FYI: MA SJC Holds Attorney for Deceased Named Putative Class Plaintiff Could Not Act for Putative Class

The Massachusetts Supreme Judicial Court (SJC), the state's highest court, recently held that:

 

(1) The attorney for a named putative class plaintiff who is deceased does not have authority to act on behalf of the deceased plaintiff absent a motion by the deceased's legal representative; and

 

(2) In limited circumstances, trial courts may sua sponte order notice to putative class members prior to certification only when absent notice the putative class members would face significant prejudice.

 

A copy of the opinion is available at:  Link to Opinion

 

This matter involved a five-count complaint asserting both individual and putative class allegations.

 

Prior to the plaintiff's counsel filing for class certification, the plaintiff died. Plaintiff's counsel then filed a motion to (1) order notice to putative class members informing the members of plaintiff's death and inviting them to join the action; (2) order the defendant to identify the names and addresses of putative class members; and (3) extend case deadlines to allow for a substituted class representative and completion of discovery.

 

Defendant opposed the motion on the basis that Plaintiff's counsel had no authority to act on behalf of Plaintiff or any other putative class member.  Nevertheless, the motion was granted and Defendant filed a petition for interlocutory relief.

 

Under Massachusetts law, class actions are governed by Mass. R. Civ. P. 23. As this rule was written in light of Fed. R. Civ. P. 23, the SJC noted that case law construing the Federal rule was analogous. Chambers v. RDI Logistics, Inc., 476 Mass. 95, 111 (2016).

 

The Court first addressed "[w]hether a deceased plaintiff's attorney ha[d] the authority to act on the deceased plaintiff's behalf prior to class certification, and before any motion to certify a class had been filed, and without motion by the plaintiff's legal representative to substitute as a party to the putative class action."

 

The SJC held that Plaintiff's counsel lacked authority to act on behalf of deceased Plaintiff or the putative class. An attorney's authority to act on behalf of a client is terminated on that client's death. Kelley v. Neilson, 433 Mass. 706, 710 n.8 (2001) (attorney's authority to act on behalf of client "expired on her death"). Therefore, the SJC found that the attorney of a deceased plaintiff, absent a motion by the deceased's legal representative, may not act on behalf of the deceased. See Federal Ins. Co. v. Ronan, 407 Mass. 921, 923 n.6 (1990), quoting Turner v. Minasian, 358 Mass. 425, 427 (1970) ("On the death of the client there is no legal representative before the court and counsel's authority was automatically terminated by his death…. No effective action can be taken until a legal representative is made a party" [alterations omitted]).

 

The SJC noted that, although "counsel for a class has a continuing obligation to each class member," Spence v. Reeder, 382 Mass. 398, 409 (1981), counsel's authority to act on behalf of a certified class is not necessarily terminated on the death of the named plaintiff. See Id., Bartle v. Berry, 80 Mass. Pp. Ct. 372, 386 (2011), quoting Parker v. Anderson, 667 F.2d 1204, 1211 (5th Cir. 1982). However, as the putative class in the instant matter was not yet certified, the Court held that any relationship between the putative class and Plaintiff's counsel would be too attenuated to vest in counsel an obligation to act on behalf of the class.

 

The SJC also held that Plaintiff's counsel was not in the position to act on behalf of anyone whose interests had been implicated in the putative class action as Plaintiff's counsel:  (1) had not moved for class certification, (2) had failed to located Plaintiff's personal representative; and (3) had failed to identify other potential members of the putative class that could serve as the class representative.

 

Finally, the SJC noted that while attorneys sometimes act as officers of the court, see, e.g., ABA Formal Op. 95-397 (Sept. 18, 1995), allowing Plaintiff's counsel to act as an officer of the court in this instance would be to allow counsel to utilize the courts as an "instrument of client solicitation."

 

The SJC next turned to the question of whether the trial court had "the power to order, sua sponte, notice to the putative class members under Mass. R. Civ. P. 23(d)." The SJC held that the trial judge had the power to order notice if the putative class members would otherwise face significant prejudice.

 

The Court first examined the plain language of Mass. R. Civ. P. 23 (d) which the SJC found vested the trial court with discretionary power to order notice during class actions. The Court further noted this reading was supported by federal case law.

