In the
United States Court of Appeals
For the Seventh Circuit
No. 10-3903
L ADY D I’S, INC.,
Plaintiff-Appellant,
v.
E NHANCED S ERVICES B ILLING, INC. AND
ILD T ELECOMMUNICATIONS, INC. d/b/a
ILD T ELESERVICES, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 1:09-cv-00340-SEB-DML—Sarah Evans Barker, Judge.
A RGUED M AY 11, 2011—D ECIDED A UGUST 16, 2011
Before R OVNER and H AMILTON, Circuit Judges, and
L EFKOW, District Judge.
H AMILTON, Circuit Judge. Plaintiff Lady Di’s, Inc. alleged
in this proposed class action that defendants Enhanced
The Honorable Joan Humphrey Lefkow of the Northern
District of Illinois, sitting by designation.
2 No. 10-3903
Services Billing, Inc. (“ESBI”) and ILD Telecommunica-
tions, Inc. are billing aggregators engaged in “cramming”
by placing unauthorized charges on customers’ tele-
phone bills. The plaintiff alleged that the defendants
arranged to have unauthorized charges placed on its
telephone bill and, in the six years before this suit was
filed, have been responsible for unauthorized charges
being placed on the telephone bills of more than one
million Indiana telephone numbers. The complaint
alleged that plaintiff “never requested, authorized, or
even knew about” the services for which defendants
charged it. The evidence, however, turned out differently.
Both defendants produced evidence proving that the
plaintiff actually ordered the services in question.
Despite that evidence, plaintiff has pursued the case,
arguing that although it actually ordered the services, the
charges were never properly authorized. The plaintiff’s
case now hinges on its theory that, even if a customer
has actually ordered and benefitted from a service, the
service was not legally authorized if the defendants
did not possess all the customer authorization documen-
tation required by the Indiana anti-cramming regulation,
170 IAC § 7-1.1-19(p). Indiana’s anti-cramming regula-
tion does not provide a private right of action, but the
plaintiff argues that the defendants’ failure to comply
proves, without more, common law unjust enrichment,
so that potential class members are entitled to a refund
for all services for which defendants charged them. The
plaintiff also argues that the defendants’ failure to
comply with the regulation proves a claim for damages
under Indiana’s Deceptive Commercial Solicitation
Act, Ind. Code § 24-5-19-9.
No. 10-3903 3
The district court denied the plaintiff’s request for
class certification and granted the defendants’ motions
for summary judgment on the unjust enrichment and
statutory deception claims. Lady Di’s, Inc. v. Enhanced
Services Billing, Inc., 2010 WL 4751659 (S.D. Ind. Nov. 16,
2010). We affirm the district court’s judgment, though we
follow a somewhat different path to that end. Turning
first to the merits, we conclude that the Indiana anti-
cramming regulation does not apply to these defendants
because they are not telephone companies and did not
act in this case as billing agents for telephone companies.
Second, we find that there was no unjust enrichment
where the plaintiff ordered and received the services
in question. Third, we find that the Deceptive Com-
mercial Solicitation Act does not apply because the
plaintiff had actually ordered the services for which it
was charged. Finally, because we reject plaintiff’s theory
of the case, premised solely on the defendants’ common
violation of the Indiana anti-cramming regulation, we
affirm the district court’s denial of class certification
because common issues do not predominate over indi-
vidual issues, as required for a class under Federal Rule
of Civil Procedure 23(b)(3).
I. Factual and Procedural Background
A. The Parties
Plaintiff Lady Di’s is a small business incorporated in
Indiana, where it also has its principal place of business.
Lady Di’s uses AT&T as its telephone company. Dianne
4 No. 10-3903
Markin-Venn is the president and owner of Lady Di’s and
personally reviews and pays the company’s telephone
bill. Defendant ESBI is incorporated in Delaware with
its principal place of business in Texas. Defendant ILD
is incorporated in Delaware with its principal place of
business in Florida. Both defendants are “billing clearing-
houses” or “billing aggregators.” As billing aggregators,
ESBI and ILD are not directly involved with the sale of
telecommunications and related services to customers.
