In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 11-‐‑3188 & 11-‐‑3746
IRA HOLTZMAN, C.P.A., & ASSOCIATES LIMITED, individually
and as representative of a class,
Plaintiff-‐‑Appellee,
v.
GREGORY P. TURZA,
Defendant-‐‑Appellant.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 08 C 2014 — Robert W. Gettleman, Judge.
____________________
ARGUED MAY 22, 2012 — DECIDED AUGUST 26, 2013
____________________
Before EASTERBROOK, Chief Judge, and WILLIAMS and
TINDER, Circuit Judges.
EASTERBROOK, Chief Judge. Believing that CPAs would
find his services attractive, attorney Gregory Turza sent
more than 200 of them occasional fax sheets containing busi-‐‑
ness advice. The faxes produced more business—but not for
Turza. He became the defendant in this suit under the Tele-‐‑
phone Consumer Protection Act of 1991, 47 U.S.C. §227,
Nos. 11-‐‑3188 & 11-‐‑3746 2
which prohibits any person from sending unsolicited fax
advertisements. Even when the Act permits fax ads—as it
does to persons who have consented to receive them, or to
those who have established business relations with the
sender—the fax must tell the recipient how to stop receiving
future messages. 47 U.S.C. §227(b)(1)(C)(iii), (2)(D). Turza’s
faxes did not contain opt-‐‑out information, so if they are
properly understood as advertising then they violate the Act
whether or not the recipients were among Turza’s clients.
The faxes bear the masthead The “Daily Plan-‐‑It”, but
they were not produced by Perry White’s editorial staff and
came every other week rather than daily. Although they car-‐‑
ry Turza’s byline, and a notice claiming copyright in his
name, they had been written by employees of Top of Mind, a
marketing firm, which sold the concept (and the copy) to
anyone who wanted promotional material. Turza did not
edit or even review the faxes before they were sent in his
name. But Turza does not contend that Top of Mind is re-‐‑
sponsible as the “person” who sent the faxes. The district
court held that the faxes are “unsolicited advertisements”
and entered summary judgment against Turza. 2010 U.S.
Dist. LEXIS 80756 (N.D. Ill. Aug. 3, 2010).
The court earlier had certified a class of the faxes’ recipi-‐‑
ents. 2009 U.S. Dist. LEXIS 95620 (N.D. Ill. Oct. 14, 2009). In
2011 the court denied a motion to reconsider both the class
certification and the decision on the merits. 2011 U.S. Dist.
LEXIS 97666 (N.D. Ill. Aug. 29, 2011). The court ordered Tur-‐‑
za to pay $500 in statutory damages for each of 8,430 faxes.
The total comes to $4,215,000. In its final order, the district
judge allocated this sum as follows: $7,500 to the representa-‐‑
tive plaintiff, which received 32 faxed editions of The “Daily
3 Nos. 11-‐‑3188 & 11-‐‑3746
Plan-‐‑It” (although the judge called this an “incentive
award”, it is less than the $16,000 entailed by 32 faxes at $500
a fax); $1,430,055.90 to class counsel for attorneys’ fees and
expenses; and any residue, after payments to class members,
to the Legal Assistance Foundation of Metropolitan Chicago
“as a cy pres award”. Oddly, the judge did not say how much
each recipient who submits a claim receives. Is it $500 per
fax, on the assumption that enough would go unclaimed to
cover the attorneys’ fees? Or is it $330.72 per fax, the number
appropriate if attorneys’ fees (and the award to plaintiff)
come off the top? The question may be academic, because
Turza has not ponied up the fund and may be unable to do
so. But we must reach the procedural and substantive ques-‐‑
tions before deciding how much Turza owes.
Class certification is normal in litigation under §227, be-‐‑
cause the main questions, such as whether a given fax is an
advertisement, are common to all recipients. See Brill v.
Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005).
