CHICAGO — Applying a new standard set by the U.S. Supreme Court, a Chicago federal judge has ruled that a junk fax suit against Cirque du Soleil can continue, but limited the class action claims only to Illinois residents.

On March 12, U.S. District Judge Thomas M. Durkin nixed national class-action claims when he dismissed the claims of non-Illinois residents and limited class certification to include only Illinois residents who received the faxes. The judge relied on the Supreme Court's recent decision in Bristol-Myers Squibb v. Superior Court of California, San Francisco County, in which the court more stringently tailored specific jurisdiction standards for such claims from those outside a court's normal jurisdiction.

David Klein
David Klein | Klein Moynihan Turco

Durkin held the Supreme Court’s ruling prevents the court “from exercising personal jurisdiction over defendants with respect to the claims of non-Illinois-resident class members.”

The Illinois ruling stems from a lawsuit brought by Practice Management Support Services Inc. The company accused Cirque du Soleil of violating the federal Telephone Consumer Protection Act (TCPA) in 2009 when it allegedly sent unauthorized faxes advertising a vaudeville-themed theatrical show without providing clear instructions on how to opt out. The lawsuit came after two suits brought by GM Sign Inc. involving the same faxes were dismissed.

In August, Cirque du Soleil asked for summary judgment, claiming Practice Management’s suit came too late. But Durkin denied the request in November, saying the previous lawsuits tolled the statute of limitations. Tolling allows for delaying or pausing the time set by a statute of limitations. This means that a lawsuit may potentially be filed even after the statute of limitations has run out.

In December, Practice Management moved for class certification, claiming Cirque du Soleil sent more than 40,000 faxes from Jan. 20, 2009, to July 8, 2009. But Cirque du Soleil argued the Supreme Court’s recent decision in Bristol-Myers Squibb “prevents this court from asserting personal jurisdiction over the defendants with respect to the claims of putative class members located outside of Illinois.” The court agreed with the defendants.

The court went on to define the class as “all persons who are residents of Illinois and all entities located in Illinois who were successfully sent a facsimile in Illinois.”

The order stayed the case pending the outcome of another case currently pending before the Supreme Court, but it noted the plaintiff has leave to file its motion for reconsideration. Attorneys for Practice Management also informed the court they will be filing a motion for reconsideration or a Rule 23(f) appeal with the Seventh Circuit Court of Appeals solely regarding the portion of the ruling that limits the class to Illinois residents. 

Glenn L. Hara, an attorney representing Practice Management, and Yesha Sutaria Hoeppner, an attorney representing Cirque du Soleil, declined to comment.

David O. Klein, an attorney at Klein Moynihan Turco LLP who practices telemarketing law and online marketing law in New York City, said the Cirque du Soleil case could be a good tool for law firms that defend TCPA class actions.

“It’s a great ruling from the perspective of the defendants that are defending TCPA class actions,” Klein told the Cook County Record.

In deciding to limit the class to only Illinois residents, the court ruled specific jurisdiction existed with respect to the faxes that were sent to residents in Illinois.

“In other words, those that they wanted to certify in the class nationally would not be eligible to be included in this class,” Klein said. “They would need to bring an action in other jurisdictions where those residents reside in order for specific jurisdiction to attach.”

In applying the Bristol Myers-Squibb standard, he explained that you need to have either general or specific jurisdiction over a defendant for the case to proceed. While general jurisdiction didn’t apply in the Cirque du Soleil case, specific jurisdiction did apply with respect to residents who received faxes in Illinois.

“They also held that the Bristol Myers-Squibb decision and its reasoning applied in a class-action realm,” Klein said.

Klein said he would advise clients to obtain consumers’ prior express written consent before sending them text messages, phone calls or faxes through automated means. But if they end up on the receiving end of a TCPA class-action suit, he said he would raise the Cirque du Soleil case and Bristol Myers-Squibb case in all class certification proceedings to limit the size of the class.

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