Instead, they act as intermediaries between telephone
companies and service providers.
The term “service providers” refers to a wide variety
of vendors, including long distance providers, internet
and web-hosting companies, directory assistance opera-
tors, and voice mail providers. There are hundreds of
service providers throughout the country. They sell tele-
communications and related services (and sometimes
unrelated services) to customers and then use billing
aggregators to transmit charges to telephone companies
to be included in customers’ bills. The charges from
service providers aggregated by these defendants
appear on customers’ local telephone bills on pages
labeled “ESBI” or “ILD.” After customers pay their tele-
phone bills, ESBI and ILD collect payments for service
provider charges recovered by local telephone com-
panies, deduct part of the payment as a fee, and forward
the rest on to the service providers.
No. 10-3903 5
B. Allegations of Unauthorized Charges on the Plaintiff’s
Telephone Bill
The plaintiff contends that for several months in 2008,
defendants ESBI and ILD each placed unauthorized
charges on its telephone bill. ILD placed a monthly
charge of $49.95 from the service provider “Advanced
Business Services, LLC,” an e-fax service, on the plain-
tiff’s AT&T telephone bill. The charge was labeled “AD-
VANCED BUS. SVCS, LLC-EFAX SVC MTHLY.” Dkt. 125,
Ex. C1-C2. Defendant ESBI placed a monthly charge of
$42.75 from “My Local Reach, Inc.,” a company that
registers customer websites with Internet search
engines and directories, on plaintiff’s bill. The charge
was labeled “MYLOCALREACH-ONLINE YP LISTING
MTH FEE.” Id. On plaintiff’s telephone bills, all of these
charges were marked on both the front cover sheet and on
pages within the bills marked “ESBI” and “ILD.” Id.
The complaint alleged that the plaintiff paid its October
2008 telephone bill before it discovered the ESBI and
ILD charges, but plaintiff’s owner testified that she ques-
tioned the October charges before paying the bill. The
plaintiff eventually paid the charges but later requested
a refund. The plaintiff first contacted AT&T for a
refund and was told to contact ESBI and ILD. ESBI
refused to refund the charges. ILD never returned its call.
The plaintiff then turned the matter over to its attorneys.
After this lawsuit was filed, the plaintiff’s account
was credited in full (minus $14.00 in sales tax) for the
disputed charges: $199.75 for the My Local Reach/ESBI
charges and $299.70 for the Advanced/ILD charges. Dkt.
6 No. 10-3903
125, Ex. C3-C4; Dkt. 139, Ex. A, ¶ 11 (Decl. of Kathy
McQuade); Dkt. 139, Ex. B, at 67 (Markin-Venn Dep.); Dkt.
86, Ex. C, at 95-96 (Markin-Venn Dep.).1
“Cramming” means placing unauthorized charges on
telephone bills, but the defendants have produced evi-
dence showing that the plaintiff actually ordered the
disputed services for which it was billed. ESBI produced
a recorded conversation between a sales representative
of service provider My Local Reach and plaintiff’s
owner Markin-Venn, who orally authorized My Local
Reach to bill Lady Di’s on its local telephone bill $39.95
per month. See Dkt. 84, at 6-8 (transcript of July 15, 2008
conversation). Likewise, ILD produced a recorded con-
versation between service provider Advanced’s third
party verification service and Lady Di’s. In that conversa-
tion, a representative of Lady Di’s (who claimed to be
Markin-Venn) agreed to be billed for Advanced’s ser-
vices. See Dkt. 90, Ex. B, at 29-30 (Markin-Venn Dep.); see
also id., Ex. C, at 7-8 (transcript of May 6, 2008 conversa-
tion). This evidence of oral authorization is undisputed.