There can be doubt about whether a particular person is a
good representative of the class, and whether class counsel is
suitable, see Creative Montessori Learning Centers v. Ashford
Gear LLC, 662 F.3d 913 (7th Cir. 2011); CE Design Ltd. v. King
Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011), but
Turza does not question the adequacy of the class repre-‐‑
sentative or its chosen counsel. Because Top of Mind omitted
opt-‐‑out notices, it does not matter which recipients consent-‐‑
ed or had an established business relation with Turza. Con-‐‑
trast Gene & Gene LLC v. Biopay LLC, 541 F.3d 318 (5th Cir.
2008). Nonetheless, he contends, class certification is inap-‐‑
propriate because individual issues about who received how
many faxes predominate over the common questions.
Nos. 11-‐‑3188 & 11-‐‑3746 4
To the extent Turza contends that each recipient must
prove that he printed the fax (wasting paper) or otherwise
suffered monetary loss, he is wrong on the law. The statute
provides a $500 penalty for the annoyance. 47 U.S.C.
§227(b)(3)(B). Even a recipient who gets the fax on a com-‐‑
puter and deletes it without printing suffers some loss: the
value of the time necessary to realize that the inbox has been
cluttered by junk. That loss, and the statutory remedy, are
the same for all recipients; the sort of problem that prevent-‐‑
ed class certification in Comcast Corp. v. Behrend, 133 S. Ct.
1426 (2013), does not arise.
To the extent Turza contends that each recipient must
prove that his fax machine or computer received the fax, he
is right on the law but wrong on the facts. The record estab-‐‑
lishes which transmissions were received and which were
not. Top of Mind hired MessageVision to send the faxes. It
compiled information about which faxes were received, and
by whom; no reasonable juror could conclude that these data
are inaccurate.
Transmitting a fax requires a sending and a receiving
machine to communicate using a standard protocol. If the
transmission ends successfully, the receiving machine sends
a code indicating this. MessageVision kept a log of the codes
received during the process of sending Turza’s faxes. This
log shows that it tried to send a total of 11,945 faxes to 221
unique numbers; the receiving fax machines reported that
8,630 of these were delivered successfully. (Five persons,
who collectively received 200 faxes, opted out of the class;
that’s why the district court used 8,430 faxes as the basis for
calculating damages.) Turza has not offered any reason to
think that MessageVision’s fax machines recorded the codes
5 Nos. 11-‐‑3188 & 11-‐‑3746
inaccurately or that its software maintained the log incor-‐‑
rectly. There is accordingly no need for recipient-‐‑by-‐‑
recipient adjudication, and the district court did not err in
concluding “that the questions of law or fact common to
class members predominate over any questions affecting on-‐‑
ly individual members”. Fed. R. Civ. P. 23(b)(3).
Turza relies on Laouini v. CLM Freight Lines, Inc., 586 F.3d
473 (7th Cir. 2009), for the proposition that electronic con-‐‑
firmation of a fax’s receipt could be refuted by other evi-‐‑
dence. That’s true enough. The question in Laouini was
whether a charge of discrimination had been received by the
agency on the last date allowed for filing. Plaintiff produced
a record of a successful fax transmission on that date—but
perhaps plaintiff had faxed a document other than a charge
of discrimination (none was in the agency’s records), or per-‐‑
haps the clock on the sender’s fax machine was incorrect and
the transmission was too late. We held in Laouini that in the
absence of evidence on such matters, however, the electronic
confirmation suffices. That’s equally true here, because the
record would not permit reasonable jurors to reject the fax
log. Indeed, this case is easier, because there is no doubt what
MessageVision sent out, and when each issue of The “Daily
Plan-‐‑It” was sent does not matter.
That Ira Holtzman, the principal of the representative
plaintiff, retained and remembers only one of the faxes does
not call the logs into question. Holtzman testified by deposi-‐‑
tion that his secretary screened and deleted unwanted faxes.
Turza has not demonstrated that even a single entry in Mes-‐‑
sageVision’s log was inaccurate, and its corporate repre-‐‑
sentative explained in detail how the logs were compiled.
There is no material dispute requiring trial.