 

The SJC also found that the discretion given under rule 23 (d) could be exercised sua sponte as Mass. R. Civ. P. 23(d) does not refer to any necessary request for relief. Cf. Mass. R. Civ. P. 15(d), 365 Mass. 761 (1974).

 

Finally, the SJC held that this discretion could be exercised prior to class certification, if there is a finding of significant prejudice. See Marian Bank v. Electronic Payment Servs., Inc., U.S. Dist Ct., No SLR (D. Del. Mar. 12, 1999).

 

The Court relied on its duty to "fairly and adequately protect the interests of the class in whose behalf the action [was] brought or defended." Thus, the SJC concluded that ordering notice under Mass. R. Civ. P. 23 (d) prior to class certification is a clear abuse of discretion if the court has not found that putative class members would face significant prejudice absent such notice.

 

Accordingly, the SJC reversed the lower court's order, and remanded the case for further proceedings consistent with its opinion.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: Ill App Ct (1st Dist) Holds Failure to Timely Perfect Stay of Enforcement Doomed Borrowers' Foreclosure Appeal

The Appellate Court of Illinois, First District, recently held that the borrowers' appeal in a mortgage foreclosure action was moot for failure to timely perfect a stay of enforcement of the final judgment.

 

A copy of the opinion is available at:  Link to Opinion

 

The opinion arises from numerous appeals filed in a mortgage foreclosure action. A mortgagee ("Mortgagee") instituted foreclosure proceedings against a husband and wife ("Borrowers"), who both contested the foreclosure.

 

During the course of the litigation, numerous motions were filed and orders entered. Borrowers filed one notice of appeal in relation to certain orders and Mortgagee filed two notices of appeal. The Appellate Court consolidated the appeals.

 

The Appellate Court first considered its jurisdiction over each of the appeals. The first appeal was filed by Borrowers on October 11, 2019, from the judgment of foreclosure, order confirming sale, and order denying the motion to vacate. The Court found it had jurisdiction over this appeal under Illinois Supreme Court Rules 301 and 303(a) because the order approving sale constituted a final order that became appealable upon denial of Borrowers' timely post-judgment motion to vacate on September 13, 2019.

 

In so ruling, the Appellate Court held that the trial court's June 18, 2019 order approving the judicial sale was a final appealable order. EMC Mortgage Corp. v. Kemp, 2012 IL 113419, ¶ 11. Borrowers' July 17, 2019 motion to vacate the order approving sale was a post-judgment motion under section 2-1203(a) of the Illinois Code of Civil Procedure which tolled the time for filing a notice of appeal from the June 18, 2019 final order. See Ill. S. Ct. R. 303(a). Borrowers' post-judgment motion to vacate was denied on September 13, 2019, and possession temporarily stayed through October 13, 2019. Thus, the Court held the court's September 13 denial of the only timely post-judgment motion directed at the judgment made the June 18, 2019 order approving sale, final and appealable.

 

Borrowers filed their notice of appeal on October 10, 2019, within 30 days of the trial court's denial of the motion to vacate, and on October 11, 2019, filed a motion to reconsider the September 13 denial of the motion to vacate. The Court found the trial court lacked jurisdiction over Borrowers' motion to reconsider for two reasons: (1) the October 2019 notice of appeal divested the court of jurisdiction to modify the judgment (General Motors Corp. v. Pappas, 242 Ill. 2d.163, 174 (2011)); and (2) the October 11 motion to reconsider was a successive post-judgment motion which is not permitted by the Illinois Supreme Court's rules (Ill. S. Ct. R. 274 (eff. July 1, 2019).

 

However, the Appellate Court found that the October 10, 2019 notice of appeal did not divest the court of jurisdiction over matters "collateral to or incidental to the judgment." Pappas, 242 Ill.2d at 174. The Illinois Supreme Court previously held that a motion to stay enforcement of a judgment is "collateral to the judgment" and that it "does not affect or alter the issues on appeal, Id. citing Steinbrecher v. Steinbrecher, 197 Ill.2d 514, 526 (2001).  Thus, the Appellate Court held that the October 2019 notice of appeal did not deprive the trial court of jurisdiction to consider the request for stay of enforcement, which was granted on January 8, 2020.