C. Procedural History
The plaintiff first filed suit and moved for class certifi-
cation in state court. The defendants then removed the
1
The plaintiff argues that these were not full refunds because
they did not include taxes or interest. We do not reach this
issue because we conclude that defendants would be entitled
to summary judgment even if they had not made the refunds.
No. 10-3903 7
case to the Southern District of Indiana. The district
court granted ILD’s motion to dismiss the plaintiff’s
constructive fraud claim but denied ILD’s motion to
dismiss the claims for unjust enrichment and statutory
deception. After discovery, the district court denied the
plaintiff’s motion for class certification and granted de-
fendants’ motions for summary judgment on the re-
maining claims for unjust enrichment and statutory
deception. The plaintiff appeals both rulings.
II. Analysis
A. The Merits
Because the plaintiff’s legal theory affects whether
common or individual issues predominate and thus
whether the class may be certified under Federal Rule
of Civil Procedure 23(b)(3), we first address the merits
of the unjust enrichment and statutory deception
claims before turning to the class certification issue. We
review the district court’s summary judgment decisions
de novo, viewing all facts in the light most favorable to
the non-moving party. Trask-Morton v. Motel 6 Operating
L.P., 534 F.3d 672, 677 (7th Cir. 2008). Summary judgment
is appropriate only where the moving parties show
that there is no genuine issue of material fact. Fed. R. Civ.
P. 56(a). The moving parties bear the initial burden of
demonstrating that these requirements have been met.
They may meet this responsibility by showing that there
is an absence of evidence to support the non-moving
party’s case if that party bears the burden of proof. Trask-
Morton, 534 F.3d at 677.
8 No. 10-3903
1. The Indiana “Cramming” Regulation
The plaintiff builds its case on a regulation issued by
the Indiana Utility Regulatory Commission that was
designed to counter the widespread consumer fraud
practice known as “cramming.” Cramming, as described
by the Federal Communications Commission, is the
practice of “placing unauthorized, misleading, or decep-
tive charges” on a telephone bill. See Dkt. 5, Ex. A, at 30
(“Unauthorized, Misleading, or Deceptive Charges Placed
on Your Telephone Bill — ‘Cramming,’ ” Federal Commu-
nications Commission (July 1, 2008) (“FCC cramming
brochure”)). The practice of cramming emerged after
the court-ordered break-up of AT&T. See, e.g., F.T.C. v.
Inc21.com Corp., 688 F. Supp. 2d 927, 929 (N.D. Cal.
2010). AT&T divested its local telephone services to
independent regional companies. After the divestiture,
one company provided a customer’s local telephone
services and another company provided long-distance
telephone services, but the regional telephone com-
panies continued the practice of providing consumers
with a single telephone bill. The Federal Communica-
tions Commission later removed billing and collection
services provided by local telephone companies from
regulated tariff rates. In the 1990s, an industry emerged
of service providers eager to place charges on customers’
local telephone bills; “the types of charges that [now]
appear on local telephone bills . . . encompass far more
than long-distance services and can have almost
nothing to do with phone services.” Id; see also Unautho-
rized Charges on Telephone Bills, Staff Report, Senate Com-
No. 10-3903 9
mittee on Commerce, Science, and Transportation (July 12,
2011).
According to the FCC, “Crammers rely on confusing
telephone bills in an attempt to trick consumers into
paying for services they did not authorize or receive, or
that cost more than the consumer was led to believe.”