Nos. 11-‐‑3188 & 11-‐‑3746 6
The only question on the merits is whether the faxes con-‐‑
tained ads. “Unsolicited advertisement” is a defined term,
meaning “any material advertising the commercial availabil-‐‑
ity or quality of any property, goods, or services which is
transmitted to any person without that person’s prior ex-‐‑
press invitation or permission, in writing or otherwise.” 47
U.S.C. §227(a)(5). The faxes Top of Mind devised for Turza
may not have touted the quality of his services, but they did
declare their availability. Here is a copy of the first issue
plaintiff received:
7 Nos. 11-‐‑3188 & 11-‐‑3746
Nos. 11-‐‑3188 & 11-‐‑3746 8
Like the other issues, this one devotes about 75% of the
space to mundane advice and the remainder to Turza’s
name, address, logo, and specialties. The district court
thought it impossible for any reasonable juror to doubt that
this fax plugs the commercial availability of Turza’s services.
Top of Mind told its clients, including Turza, that The “Daily
Plan-‐‑It” is a “promotional” device, and Turza’s own lawyer
called it “marketing” in his brief and oral argument. That
simply recognizes the obvious.
Turza contends that the 25% of the fax alerting potential
clients to the availability of his services is “merely inci-‐‑
dental” to the 75% that delivers business advice. But the
statute does not ask whether a notice of availability is inci-‐‑
dental to something else. If Macy’s faxes potential customers
a page from the New York Times that is devoted 75% to news
about international relations and 25% to an ad for goods on
sale at Macy’s, it has sent an advertisement. That 75% of the
page is not an ad does not detract from the fact that the fax
contains an advertisement.
Section 227(b)(2) gives the Federal Communications
Commission authority to issue regulations implementing the
statute, and Turza maintains that the FCC has adopted a rule
that incidental ads don’t count under the Act. Turza does not
cite to any such regulation, however. The FCC has defined
“advertisement” in language that closely tracks the statute.
“The term advertisement means any material advertising the
commercial availability or quality of any property, goods, or
services.” 47 C.F.R. §64.1200(f)(1). The “Daily Plan-‐‑It” satis-‐‑
fies that definition; we are tempted to ask what part of “any”
Turza finds hard to understand. (We have quoted the cur-‐‑
rent definition; the regulation in force when Turza sent his
9 Nos. 11-‐‑3188 & 11-‐‑3746
ads defined “unsolicited advertisement” in the statutory
language. See 47 C.F.R. §64.1200(f)(13) (2007).)
The FCC’s use of “incidental” appears not in the regula-‐‑
tion but in the explanation the agency gave when adopting
the regulation. The FCC wrote:
[F]acsimile communications that contain only information, such
as industry news articles, legislative updates, or employee bene-‐‑
fit information, would not be prohibited by the [statutory] rules.
An incidental advertisement contained in such a newsletter does
not convert the entire communication into an advertisement. (In
determining whether an advertisement is incidental to an infor-‐‑
mational communication, the Commission will consider, among
other factors, whether the advertisement is a bona fide “informa-‐‑
tional communication.” In determining whether the advertise-‐‑
ment is to a bona fide “informational communication,” the
Commission will consider whether the communication is issued
on a regular schedule; whether the text of the communication
changes from issue to issue; and whether the communication is
directed to specific regular recipients, i.e., to paid subscribers or
to recipients who have initiated membership in the organization
that sends the communication. The Commission may also con-‐‑
sider the amount of space devoted to advertising versus the
amount of space used for information or “transactional” mes-‐‑
sages and whether the advertising is on behalf of the sender of
the communication, such as an announcement in a membership
organization’s monthly newsletter about an upcoming confer-‐‑
ence, or whether the advertising space is sold to and transmitted
on behalf of entities other than the sender). Thus, a trade organi-‐‑
zation’s newsletter sent via facsimile would not constitute an un-‐‑
solicited advertisement, so long as the newsletter’s primary pur-‐‑
pose is informational, rather than to promote commercial prod-‐‑
ucts. The Commission emphasizes that a newsletter format used
to advertise products or services will not protect a sender from
liability for delivery of an unsolicited advertisement under the
[statute] and the Commission’s rules. The Commission will re-‐‑
view such newsletters on a case-‐‑by-‐‑case basis.