 

Mortgagee argued that jurisdiction existed for both its notices of appeal.  However, the Appellate Court held that the trial court's January 8, 2020 and October 27, 2020 orders were not appealable judgments or orders, and it therefore lacked jurisdiction over Mortgagee's appeals.

 

First, the Court found no authority to suggest it had jurisdiction to review a trial court's order granting a post-judgment stay of enforcement of a judgment. The Appellate Court noted that an order granting a stay of enforcement is not a judgment, but instead affects the parties' ability to execute the judgment.  In addition, the Appellate Court found Rule 304 -- which governs final judgments that do not dispose of the entire proceeding -- was not applicable as the order staying enforcement was not one of the enumerated types of appealable orders without a special finding required by Rule 304(a). Ill S. Ct. R. 304(b).

 

The Appellate Court also rejected Mortgagee's additional arguments, holding that: (1) Rule 305 was inapplicable as it contains no provisions regarding appealability of a trial court's order staying enforcement of a judgment; (2) Rule 306 was inapplicable as it governs interlocutory appeals by permission which require a petition for initiation; and (3) Rule 308 was inapplicable as governing appeals from questions of law certified for review. As to Rule 307, the Court held it also did not apply as it has been held that it only applies to interlocutory orders entered prior to a final judgment. Gardner v. Mullins, 234 Ill.2d 503, 509-10 (2009).

 

Thus, the Appellate Court ruled that an order staying enforcement of a judgment is not an appealable final judgment under the Illinois Supreme Court rules, and the rules do not provide do not provide a mechanism for seeking review of such a post-judgment order.

 

The Appellate Court next considered the arguments as to whether Borrowers' appeal was moot. "An appeal is moot if it involves no actual controversy, or the reviewing court cannot grant the complaining party effectual relief." Deutsche Bank National Trust Co. as Trustee for Indymac Indx Mortgage Loan Trust 2006-AR25 v. Roman, 2019 IL App (1st) 171296, ¶ 21 (citing Steinbrecher, 197 Ill. 2d at 522-23). "It is well established that, in the absence of a stay, when the property that is the subject of an appeal is sold to a third party who is not a party to the litigation or a nominee for a party to the litigation, the appeal is moot." Id. (collecting cases).

 

The Appellate Court examined Rule 305(k) which protects the rights of a third-party purchaser. "Rule 305(k) applies if (1) the property passed pursuant to final judgment, (2) the right, title, and interest of the property passed to a party who is not a party to the action, and (3) the litigating party failed to perfect a stay of judgment within the time allowed for filing a notice of appeal." Deutsche Bank Nat'l Trust Co. v. Roman, 2019 IL App (1st) 171296, ¶ 23. Applying the Roman factors, the Court found the Borrowers' appeal was moot.

 

Borrowers argued that the third-party buyer made itself a party to the litigation when the trial court granted its petition to intervene prior to the judgment becoming final. The Appellate Court disagreed, relying on the reasoning in Steinbrecher and Roman. The Appellate Court noted that third-party buyer did not participate in the litigation prior to the order confirming judicial sale and it filed its petition while the post-judgment motion was in briefing. Thus, the Appellate Court found that it was a mere purchaser of the property whose only interest in the litigation was protecting its future possessory interest in the property.

 

The Appellate Court further held that Borrowers failed to perfect the stay of enforcement within the time for filing a notice of appeal.

 

Borrowers set forth numerous arguments as to why they timely perfected a stay of enforcement, all of which were rejected by the Appellate Court. As one argument, Borrowers asserted that the trial court properly used a nunc pro tunc order to find their December 2019 motion for extension to file a motion to stay enforcement was timely.  However, examining the language of the trial court's order, the Appellate Court could only conclude that the trial court believed it could use a nunc pro tunc order to give the motion for extension of time to file a motion to stay enforcement retroactive effect. However, the Appellate Court noted that the trial court could only properly use a nunc pro tunc order to correct an order that incorrectly reflected, by omission or clerical error, the court's prior ruling. In re Marriage of Breslow, 306 Ill. App. 3d 41, 53-54 (1999).