Dkt. 5, Ex. A, at 30 (FCC cramming brochure). Cramming
comes in a variety of forms, including small fees with
generic sounding descriptions like “service charges,”
intended to trick unwary telephone customers into
paying small extra monthly fees. These methods are
often effective—in a survey cited in a recent case in Cali-
fornia, nearly 97% of one crammer’s “customers” had not
agreed to the services for which they were charged, while
only 5% of those customers even noticed that they
had been billed. F.T.C. v. Inc21.com Corp., 745 F. Supp. 2d
975, 982 (N.D. Cal. 2010). An FCC brochure encourages
consumers to be vigilant in examining their telephone
bills to detect possible cramming, and warns: “If a local
telephone company, long distance telephone company,
or another type of service provider either accidentally
or intentionally places unauthorized, misleading, or de-
ceptive charges on your bill, you may have been
‘crammed.’ ” Dkt. 5, Ex. A, at 30 (FCC cramming brochure).
In 1998, the Indiana General Assembly responded to
cramming by enacting Indiana Code § 8-1-29-5(2), which
provides:
A customer of a telecommunications provider may
not be . . . billed for services by a telecommunica-
tions provider that without the customer’s authori-
10 No. 10-3903
zation added the services to the customer’s service
order.
Pursuant to its authority to implement the statute, the
Indiana Utility Regulatory Commission promulgated
170 IAC § 7-1.1-19, on which the plaintiff’s theory rests.
In particular, section 19(p) lists five kinds of documenta-
tion that certain types of telecommunications providers
must have in their possession before they charge their
customers. The regulation, which requires a little trans-
lation from “telephonese,” provides in relevant part:
(p) Except for tariff-regulated, customer-initiated, one-
time use products, such as collect calling services,
optional pay-per-use services (including automatic
callback, repeat dialing, and three-way calling), no
PIC or LEC or any billing agent acting for said PIC or
LEC shall bill a customer for any service unless the
PIC, LEC, or billing agent possesses written or elec-
tronic documentation that shows:
(1) the name of the customer requesting the ser-
vice;
(2) a description of the service requested by the
customer;
(3) the date on which the customer requested the
service;
(4) the means by which the customer requested
the service; and
(5) the name, address, and telephone number of
all sales agents involved.
No. 10-3903 11
(q) No PIC, LEC, or billing agent for any PIC
or LEC shall be entitled to any compensation from a
customer for services rendered in violation of this rule.
170 IAC § 7-1.1-19.2
The plaintiff argues that the defendants are billing
agents for PICs and LECs and violated the regulation
by failing to have in their possession all five forms of
required documentation. From this premise, plaintiff
argues that these defendants could never have had
proper authorization from the plaintiff, even if the
plaintiff orally agreed to be charged for services. Be-
cause the case comes to us on appeal from a grant of
summary judgment, we assume that the defendants
did not actually possess all five forms of documentation
listed in the regulation.
The anti-cramming regulation does not provide a
private cause of action, although 170 IAC § 7-1.1-19(q)
2
To translate, a PIC or primary interexchange carrier is a
“provider of presubscribed inter-LATA or intra-LATA long
distance telecommunications services. The term includes the
following: (A) Presubscribed facilities-based carriers of long
distance service. (B) Resellers of long distance service. (C) Local
exchange carriers providing long distance service.” 170 IAC § 7-
1.1-19(a). (“Inter-LATA” refers to communications between
two Local Access and Transport Areas, and “intra-LATA”
refers to communications within one LATA.) A LEC or local
exchange carrier is a “provider of switched telecommunica-
tions service that carries calls originating and terminating
within the local calling area.” Id.
12 No. 10-3903
provides a defense to a collection action: “No PIC, LEC, or
billing agent for any PIC or LEC shall be entitled to any
compensation from a customer for services rendered in
violation of this rule.” The plaintiff seeks to overcome
this lack of a statutory or regulatory cause of action with
two different claims: (a) a common law unjust enrich-
ment claim, and (b) a claim under the Deceptive Com-
mercial Solicitation Act.
There are three fatal problems with the plaintiff’s claims
that lead us to affirm summary judgment for the defen-
dants. First, the regulation simply does not apply to
these defendants in this case. They are not PICs or LECs,
and they did not act here as billing agents for a PIC or a
LEC. That is a problem for both of plaintiff’s theories.