Nos. 11-‐‑3188 & 11-‐‑3746 10
71 Fed. Reg. 25967, 25973 (May 3, 2006).
This passage is mysterious. It does not elaborate on the
meaning of the word “advertisement” in the statute or regu-‐‑
lation. Instead it discusses the meaning of “informational
communication”, a phrase that does not appear in either
§227 or the regulation. It seems to be a species of untethered
legislative history—and the Supreme Court has told us that,
although legislative history may assist in understanding an
ambiguous text, a freestanding declaration untied to an
adopted text must be ignored. See, e.g., Puerto Rico Depart-‐‑
ment of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495,
501 (1988); Lincoln v. Vigil, 508 U.S. 182, 192 (1993).
Perhaps this passage is best understood as a declaration
of the Commission’s enforcement plans. Section 227 author-‐‑
izes private litigation, however; recipients need not depend
on the FCC. At all events, even the passage on which Turza
so heavily relies declares that “a newsletter format used to
advertise products or services will not protect a sender from
liability for delivery of an unsolicited advertisement”. The
“Daily Plan-‐‑It” has a newsletter format, but it is not remotely
like a trade association’s newsletter to its members or a law
firm’s newsletter alerting clients to legal developments. The
plug for Turza’s services was not incidental to a message
that would have been sent anyway; promotion or marketing
was the reason these faxes were transmitted. Like the district
court, we conclude that The “Daily Plan-‐‑It” is an advertise-‐‑
ment as a matter of law.
Now for the remedy. The district judge ordered Turza to
pay $4,215,000 but did not say to whom. To the court’s regis-‐‑
try? To plaintiff’s lawyers, as agents for the class’s members?
To a third-‐‑party administrator? None of the individual class
11 Nos. 11-‐‑3188 & 11-‐‑3746
members is entitled to $4,215,000 or anything like that
much—and it is the persons who got the faxes, not “the
class” as a whole, who are entitled to damages under
§227(b)(3). A class certified under Rule 23(b)(3) is not a jurid-‐‑
ical entity. Decisions such as Zahn v. International Paper Co.,
414 U.S. 291 (1973), and Clark v. Paul Gray, Inc., 306 U.S. 583
(1939), which hold that class members’ losses cannot be ag-‐‑
gregated to reach the minimum required for diversity juris-‐‑
diction, demonstrate this principle. Each class member has
an interest in his own damages. See Gilman v. BHC Securities,
Inc., 104 F.3d 1418, 1427 (2d Cir. 1997). Some class actions
stem from aggregate and undifferentiated injuries; these cre-‐‑
ate genuine common funds. But this action stems from dis-‐‑
crete injuries suffered by each recipient of the faxes; it does
not create a common fund. Travelers Property Casualty v.
Good, 689 F.3d 714 (7th Cir. 2012), discusses how to identify
genuine common-‐‑fund cases.
Because the district judge contemplated that Turza
would pay a lump sum to (or for) the class as a whole, the
judge had to decide what would happen if some of the mon-‐‑
ey went unclaimed. Without soliciting the parties’ views, the
judge declared that any residue would be turned over to a
charity rather than be returned to Turza. (Plaintiff contends
that Turza forfeited any objection to this decision by not pro-‐‑
testing it in the district court, but “[a] formal exception to a
ruling or order is unnecessary.” Fed. R. Civ. P. 46. Given the
opportunity, parties must state their positions before the
fact; they need not remonstrate with a judge who decides an
issue without giving the litigants a chance to state their posi-‐‑
tions.) The judge did ask the parties which charity they pre-‐‑
ferred, and from their suggestions he selected the Legal As-‐‑
sistance Foundation of Metropolitan Chicago. He called this
Nos. 11-‐‑3188 & 11-‐‑3746 12
a “cy pres award”, but as we explained in Mirfasihi v. Fleet
Mortgage Corp., 356 F.3d 781, 784 (7th Cir. 2004), this is a
misnomer—though one common in the legal literature. See
Comment, Damage Distribution in Class Actions: The Cy Pres
Remedy, 39 U. Chi. L. Rev. 448 (1972) (using the cy pres doc-‐‑
trine of trust law as an analogy).
