be able to ensure that class
counsel act as faithful agents of the class. Id. That is a
common problem in class action litigation because often
no member of the class has a significant financial
stake—which may be the very reason that the suit is
being brought as a class action.
What is a matter for concern is that Pezl, who has been
deposed in (so far as he can recall) 20 of his company’s
suits, has engendered doubts about his truthfulness. CE
Design v. Beaty Construction, Inc., No. 07 C 3340, 2009 WL
192481, at *6, *7 n. 3 (N.D. Ill. Jan. 26, 2009). He did so
in the present suit. Although the district judge
remarked that what she euphemistically called a “dis-
No. 10-8050 5
crepancy” in Pezl’s deposition was “immaterial” to the
issue of certification, it was immaterial just to the view
she took of it; Pezl couldn’t have known what that view
would be when he testified to having been unaware that
by giving CE’s fax number to the Blue Book (of which
more shortly) he had expressly authorized the other
subscribers, who include King, to “communicate” with
CE by fax. The accuracy of that testimony is, as we
shall see, an important issue in deciding whether he is
a proper representative of the class; the district judge
missed its importance.
During a period of about a month in 2009, King
faxed some 500,000 ads; it was its first fax marketing
campaign (and, we’re guessing, its last). The certified
class includes those recipients who had not given ex-
press permission to receive faxed advertisements, unless
they had been King’s customers or had an established
business relationship with it. CE contends that the vast
majority of the faxes do not fall within any exception
created by the Act. If that is true, then because statutory
damages are $500 per violation, 47 U.S.C. § 227(b)(3)(B)—
and can be trebled if the court finds that the violation
was willful or knowing, § 227(b)(3)(C)—King is facing
a very large potential liability. (Some statutes, such as
the Fair Debt Collection Practices Act and the Truth in
Lending Act, cap damages, 15 U.S.C. §§ 1640(a)(2)(B),
1692k(a)(2)(B)(ii). The Telephone Consumer Protection
Act does not.) That is relevant, as explained earlier, to the
need for a rigorous analysis of whether to certify a class.
King makes a number of arguments against certifica-
tion, but only those relating to the linked issues of the
6 No. 10-8050
typicality of CE’s claim (see Fed. R. Civ. P. 23(a)(3);
Harper v. Sheriff of Cook County, 581 F.3d 511, 513 (7th
Cir. 2009); Muro v. Target Corp., 580 F.3d 485, 492 (7th
Cir. 2009)), and the adequacy of CE’s representation of
the class, have sufficient merit to warrant discussion.
A class is disserved if its representative’s claim is not
typical of the claims of the class members, for then if
his claim fails, though claims of other class members
may be valid, the suit will at the least be delayed by the
scramble to find a new class representative. Alterna-
tively, a class representative’s atypical claim may
prevail on grounds unavailable to the other class mem-
bers, leaving them in the lurch.
In many cases, including this one, the requirement of
typicality merges with the further requirement that the
class representative “will fairly and adequately protect
the interests of the class.” Fed. R. Civ. P. 23(a)(4); see
J.H. Cohn & Co. v. American Appraisal Associates, Inc., 628
F.2d 994, 999 (7th Cir. 1980). In light of the statement in
Wagner v. NutraSweet Co., 95 F.3d 527, 534 (7th Cir.
1996), that “typicality under Rule 23(a)(3) should be
determined with reference to the company’s actions, not
with respect to particularized defenses it might have
against certain class members,” we’ll focus our analysis
on adequacy. CE cannot be an adequate representative
of the class of unconsenting recipients of King Architec-
tural Metals’ faxes if it is subject to a defense that
couldn’t be sustained against other class members, as in
Koos v. First National Bank of Peoria, 496 F.2d 1162, 1164-65
(7th Cir. 1974), or if Pezl is not credible on the key
No. 10-8050 7
question of whether CE invited or permitted the
faxed advertisements about which it now complains. (If
it did, its claim fails.) But it is important to distinguish
between adequacy of representation and the merits of
the suit. The merits are not before the appellate court
when the court is reviewing the district court’s certifica-
tion of the class. Schleicher v. Wendt, 618 F.3d 679, 686-88
(7th Cir. 2010); Murray v. GMAC Mortgage Corp., supra,
434 F.3d at 954. The only question we can consider is
whether, however meritorious the suit itself may be, the
claim of the class representative may be subject to a
defense (that of consent to be faxed ads) that makes it
an inappropriate representative of the class because
other class members may not be subject to the same
defense, or perhaps to any defense.