Second, even if the regulation applied, there was no
unjust enrichment because the plaintiff orally ordered
and received the benefit of the services for which it
paid. Third, and again even if the regulation applied,
there was no violation of the Indiana Deceptive Commer-
cial Solicitation Act. The relevant portion of the statute
does not apply to services that were “ordered,” as the
services were in this case. We discuss these issues in turn.
2. Scope of the Regulation
The crux of the plaintiff’s proposed class action is that
a violation of the anti-cramming regulation, without
more, proves both unjust enrichment and a violation of
the Deceptive Commercial Solicitation Act. We con-
clude, however, that the plaintiff has not shown that the
No. 10-3903 13
defendants are actually bound by the anti-cramming
regulation. The regulation does not apply to these defen-
dants in this case because they are not PICs or LECs, and
because they did not act as billing agents for a PIC or
a LEC.
Lady Di’s insists that the defendants are “billing
agents” and bound by the anti-cramming regulation, but
it provides little rationale for its assumption other than
pointing to the defendants’ contracts with another LEC
(Verizon), in which the defendants supposedly repre-
sented that they were “billing agents.” See Dkt. 126, Ex. 3,
at 7 (ESBI/Verizon contract); Dkt. 128, Ex. 2, at 7 (ILD/
Verizon contract). The contracts with Verizon state that
“each Carrier” (including ESBI and ILD) “represents and
warrants that it has obtained all required authorizations
under Applicable Law to conduct business as a Telecom-
munications Services provider or billing agent in each
Verizon Billing Region in which Carrier has requested
that Verizon provide Billing Services.” The contract
language does not indicate that the defendants said
they would act as billing agents for Verizon. They are
instead billing agents for the service providers. And the
defendants’ contracts with AT&T make it crystal clear
that the defendants are AT&T’s customers, not its
agents. See Dkt. 142, Ex. 1, at 166 (ESBI/AT&T contract).
The anti-cramming regulation is not written to apply
the documentation requirements to “billing aggregators.”
It provides that “no PIC, LEC, or billing agent for any
PIC or LEC shall be entitled to any compensation. . . .” 170
IAC § 7-1.1-19(q). These defendants do not fall within
14 No. 10-3903
that language. They certainly are not PICs or LECs. They
do not provide local switched telecommunications
services or long-distance telecommunications services.
They also did not act here as billing agents for a PIC or a
LEC. An agent is a person authorized by another, the
principal, to act for him or in his place. Department of
Treasury v. Ice Service, 41 N.E.2d 201, 203 (Ind. 1942); see
also Oil Supply Co., Inc. v. Hires Parts Service, Inc., 726
N.E.2d 246, 248 (Ind. 2000) (noting that “[a]n agent is one
who acts on behalf of some person, with that person’s
consent and subject to that person’s control”). The undis-
puted facts show that the defendants in this case were
not billing agents for a PIC or a LEC because (1) they
were not authorized by a PIC or a LEC to act for it,
(2) they were not entrusted with the business of a PIC
or a LEC, and (3) they were not retained by a PIC or a LEC
to provide services. Instead, the LEC charged these de-
fendants a fee for billing and collecting money from
its customers on behalf of these defendants and
their service providers. (While service providers could
perhaps include companies that also fit the definition of
a PIC or a LEC, see Micronet, Inc. v. Indiana Utility Regula-
tory Comm’n, 866 N.E.2d 278, 294-95 (Ind. App. 2007),
there is no evidence that any of the service providers
here were PICs or LECs.)
