Sending faxes to M.S. Wholesale Plumbing Inc. of Russeville can be a multimillion-dollar mistake.
Pope County Circuit Court Judge Dennis Sutterfield has ordered a Colorado company to pay $21.13 million to members in a class-action lawsuit brought by M.S. Wholesale in 2015.
It is the second big judgment the pipe supply company has received for class members since 2017 in lawsuits involving faxes that allegedly violated the Telephone Consumer Protection Act.
Westfax Inc. of Centennial, Colorado, has appealed Sutterfield’s ruling to the Arkansas Court of Appeals.
M.S. Wholesale’s attorneys are James Streett of the Streett Law Firm in Russellville and Joe P. Leniski Jr. of Branstetter Stranch & Jennings of Nashville, Tennessee.
M.S. Wholesale filed the class-action lawsuit against Western Financial LLC of Orange, California, and Westfax. Western Financial created the fax that offered financing and then hired Westfax to distribute it. M.S. Wholesale received the unsolicited fax on Sept. 15, 2015. Although the fax had a phone number to call to be “permanently removed from the list,” the suit complained that it didn’t contain the specific opt-out notice that is required under the TCPA.
Usually, the fax broadcaster, such as Westfax, isn’t found responsible for the faxes sent on behalf of customers. But in this case, Leniski told Whispers, Westfax was “substantially involved in creating the faxes that went out. And under those circumstances the law says you’re just as liable as the company who wanted the fax sent in the first place.”
Western Financial was dismissed from the case in late 2017, because it couldn’t “withstand even a modest class-wide judgment sufficient to afford any meaningful relief to the Class,” according to a filing from the plaintiffs. That left Westfax as the lone defendant.
Before the case went to trial, Sutterfield ruled on a motion for summary judgment in favor of the class members.
Sutterfield found that 42,270 faxes were sent out. The TCPA statute calls for a $500 penalty per violation, so that totaled $21.13 million.
Westfax is represented by Baxter Drennon and Michael Thompson at Wright Lindsey Jennings in Little Rock. Westfax has asked that Sutterfield’s ruling be overturned and the case sent back for a Pope County jury to decide.
U.S. Chamber Responds
As expected, the U.S. Chamber Institute for Legal Reform isn’t happy with the trend of the TCPA lawsuits.
The large judgments have “become a cash cow for the plaintiffs’ bar,” said Matthew Webb, senior vice president for legal reform policy at the institute, which is an affiliate of the U.S. Chamber of Commerce.
He said the TCPA statute is in desperate need of modernization. The TCPA statute, enacted by Congress in 1991, was an attempt to address the problem of unwanted faxes or calls.
“It’s a different world now,” Webb said.
Scammers need to be held accountable, he said, but “the problem is that’s not who the plaintiffs’ bar goes after.”
Leniski, the plaintiff’s attorney, said no one likes getting the robocalls or junk faxes. “I want them to stop,” he said. “Until there’s a better enforcement mechanism out there, [the TCPA] is the only thing out there that’s going to stem that tide of this predatory advertising … that forces you to use your fax paper, your cellphone minutes.”
Eugene Kalsky, owner of Gen-Kal Pipe & Steel Corp. of Mount Laurel, New Jersey, was the target of M.S. Wholesale’s first multimillion-dollar fax case. He has asked the Arkansas Supreme Court to review the $12.5 million class-action judgment against him and his company.
The Arkansas Court of Appeals recently upheld the judgment by another Pope County Circuit judge, Ken Coker Jr.
If you recall, Kalsky had sent M.S. Wholesale one fax solicitation that didn’t include a specific opt-out notice required by the TCPA. M.S. Wholesale sued and quickly received class certification.
Streett and Leniski represented M.S. Wholesale in that case. Kalsky didn’t hire a lawyer until after the judgment.
In his appellate filings, Kalsky’s attorney, Tim Cullen of Little Rock, said the plaintiff sought to use the judgment to force the sale of Kalsky’s home, “leaving him homeless and completely broke.”
Cullen called the judgment absurd. But Leniski said last month that the Court of Appeals “found in all respects that the trial court got it absolutely right. … We’re very happy with this outcome and don’t believe the [state] Supreme Court would venture to review it at this point.”