The Act defines an “unsolicited advertisement” as
“any material advertising the commercial availability or
quality of any property, goods, or services which is trans-
mitted to any person without that person’s prior express
invitation or permission, in writing or otherwise.” 47
U.S.C. § 227(a)(5). King argues that CE gave it “express
invitation or permission” to fax advertisements to it. CE
posted its fax number on its website, and next to it the
phrase “Contact Us.” More important, it signed a form
that both authorized the publication of its fax number
in the Blue Book of Building and Construction—a print and
(mainly) online directory similar to the Yellow Pages
but aimed at firms in the building industry—and autho-
rized the other subscribers to the Blue Book, such as King,
to “communicate” with it, including via fax. For the Blue
Book states that “by supplying The Blue Book with your
8 No. 10-8050
fax and e-mail address, you agree to have The Blue Book
and users of The Blue Book services communicate with you
via fax or e-mail” (emphasis added).
Whether the website plus the Blue Book form added up
to CE’s consenting for King to fax advertisements to it
presents a question that neither the statute nor the case
law, nor the interpretation of the statute by the Federal
Communications Commission, answers. The only ap-
pellate decision dealing with the question appears to be
Travel 100 Group, Inc. v. Mediterranean Shipping Co. (USA)
Inc., 889 N.E.2d 781, 788-90 (Ill. App. 2008). It interprets
“express invitation or permission” broadly enough to
support King’s position, but the facts were quite different
from those of this case.
Civil engineering firms are direct or indirect customers
of sellers of building components, and why else would
those sellers want to “communicate” with civil engineers
by fax except to advertise their wares to them? In this
age of email and other Internet communication systems,
faxes are used by businesses for little else besides ad-
vertising. King claims without contradiction that many
of its faxed advertisements were faxed to companies or
individuals that had asked it for catalogs and other
sales materials. Catalogs and other mailed sales mate-
rials are just other advertising media. They don’t use
the recipient’s paper and ink, but a recipient who is in
the building business probably doesn’t care about the
form in which potential suppliers communicate with it
or the expense of receiving a fax. Fax paper and ink used
to be expensive but are no longer.
No. 10-8050 9
“The presence of even an arguable defense peculiar to
the named plaintiff or a small subset of the plaintiff
class may destroy the required typicality of the class as
well as bring into question the adequacy of the named
plaintiff’s representation. The fear is that the named
plaintiff will become distracted by the presence of a
possible defense applicable only to him so that the repre-
sentation of the rest of the class will suffer.” J.H. Cohn & Co.
v. American Appraisal Associates, Inc., supra, 628 F.2d at
999 (citation omitted). A named plaintiff who has serious
credibility problems or who is likely to devote too
much attention to rebutting an individual defense may
not be an adequate class representative. See, e.g., Koos v.
First National Bank of Peoria, supra, 496 F.2d at 1164-65;
Schleicher v. Wendt, 2009 WL 761157, at *3 (S.D. Ind.
March 20, 2009), affirmed on other grounds, 618 F.3d
679 (7th Cir. 2010).
By giving its fax number to the Blue Book for publica-
tion, CE publicized the number to the Blue Book’s other
subscribers. The Blue Book brings together companies
in construction, civil engineering, and architecture to
facilitate their marketing to one another. Pezl’s testimony
that he was unaware that he had authorized publication
of CE’s fax number in the Blue Book is both difficult
to credit, as the district judge acknowledged, and, if
disbelieved, could be thought evidence of Pezl’s fearing
that the publication of CE’s fax number could indeed
be construed as permission to fax ads to that number.