The Indiana Utility Regulatory Commission anti-cram-
ming regulation puts the burden to comply on the entities
that it regulates directly, the PICs and LECs, plus their
agents. Where a billing aggregator is not acting as an
agent for a PIC or a LEC, nothing in the regulation as it
is currently written requires these billing aggregators to
No. 10-3903 15
comply with the authorization documentation require-
ments in 170 IAC § 7-1.1-19(p).3
3. Unjust Enrichment
Even if the Indiana regulation applied to these defen-
dants, they would still be entitled to summary judgment
on plaintiff’s unjust enrichment claim. Unjust enrich-
ment is an equitable doctrine wherein a person who has
been “unjustly enriched at the expense of another is
required to make restitution to the other.” Restatement
of Restitution § 1 (1937), cited in Bayh v. Sonnenburg, 573
N.E.2d 398, 408 (Ind. 1991). “Unjust enrichment is also
referred to as quantum meruit, contract implied-in-law,
constructive contract, or quasi-contract.” Coppolillo v.
Cort, 947 N.E.2d 994, 997 (Ind. App. 2011). It allows
for recovery “where the circumstances are such that
under the law of natural and immutable justice there
should be a recovery.” Id., quoting Zoeller v. E. Chicago
Second Century, Inc., 904 N.E.2d 213, 220 (Ind. 2009). To
prevail on an unjust enrichment claim under Indiana
law, “a plaintiff must establish that a measurable benefit
has been conferred on the defendant under such circum-
3
The LECs and PICs who contract with billing aggregators
need to ensure their own compliance, of course, and one way
to do so is through contracts with their own customers (the
billing aggregators and service providers) that require them to
provide the LECs and PICs with the required documentation.
Those contractual arrangements, however, do not subject the
billing aggregators directly to the regulation itself.
16 No. 10-3903
stances that the defendant’s retention of the benefit
without payment would be unjust.” Bayh, 573 N.E.2d at
408; accord, Creative Demos, Inc. v. Wal-Mart Stores, Inc.,
142 F.3d 367, 372 (7th Cir. 1998), quoting Wright v.
Pennamped, 657 N.E.2d 1223, 1229-30 (Ind. App. 1995).
There is simply nothing inequitable or unjust about
the plaintiff paying for services it ordered and received.
To counter this common-sense conclusion, plaintiff relies
on the language of the anti-cramming regulation, which
provides that a billing agent is not “entitled to any com-
pensation from a customer for services rendered in vio-
lation of this rule.” 170 IAC § 7-1.1-19(q). The plaintiff
argues that this provision means that a billing agent
who violates the regulation and collects money cannot
justly keep any of the payment for services actually
ordered and rendered. We disagree. The plaintiff’s
theory of unjust enrichment cannot be reconciled with
the way Indiana courts understand it, as a doctrine to
“promote justice and equity.” Wright, 657 N.E.2d at 1229.
We do not believe the Indiana courts would use the
equitable doctrine of unjust enrichment to convert a
technical violation of a regulation into a right of action
that would produce a (tiny) windfall for an individual
customer who actually ordered, received the benefit of,
and paid for the services in question.
Relying primarily on two cases, however, the plaintiff
argues that Indiana courts would allow a customer to
recover payments made to a service provider if the
charges were legally prohibited. See Lawson v. First
Union Mortgage Co., 786 N.E.2d 279 (Ind. App. 2003);
No. 10-3903 17
Michener v. Watts, 96 N.E. 127 (Ind. 1911). We are not
persuaded. Lawson and Michener are readily distinguish-
able.
The plaintiff in Michener sought complete rescission of
the contract, which is not possible here. In Michener, a
vendee paid a vendor $300 cash for a patent right, with
the understanding that the vendor had complied with
laws governing the sale of patents. When the vendee
realized that the vendor had not complied with the law,
he sought to rescind the contract and tendered the
vendor a reassignment of the patent right in exchange
for repayment of the $300. The Indiana Supreme Court
found that the vendee was entitled to relief: where “a
contract is prohibited by a positive statute, enacted to
protect the vendee as against the vendor . . . the parties
have been held not to be in pari delicto, and the person
for whose protection the statute was enacted has been
permitted to recover the money or property parted with
by him.” Michener, 96 N.E. at 127. Unlike the situation
in Michener, however, Lady Di’s cannot return the
services it has received and from which it has already
benefitted.
