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Clough v. Revenue Frontier, LLC

United States District Court, D. New Hampshire

June 19, 2019

Robert W. Clough, II on behalf of himself and other similarly situated
Revenue Frontier, LLC et al.

          Alex M. Washkowitz, Esq. Edward A. Broderick, Esq. Jeremy A. Cohen, Esq. Matthew P. McCue, Esq. Roger B. Phillips, Esq. Ari N. Rothman, Esq. Daniel S. Blynn, Esq. Justin B. Nemeroff, Esq. Shahin O. Rothermel, Esq. Arnold Rosenblatt, Esq. Kathleen M. Mahan, Esq.



         Robert W. Clough, II, filed this action on behalf of himself and similarly situated individuals under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, against Revenue Frontier, LLC, Supreme Data Connections, LLC, and William Adomanis. The complaint alleges that the defendants violated the TCPA by sending unsolicited text messages advertising the services of National Tax Experts, Inc., to Clough and other recipients using an automatic telephone dialing system. Clough has moved to certify a plaintiff class and appoint his attorneys as class counsel. The defendants object, arguing that Clough lacks Article III standing and cannot meet the requirements of Federal Rule of Civil Procedure 23.

         I. BACKGROUND

         On June 14, 2017, Clough received a text message on his cellular telephone. The message stated, “Hi, Did you ever take care of your IRS/State Tax Debt? I can eliminate back taxes, penalties, liens, levies. . . Call us for help.” Am. Compl. ¶ 30, Doc. No. 88. Although Clough did not owe any back federal or state taxes, he called the number from which the text was sent, provided a fake name, and feigned interest in the solicited services to identify the entity that called him. He learned that the text message was a solicitation for National Tax Experts, Inc. (“NTE”).

         NTE, however, did not send the text message itself. Instead, it hired a company called Airtime Media LLC to promote NTE's tax relief services and generate inbound customer calls. Airtime Media, in turn, hired Revenue Frontier as a lead generator for the NTE campaign. Revenue Frontier then engaged W4, LLC to promote NTE's services on behalf of Revenue Frontier. W4 is an affiliate network that has agreements with independent contractors known as “affiliates” or “publishers” who use various methods to promote products and services and to encourage customers to visit websites or call telephone numbers to purchase products or services. In this case, W4 arranged for its affiliate, U.E.G. Inc., to promote NTE's services via text messages.[1] U.E.G. then hired Supreme Data Connections, LLC (“Supreme Data”) to send text messages for the NTE campaign. Defendant Adomanis is Supreme Data's manager and registered agent.

         During the discovery process, Supreme Data produced a list of text messages it sent for the NTE campaign. Clough's expert witness Anya Verkhovskaya analyzed the list and concluded that 18, 937 wireless numbers received 18, 971 texts messages. See Pl.'s Ex. 13. ¶ 44, Doc. No. 91-14. Another expert witness, Randall Snyder, has opined that the platform utilized to send the texts (the SDC Messaging Application employing the Sendroid software) qualifies as an automatic telephone dialing system (“ATDS”). See Pl.'s Ex. 15 ¶ 61, Doc. No. 91-16.

         Clough alleges that he did not consent to the receipt of any text message promoting tax debt relief services. The defendants have yet to produce any evidence that calls Clough's allegation into question. Nor have the defendants identified any evidence that the other recipients of the 18, 971 text messages consented to receive them.


         Federal Rule of Civil Procedure 23 sets out the requirements for class certification. The proposed class representative must demonstrate that each of the rule's requirements has been satisfied. Makuc v. Am. Honda Motor Co., 835 F.2d 389, 394 (1st Cir. 1987). The class certification inquiry has three steps. First, the class representative must show that the proposed class satisfies all four of Rule 23(a)'s threshold requirements, which are commonly known as numerosity, commonality, typicality, and adequacy. See Fed.R.Civ.P. 23(a)(1)-(4); see also Berenson v. Nat'l Fin. Servs. LLC, 485 F.3d 35, 38 (1st Cir. 2007). Second, the class representative must demonstrate that the lawsuit may be maintained as a class action under one of the three subsections of Rule 23(b), which allow class actions where: (1) separate actions by or against individual class members would risk imposing inconsistent obligations on the party opposing the class; (2) “the party opposing the class has acted or refused to act on grounds that apply generally to the class” and injunctive relief is suitable; or (3) common questions of law or fact predominate and a class action would be the superior method of proceeding. Fed.R.Civ.P. 23(b). Third, the representative must show that “a putative class [is] ascertainable with reference to objective criteria.” In re Nexium Antitrust Litig., 777 F.3d 9, 19 (1st Cir. 2015) (quoting William B. Rubenstein, Newberg on Class Actions §§ 3:1, 3:3 (5th ed. 2013)).

         Although a court should not decide the merits of a case at the certification stage, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974), a motion to certify “generally involves considerations that are ‘enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'” Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978) (quoting Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555, 558 (1963)). The First Circuit has held that “[a] district court must conduct a rigorous analysis of the prerequisites established by Rule 23 before certifying a class.” Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32, 38 (1st Cir. 2003). In doing so, a court may resolve disputed factual issues that arise in the course of class certification by considering materials beyond the pleadings. In re PolyMedica Corp. Sec. Litig., 432 F.3d 1, 6 (1st Cir. 2005).

         III. ANALYSIS

         Clough proposes to certify the following class:

(1) All persons in the United States who are the users or subscribers of the approximately 18, 937 cellular telephones identified in Anya Verkovshkaya's report (2) to which cellular telephone numbers a text message was sent [(3)] using the SDC Messaging Application, employing the Sendroid software [(4)] within four years of the filing of the complaint.

Doc. No. 91 at 1. He asserts that the proposed class satisfies all of the Rule 23(a) prerequisites and is eligible for certification under Rule 23(b)(3). The defendants object to class certification on the grounds that (1) Clough and other proposed class members lack standing to sue; and (2) the proposed class does not satisfy several of Rule 23's requirements. I address the defendants' standing argument first because a court lacks subject matter jurisdiction unless the plaintiffs have Article III standing. See Pollard v. Law Office of Mandy L. Spaulding, 766 F.3d 98, 101 (1st Cir. 2014).

         A. Article III Standing

         The defendants argue that Clough and other members of the proposed class lack standing to sue because they did not suffer a concrete injury. The defendants are wrong.

         Standing “limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong, ” and “requires a concrete injury even in the context of a statutory violation.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547, 1549 (2016). “When one sues under a statute alleging the very injury the statute is intended to prevent, and the injury has a close relationship to a harm traditionally providing a basis for a lawsuit in English or American courts, a concrete injury has been pleaded.” S ...

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