The legend “Contact Us” next to CE’s fax number on
the company’s website could be thought to reinforce
an inference of permission from the publication of the fax
10 No. 10-8050
number in the Blue Book. Compare Murray v. GMAC
Mortgage Corp., supra, 434 F.3d at 954. And notice that
the invitation or permission required by the statute for
authorizing faxed ads may be “in writing or other-
wise”—no specific form of invitation or permission is
specified. The district judge did not give adequate con-
sideration to the cumulative significance of Pezl’s testi-
mony, the publication of CE’s fax number in the Blue
Book, and its publication on CE’s website, in ruling that
CE was an adequate representative of the class.
A 2003 regulation of the Federal Communications
Commission on which the judge relied states that the
mere fact of publication of one’s fax number in a
directory or a website is not express permission to fax
advertisements to that number. But it adds that “given
the variety of circumstances in which such numbers may
be distributed (business cards, advertisements, directory
listings, trade journals, or by membership in an associa-
tion), it [is] appropriate to treat the issue of consent in
any complaint regarding unsolicited facsimile adver-
tisements on a case-by-case basis” and that “express permis-
sion to receive a faxed ad requires that the consumer
understand that by providing a fax number, he or she is
agreeing to receive faxed advertisements.” In re Rules
and Regulations Implementing the Telephone Consumer
Protection Act of 1991, 18 F.C.C.R. 14014, 14129 (FCC
2003), 2003 WL 21517853 (emphases added). A more
recent regulation states that “the fact that [a] facsimile
number was made available in a directory, advertise-
ment or website does not alone entitle a person to send
a facsimile advertisement to that number.” In re Rules
No. 10-8050 11
and Regulations Implementing the Telephone Consumer
Protection Act of 1991, 21 F.C.C.R. 3787, 3796 (FCC 2006),
2006 WL 901720 (emphasis added). The words we’ve
italicized in these two passages create uncertainty about
the application of “express invitation or permission” to
CE’s conduct.
The uncertainty is reinforced by the deposition of the
Blue Book’s editor, taken by one of CE’s lawyers in an
earlier suit under the Telephone Consumer Protection
Act but made a part of the record in the present case.
The editor described the Blue Book succinctly as a “buying
guide for the construction industry,” and the following
exchange with the lawyer ensued:
Q. Okay. And what I understand is that in terms
of people or entities that put their name and address
into the Blue Book, is that basically for companies to
advertise to get work and submit bids for potential
business from this potential client base that might
not necessarily be in the Blue Book itself but in the
database? [objection and clarification omitted]
A. Yes. People advertise and list themselves in the
Blue Book because they are looking to get exposure.
The mission of the Blue Book is to bring buyers and
sellers together. So we have this unlisted circulation
base or user base that they want to get in front of, and
they also want to get in front of the companies that
are listed in the Blue Book.
...
Q. Is the underlying purpose of the Blue Book for
companies to get exposure to advertise to get work
12 No. 10-8050
and submit bids for potential business for their par-
ticular company?
A. That’s correct.
...
A. The Blue Book is distributed so people in the
construction industry can contact each other. So they
have a directory. It’s like a yellow page of construction.
They can find whatever service, product, equipment
that they’re looking for, and they’re able to easily
contact that company.
Q. Exactly. And they’re looking to contact that com-
pany to see if that company will do business for
them? [objection omitted]
A. Well, they contact them for a variety of reasons.
They do contact them to see if they can work for
them or if they can purchase their things. Or many
times they contact them to promote their company
to them to let them know that, hey, I’m in business
in this region, you know, kind of like the GC Show-
case. Can you put me on your vendor list? They use
it to introduce themselves to other people in the
industry.
The editor’s testimony suggests that subscribers to the
Blue Book expect and consent to receive ads, including by
fax since they are required to publish their fax number
in the Blue Book if they subscribe and since no business, as
distinct from a consumer, is likely to care whether an ad
that it wants to receive comes by email, snail mail, or fax.