In Lawson, the plaintiff filed an equitable claim for
money had and received stemming from a mortgage
financing. The trial court dismissed the complaint
for failure to state a claim for relief, and the Indiana
Court of Appeals reversed. Lawson alleged that the
defendant mortgage company unlawfully charged a
documentation fee for his mortgage. The appellate
court found that the mortgage company could not “use
18 No. 10-3903
a prohibited provision” of a contract — in that case, the
provision that called for a documentation fee — to “pre-
clude recovery under an equitable claim.” Lawson,
786 N.E.2d at 284. While the court reversed the dis-
missal for failure to state a claim upon which relief
could be granted, it made clear that if the defendant
could show a legitimate reason for charging the docu-
mentation fee, equity would not require the return of
the money. Id. at 285. The undisputed facts here show
that there was indeed a legitimate reason for charging
the fees: plaintiff ordered and received the services.
If Indiana wants to create a private right of action for
a violation of the anti-cramming law, it can do so by
statute, or perhaps by regulation. It has not done so yet.
If a customer is a victim of genuine cramming — charged
for unwanted services that were not ordered — the equita-
ble doctrine of unjust enrichment might well be applica-
ble. But the doctrine of unjust enrichment cannot be
used in this way by a customer like plaintiff, who
actually ordered and received the services.4
4. Statutory Deception
We next turn to the plaintiff’s argument that the defen-
dants made false representations in order to collect pay-
4
The district court found that there was no unjust enrich-
ment because the plaintiff had been reimbursed in full for the
charges it paid. That is also true, but we view the problems
with plaintiff’s claim as even more fundamental, not depending
on the refunds.
No. 10-3903 19
ments to which they were not entitled under Indiana
law. Under the Deceptive Commercial Solicitation Act:
A person may not, with intent to deceive, knowingly
or intentionally send, deliver, or transmit a bill, an
invoice, or a statement of account due, or a writing
that could reasonably be interpreted as a bill, an
invoice, or a statement of account due, to solicit pay-
ment of money by another person for goods not yet
ordered or for services not yet performed and not yet ordered.
Ind. Code § 24-5-19-3 (emphasis added). The plain lan-
guage of the statute — applying only where a customer
is billed for services “not yet ordered” — shows that it
does not apply here, where the plaintiff in fact ordered
the services for which it was charged. That is exactly
what the plaintiff did in orally requesting and agreeing
to pay for services from Advanced and My Local Reach.
The plaintiff argues that because the defendants did not
comply with the anti-cramming regulation, the plaintiff
could not have “legally ordered” the services because
“any agreement to purchase the service [was] rendered
void by ESBI’s and ILD’s failure to comply with the anti-
cramming law.” Pl. Br. at 24. To support this argument,
the plaintiff relies on Indiana decisions saying that
“[a] contract made in violation of a statute is void.”
Continental Basketball Ass’n, Inc. v. Ellenstein Enterprises,
Inc., 640 N.E.2d 705, 711 (Ind. App. 1994), rev’d in part, 669
N.E.2d 134, 139-41 (Ind. 1996); see also Faust v. Design
Consultants, Inc., 542 N.E.2d 1383, 1384 (Ind. App. 1989)
(“When a statute fixes certain requirements as conditions
precedent to the right to carry on a particular business,
noncompliance with the statute renders void any con-
20 No. 10-3903
tracts made in carrying on the business, even if the
statute contains no provisions to that effect.”). We must
assume the defendants failed to comply with the anti-
cramming regulation, but we do not find this argu-
ment convincing for two reasons. First, if a contract is
deemed “void,” it would be unusual to allow one party
to the void contract thereby to have a court order the
other party to restore the consideration paid on one
side without a similar restoration of consideration by
the plaintiff. Second, and perhaps more simply, even if
the agreement is void and thus unenforceable, the
plaintiff still “ordered” services from My Local Reach
and Advanced, so the statute that provides the cause
of action does not apply.