 

The Appellate Court found the trial court's use of a nunc pro tunc order was improper as there was nothing in the record to support the use of such an order to grant relief that was belatedly requested. The Appellate Court further found that the improper entry of the nunc pro tunc order did not cure Borrowers' failure to perfect a stay of enforcement within the time for filing a notice of appeal.

 

Thus, the Appellate Court dismissed Mortgagee's appeal for lack of jurisdiction and dismissed Borrowers' appeal as moot.

 

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: 8th Cir Holds Text Marketing System Was Not ATDS Under TCPA

Following the Supreme Court of the United States ruling in Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), the U.S. Court of Appeals for the Eighth Circuit recently affirmed the rulings of multiple trial courts to grant summary judgment in favor of the defendants, holding that an automated marketing system that sends promotional text messages to phone numbers randomly selected from a database of customers' information is not an automated telephone system (ATDS) under the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.

 

A copy of the opinion is available at:  Link to Opinion

 

The defendants, two bar establishments, used marketing software to send text messages to former and potential customers. The plaintiffs were persons who received promotional text messages from at least one of the establishments through the marketing software.

 

For context, the software was used to maintain a database that stored the contact information of the establishments' former and potential customers. The establishments' employees manually entered the contact information, including phone numbers, into the database. The software was not capable of randomly or sequentially generating phone numbers.

 

The plaintiffs argued in multiple lawsuits that these messages violated the TCPA because they were sent using an ATDS without their consent.

 

In each of the plaintiffs' cases, the trial courts granted summary judgment in favor of the defendants, holding that the software did not meet the statutory definition of an ATDS.  The plaintiffs brought a consolidated appeal before the Eighth Circuit.

 

The sole dispute on appeal was whether the software fell within the TCPA's definition of an ATDS.

 

As you may recall, the TCPA defines an ATDS "as equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." See 47 U.S.C. § 227(a)(1).

 

The parties disputed the meaning of the term "produce," as used in § 227(a)(1)(A), and whether it included the software's random selection of phone numbers from an existing list of contacts.

 

To answer this question, the Eighth Circuit looked at the ordinary meaning of the term "produce." When interpreting a statute, courts "begin by analyzing the statutory language, 'assum[ing] that the ordinary meaning of that language accurately expresses the legislative purpose.'" United States v. I.L., 614 F.3d 817, 820 (8th Cir. 2010).

 

Because a "random or sequential number generator" does the producing under the language of § 227(a)(1), and because the software did not "produce telephone numbers to be called," the Eighth Circuit held that the software did not fall under this definition.

 

The plaintiffs pointed to dictionary definitions and common uses of the term "produce" to suggest it includes "select" or "bring forth." However, the Eighth Circuit rejected this approach as isolated and contextless. See U.S. Nat'l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993). In the Court's view, while dictionary definitions and common uses of a word can be helpful, they will derail accurate interpretation if courts improperly determine that the meaning of a term used in a statute includes any existing definition or use of that term.

 

The Eighth Circuit cited to the recent Supreme Court of the United States ruling in Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), to bolster its analysis. In Facebook, the Supreme Court emphasized that § 227 "target[s] a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity." Id. at 1169–71. The Supreme Court reasoned, "[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel." Id.

 

Furthermore, the Supreme Court in Facebook addressed the question of how a system could "store" a phone number without first "producing" it. The Supreme Court explained that Congress may have used "store" to "clarify the domain of prohibited devices" rather than specify a distinct category of systems which store but do not produce phone numbers. Facebook, 141 S. Ct. at 1172 n.7. The Eighth Circuit rejected the plaintiffs' argument that the Supreme Court was suggesting that the term "produce" includes randomly selecting from a database of non-randomly collected phone numbers. This would have conflicted with the Supreme Court's overall conclusion that a system which merely stores and dials phone numbers is not an ATDS.

 

Accordingly, the Eighth Circuit concluded that the software was not an ATDS under the TCPA and affirmed the trial courts' grants of summary judgment in favor of the establishments.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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