No. 10-8050 13
The record raises serious doubts concerning the truth-
fulness of Pezl’s testimony about his familiarity with the
terms of the contract with the Blue Book. The district
court erred in treating the subject as immaterial; ex-
press consent to communications by fax and email from
Blue Book subscribers raises a substantial question. The
contractual “consent” to communications among a com-
munity of businesses involved in the construction in-
dustry seems to have no point other than to provide
the consent required by this federal law and perhaps
similar state laws. The credibility problem and the
consent defense are vital in assessing CE Design’s ade-
quacy as a class representative. We conclude that, as in
In re Schering Plough Corp. ERISA Litigation, supra, 589
F.3d at 600, and Beck v. Maximus, Inc., 457 F.3d 291, 300
(3d Cir. 2006), the district court must reconsider its
ruling that the named plaintiff is a proper class repre-
sentative.
We don’t want to be misunderstood, however, as ex-
tending an invitation to defendants to try to derail legiti-
mate class actions by conjuring up trivial credibility
problems or insubstantial defenses unique to the class
representative. Serious challenges to typicality and ade-
quacy must be distinguished from petty issues manu-
factured by defendants to distract the judge from his or
her proper focus under Rules 23(a)(3) and (4) on the
interests of the class, as emphasized in Dubin v. Miller, 132
F.R.D. 269, 272 (D. Colo. 1990), where the judge, while
decertifying the class, remarked that “few plaintiffs come
to court with halos above their heads; fewer still escape
with those halos untarnished. For an assault on the
14 No. 10-8050
class representative’s credibility to succeed, the party
mounting the assault must demonstrate that there exists
admissible evidence so severely undermining plaintiff’s
credibility that a fact finder might reasonably focus on
plaintiff’s credibility, to the detriment of the absent class
members’ claims.” See also Trief v. Dun & Bradstreet Corp.,
144 F.R.D. 193, 200 (S.D.N.Y. 1992); and compare the
denial of class certification in Koos v. First National Bank
of Peoria, supra, 496 F.2d at 1164-65; Savino v. Computer
Credit, Inc., 164 F.3d 81, 87 (2d Cir. 1998), and Gary Plastic
Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
903 F.2d 176, 180 (2d Cir. 1990), with its grant in
Randolph v. Crown Asset Mgmt., LLC, 254 F.R.D. 513, 518
(N.D. Ill. 2008); In re Farmers Ins. Co. FCRA Litigation, 2006
WL 1042450, at *6 (W.D. Okla. Apr. 13, 2006); Nelson v.
IPALCO Enterprises, Inc., 2003 WL 23101792, at *6 (S.D. Ind.
Sept. 30, 2003), and Rodger v. Electronic Data Systems
Corp., 160 F.R.D. 532, 539 (E.D.N.C. 1995).
Should the court decide that CE is not a proper class
representative, that would not conclude the question
whether the suit should be allowed to proceed as a class
action. CE’s law firm might be able to find a class
member who would substitute for CE—a member less
vulnerable to the defense of invitation or permission.
King markets its product to consumers as well as to
businesses. See www.kingmetals.com (visited Feb. 28,
2011). We do not know whether any consumers received
the faxed advertisements but if some did, and any of
those who did clearly hadn’t authorized King to fax
advertisements to them (consumers do not subscribe to
the Blue Book), one or more of them would be potential
No. 10-8050 15
class representatives not subject to the defense that
King could raise against CE’s claim.
Another possibility, should CE be forced to abdicate
as class representative, might be certification of separate
classes: a class of recipients of King’s faxed ads who are
potentially subject to a defense of invitation or permis-
sion and a class of recipients who are not. The merits of
the consent defense based on the terms of the Blue Book
contract—win or lose—might well be suitable for determi-
nation on a classwide basis.
We vacate the class certification and remand for fur-
ther proceedings consistent with this opinion.
V ACATED AND R EMANDED.
3-18-11