Turza contends that any residue belongs to him. The dis-‐‑
trict judge thought otherwise but did not say why—and, as
it is far from clear that Turza has the money needed to pay
the class members who submit claims, it is premature to de-‐‑
cide whether and, if so, when, defendants are entitled to re-‐‑
funds of any surplus. The district judge may not have appre-‐‑
ciated the difference between common-‐‑fund suits and those
that arise from individual injuries. It may well make sense
for the district judge to direct Turza to pay the damages into
the court’s registry, or to a third-‐‑party administrator, so that
members of the class can receive pro rata distributions if it
turns out that Turza cannot satisfy the full award. Only if
Turza pays more than enough to satisfy all claims by class
members will it be necessary to decide whether the residue
goes back to him or is put to some other use.
This also means that it was premature for the district
court to have directed that any remainder be turned over to
a particular charity. It was doubly inappropriate to enter
such an order without soliciting argument from the litigants
and without discussing the difference between common-‐‑
fund suits and those involving the use of the class device to
vindicate individually held claims.
Charitable distribution of remainders in class actions
originated when courts had to deal with non-‐‑reverter clauses
in common-‐‑fund settlements. If the defendant settles a suit
13 Nos. 11-‐‑3188 & 11-‐‑3746
for a sum certain, and disclaims any right to whatever re-‐‑
mains after claims from class members have been paid, then
the court has to do something with what’s left over. Escheat
to the state is one possibility. Another is an augmented re-‐‑
covery for those class members who submitted claims. Still a
third option, under the cy pres banner, is distribution to a
group that will use the money for the benefit of class mem-‐‑
bers. This third option is most useful when individual stakes
are small, and the administrative costs of a second round of
distributions to class members might exceed the amount
than ends up in class members’ pockets.
Our case did not end in settlement and is not a common-‐‑
fund situation. Turza did not agree to give up his interest in
money unclaimed by class members. The stakes per fax are
large enough to make a second round of distribution feasi-‐‑
ble. And the Legal Assistance Foundation of Metropolitan
Chicago does not directly or indirectly benefit certified pub-‐‑
lic accountants, the victims of Turza’s junk faxes. The Foun-‐‑
dation is a worthy organization, but many courts have ex-‐‑
pressed skepticism about using the residue of class actions to
make contributions to judges’ favorite charities. See, e.g., In
re Lupron Marketing & Sales Practices Litigation, 677 F.3d 21,
31–38 (1st Cir. 2012); Klier v. Elf Atochem North America, Inc.,
658 F.3d 468, 475–76 (5th Cir. 2011), and id. at 480–82 (Jones,
C.J., concurring); Nachshin v. AOL, LLC, 663 F.3d 1034, 1038–
39 (9th Cir. 2011).
Money not claimed by class members should be used for
the class’s benefit to the extent that is feasible. See Six Mexi-‐‑
can Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir.
1990); Dennis v. Kellogg Co., 687 F.3d 1149 (9th Cir. 2012). See
also, e.g., ALI, Principles of the Law of Aggregate Litigation
Nos. 11-‐‑3188 & 11-‐‑3746 14
§3.07 (2010); Martin H. Redish, Peter Julian & Samantha
Zyontz, Cy Pres Relief and the Pathologies of the Modern Class
Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617
(2010). Perhaps that would not be feasible here, making oth-‐‑
er charities more suitable as recipients, but the absence of an
adversarial presentation—and the considerable doubt that
Turza will be able to pay enough to allow full payment to
class members who submit claims—means that such a deci-‐‑
sion would be premature.
The district court’s decision on the merits is affirmed,
but the remedial order is vacated. The case is remanded with
instructions to enter a judgment requiring Turza to remit to
the registry or to a third-‐‑party administrator. Once the court
knows what funds are available for distribution, it should (if
necessary) reconsider how any remainder will be applied. It
may also be necessary to reconsider the “incentive award” to
the representative plaintiff (which appears to be a “disincen-‐‑
tive award”) and the way in which class counsel are com-‐‑
pensated. See Boeing Co. v. Van Gemert, 444 U.S. 472 (1980).