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Sparkle Hill, Inc. v. Interstate Mat Corp.

United States Court of Appeals, First Circuit

June 3, 2015

SPARKLE HILL, INC. and WILLIAM WARMING, individually and as the representatives of a class of similarly situated persons, Plaintiffs, Appellants,
v.
INTERSTATE MAT CORPORATION, Defendant, Appellee

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Rya W. Zobel, U.S. District Judge.

Phillip A. Bock, with whom Tod A. Lewis, Bock & Hatch, LLC, Brian J. Wanca, David M. Oppenheim, Anderson Wanca, Edward M. Swartz, Alan L. Cantor, and Swartz & Swartz, were on brief, for appellants.

Scott T. Ober, with whom David F. Hassett, Margarita I. Warren, and Hassett & Donnelly, P.C., were on brief, for appellee.

Before Torruella, Thompson, and Kayatta, Circuit Judges.

OPINION

Page 26

KAYATTA, Circuit Judge.

Nine years ago, plaintiffs Sparkle Hill, Inc., and its vice president and owner William Warming (collectively, " Sparkle Hill" ) received an unsolicited advertisement on Sparkle Hill's fax machine from defendant Interstate Mat Corporation (" Interstate" ). Not one to act hastily, Sparkle Hill filed suit against Interstate in federal district court almost five years later, alleging a violation of the Telephone Consumer Protection Act (" the Act" ), 47 U.S.C. § 227. The Act allows recipients of unsolicited fax advertisements to recover from the sender $500 in statutory damages (trebled for willful and knowing violations) for each fax transmission. Id. § 227(b)(1)(C), (b)(3). Invoking Federal Rule of Civil Procedure 23(b)(3), Sparkle Hill sought to proceed both individually and on behalf of others who also received an identical fax from Interstate in May 2006. Interstate sought summary judgment on the ground that a four-year statute of limitations barred Sparkle Hill's claim. Sparkle Hill filed no opposition, and the district court thereupon entered summary judgment dismissing the case. We now affirm.

I. Background

The parties do not dispute the facts relevant to this appeal. Interstate, a Massachusetts

Page 27

corporation with four employees, paid a marketing firm $496.40 to fax to 10,000 potential customers a one-page advertisement for Interstate's antifatigue floor mats. In May 2006, the marketing firm transmitted Interstate's advertisement to 8,416 recipients. One of those recipients was Sparkle Hill, a New Jersey corporation. Another was West Concord 5-10-1.00 Store, Inc. (" West Concord" ), a Massachusetts corporation. Aside from later litigation, Interstate never received any response to its fax advertisement.

More than three and a half years later, on January 28, 2010, West Concord--represented by the same plaintiffs' counsel who now represent Sparkle Hill--filed a class action against Interstate in Massachusetts superior court for sending unsolicited fax advertisements in violation of the Act. See 47 U.S.C. § 227(b)(1)(C), (b)(3). The state court complaint alleged a class of " [a]ll persons" who received a fax advertisement from Interstate.

More than one year after West Concord filed the state class action and nearly five years after the fax transmissions, Sparkle Hill filed this lawsuit in federal district court individually and on behalf of a class of " [a]ll persons" who received a fax from Interstate. Given a putative class of more than 8,000 fax recipients, and statutory damages of $500 for each fax sent, Interstate faced more than $4,000,000 in damages liability, potentially tripled if Interstate was found to have willfully and knowingly violated the Act. Id. § 227(b)(3).

On May 22, 2012, West Concord filed a motion in state court to certify a class of " [a]ll persons in Massachusetts who were successfully sent a facsimile" from Interstate in May 2006. About a month later, Sparkle Hill moved in federal district court to certify a class of " [a]ll persons who were successfully sent a facsimile" from Interstate in May 2006. The federal district court acted first, and certified Sparkle Hill's requested class on December 18, 2012. Sparkle Hill, Inc. v. Interstate Mat Corp., No. 11-cv-10271-RWZ, 2012 WL 6589258, at *5 (D. Mass. Dec. 18, 2012); see also Fed.R.Civ.P. 23(b)(3). Several months later, the state trial court refused to certify a class of Massachusetts fax recipients because of the court's doubts about West Concord's ability to represent the class, the lack of predominant common facts, the " enormous contrast between Interstate Mat's potential liability and the actual harm suffered by potential class members," and the " inescapable [conclusion] that these class actions exist for the benefit of the ...


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