By way of further explanation, first, plaintiff’s voidness
theory is highly unusual. When a court says that a contract
is void, it usually means that the entire agreement, such
as an illegal gambling contract, is not enforceable in
court by either party. E.g., 1 Richard A. Lord, Williston
on Contracts § 1:20 (4th ed. 2007 & Supp. 2011). The courts
simply leave the parties where they find them, providing
relief to neither side. That is how the Indiana Supreme
Court used the term, for example, in Continental Basketball
Ass’n, Inc. v. Ellenstein Enterprises, Inc., 669 N.E.2d 134
(Ind. 1996). The issue was whether a franchise contract
should be enforced despite several violations of state
franchise statutes. The court held that the franchise con-
tract was not void, despite the violations, and understood
the issue as whether the party who had violated the
statutes could obtain relief from the other party despite
statutory violations. Id. at 139-41; accord, Straub v. B.M.T.,
No. 10-3903 21
645 N.E.2d 597 (Ind. 1994) (holding that preconception
agreement purporting to absolve father of liability for
support of child was void and thus unenforceable); see
also Shelley v. Kraemer, 334 U.S. 1 (1948) (holding that
racial restrictive covenants were void as unconstitutional
and thus unenforceable). This understanding of voidness
distinguishes this case from the cases plaintiff cites and
other similar cases.5 Plaintiff has not offered a persuasive
reason to think that the Indiana courts would take
the unusual step of first holding a contract void because
of a statutory violation and then awarding damages to
one party to the contract, who could retain the entire
benefit of the completed bargain.
Second, we must return to the statute in question,
the Deceptive Commercial Solicitation Act, which can
apply when a person is billed for services she did not
order. Plaintiff seeks relief under that statute, not under
a common law theory based on a supposedly void con-
tract. Even if the agreements in question are void, the
plaintiff still “ordered” the services. The defendants
did not violate the statute that provides the right of
5
See, e.g., Mullikin v. Davis, 53 Ind. 206 (Ind. 1876) (where liquor
was sold illegally, seller could not recover damages from buyer
for purchase price); First Federal Savings Bank of Indiana v. Galvin,
616 N.E.2d 1048, 1052 (Ind. App. 1993) (considering whether
plaintiff could recover commission for finding buyer of real
estate despite lack of broker’s license); Hoffman v. Dunn, 496
N.E.2d 818 (Ind. App. 1986) (where plaintiff was not licensed
real estate broker, contract was void and plaintiff could not
recover damages).
22 No. 10-3903
action, so they were entitled to summary judgment on
the claim under that statute.6
B. Class Certification
We turn finally to the class certification issue. Plaintiff
sought to represent two plaintiff classes, one for each
defendant’s customers, under Federal Rule of Civil Pro-
cedure 23(b)(3), which requires, among other elements,
that common issues of fact or law must predominate
over individual issues. The district court found that
the proposed classes failed this requirement of
Rule 23(b)(3) because the details of each customer’s
individual transactions would need to be examined to
consider whether the claims for unjust enrichment or
statutory deception were proven. Plaintiff’s arguments
against this conclusion essentially mirror its argu-
ments against the grant of summary judgment. Because
a showing of a violation of the anti-cramming regula-
tion, without more, would not prove either unjust enrich-
ment or statutory deception, however, we agree with
the district court that common issues would not pre-
dominate. See also Brown v. SBC Communications, Inc., 2009
WL 260770, at *3 (S.D. Ill. Feb. 4, 2009) (denying class
certification in nearly identical case for same reason).
We affirm the denial of class certification.
6
Because we affirm the district court’s decision to grant the
defendants’ motions for summary judgment as to all of the
disputed transactions, we need not address the voluntary
payment doctrine.
No. 10-3903 23
The judgment of the district court is AFFIRMED.
8-16-11