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George v. Shamrock Saloon II LLC

United States District Court, S.D. New York

January 13, 2020

MEGHAN GEORGE, on behalf of herself and all others similarly situated, Plaintiff,
SHAMROCK SALOON II LLC, doing business as CALICO JACK'S CANTINA; BLITZ MARKETING, LLC; JOHN L. SULLIVAN; and DOES 1 THROUGH 20 inclusive, and each of them, Defendants.



         Plaintiff, on behalf of herself and others similarly situated, brings this action against Defendants Shamrock Saloon II LLC, doing business as Calico Jack's Cantina ("Calico Jack's"), Blitz Marketing, LLC, John. L. Sullivan, and Does 1 through 20. She alleges that Defendants violated the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq., by sending dozens of text messages advertising events and specials at Calico Jack's to her cell phone number without her consent using an automated telephone dialing system ("ATDS"). Plaintiff moved for an order certifying a class pursuant to Federal Rule of Civil Procedure 23.

         Before the Court is Magistrate Judge Pitman's Report and Recommendation ("Report"), dated August 7, 2019, recommending that the Court grant Plaintiffs motion. Specifically, the Report recommends that the Court certify a class "consisting of the 67, 630 individuals (1) to whom defendants sent promotional text messages between March 26, 2015 and September 1, 2017 using an automated dialing system and (2) from whom defendants cannot affirmatively show that they received prior express written consent to receive such text messages." Rpt. at 10.[1]

         On August 21, Defendants filed their objections to the Report. Plaintiff responded on September 25. The Court assumes the parties' familiarity with the facts, as outlined in the Report. After reviewing the Report and objections, the Court adopts Judge Pitman's well-reasoned recommendation in its entirety and grants Plaintiffs motion to certify the class.


         When a magistrate judge issues a report and recommendation, the district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made [therein]." 28 U.S.C. § 636(b)(1)(C). "When a timely and specific objection to a report and recommendation is made, the Court reviews de novo the portion of the report and recommendation to which the party objects." Tagliaferri v. United States, No. 17-CV-3026 (RA), 2019 WL 498361, at *1 (S.D.N.Y. Feb. 8, 2019); see also Time Square Food Imps. LLC v. Philbin, No. 12-CV-9101 (PAE), 2014 WL 521242, at *2 (S.D.N.Y. Feb. 10, 2014) (requiring objections to be "specific and clearly aimed at particular findings in the magistrate judge's report"). Portions of a report not subject to a proper objection are reviewed for clear error. See Razzoli v. Fed. Bureau of Prisons, No. 12-CV-3774 (LAP), 2014 WL 2440771, at *5 (S.D.N.Y. May 30, 2014). "[T]o the extent.. . that the party makes only conclusory or general arguments, or simply reiterates the original arguments, the Court will review the [report and recommendation] strictly for clear error." IndyMac Bank, F.S.B. v. Nat'l Settlement Agency, Inc., No. 07-CV-6865 (LTS), 2008 WL 4810043, at *1 (S.D.N.Y. Nov. 3, 2008).

         Before granting a class certification motion - as is the subject of Judge Pitman's Report -"a court must ensure that the requirements of Rule 23(a) and (b) have been met." Denney v. Deutsche Bank AG, 443 F.3d 253, 270 (2d Cir. 2006). Rule 23(a) has four prerequisites: numerosity, commonality, typicality, and adequacy of representation. See Fed. R. Civ. P. 23(a). "[A]ctual, not presumed, conformance with Rule 23(a) remains ... indispensable." General Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982). "If the Rule 23(a) criteria are satisfied, an action may be maintained as a class action only if it also qualifies under at least one of the categories provided in Rule 23(b)." Levitt v. J.P. Morgan Sec, Inc., 710 F.3d 454, 464 (2d Cir. 2013). As relevant here, Rule 23(b)(3) provides "two additional requirements": "predominance, i.e., law or fact questions common to the class predominate over questions affecting individual members, and superiority, i.e., class action is superior to other methods." In re Pub. Offerings Sec. Litig., 471 F.3d 24, 32 (2d Cir. 2006). The party seeking certification must prove these requirements by a preponderance of the evidence. See Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008).


         Defendants timely raised three objections to the Report. Two of the objections are new arguments against class certification that were not presented to Judge Pitman. The third objection reiterates an argument mat Defendants made in their underlying brief opposing class certification and was addressed by Judge Pitman. For reasons explained below, the Court does not consider Defendants' first two objections, reviews the third objection for clear error, and evaluates the remainder of Judge Pitman's Rule 23 findings, to which Defendants did not object, also for clear error.

         I. Defendants' Objections to the Report

         A. Two Newly Raised Arguments Against Class Certification

         "[W]hether a party may raise a new legal argument... for the first time in objections to [a magistrate judge's report and recommendation] has not yet been decided in this Circuit." Levy v. Young Adult Inst., Inc., 103 F.Supp.3d 426, 433 (S.D.N.Y. 2015). As such, courts in this circuit address this issue in one of two ways. Some courts hold that "new arguments and factual assertions cannot properly be raised for the first time in objections to the R&R, and indeed may not be deemed objections at all." Tarafa v. Arms, No. 10-CV-3870 (AJN), 2013 WL 3789089, at *2 (S.D.N.Y. July 18, 2013); see also Cabrera v. Schafer, No. 12-CV-6323, 2017 WL 1162183, at *2 (E.D.N.Y. Mar. 27, 2017). The reasoning is that reviewing arguments for the first time at this late stage "would negate efficiencies gained through the Magistrates Act and would permit litigants to change tactics after the issuance of an R&R." Amadasu v. Ngati, No. 05-CV-2585 (RRM), 2012 WL 3930386, at *5 (E.D.N.Y. Sept. 9, 2012). Other courts consider six factors in determining whether to exercise their discretion and address a newly-raised argument:

(1) the reason for the litigant's previous failure to raise the new legal argument; (2) whether an intervening case or statute has changed the state of the law; (3) whether the new issue is a pure issue of law for which no additional fact-finding is required; (4) whether the resolution of the new legal issue is not open to serious question; (5) whether efficiency and fairness militate in favor or against consideration of the new argument; and (6) whether manifest injustice will result if the new argument is not considered.

Parks v. Comm'r of Soc. Sec., No. 15-CV-6470 (ER), 2017 WL 3016946, at *3 (S.D.N.Y. July 17, 2017).

         In their objections to the Report, Defendants challenge Plaintiffs expert's findings for the first time. With full access to Defendants' Call Fire account (through which Defendants store collected phone numbers and draft and schedule mass text message promotional campaigns), the expert found that 67, 630 unique cell phone numbers received text messages between March 26, 2015 and September 1, 2017 from Defendants without consent provided "in the handwritten sheets completed by customers at the restaurant... [or] on the website content list." Expert Rpt. Iflf 55. Furthermore, before Judge Pitman, "both sides appear[ed] to agree that [Defendants' text messages contained 'advertisements' as defined by the FCC." Rpt. at 7 n.l. 67, 630 was thus proposed - and adopted - as the scope of the class.

         Now, however, Defendants claim that they never agreed that all 67, 630 individuals received messages with an advertisement. Instead, "absolutely ... not conced[ing] that every single text that was sent using the Call Fire platform ... qualify as 'advertisements' under the TCPA," they assert that only those individuals on their General Mailing List - a number about half the size of the proposed class - received text messages with an advertisement. Defs.' Obj. at 16. Defendants, therefore, contend that the Report erred in "conclud[ing] that there were 67, 630 individuals who received the text message promotions sent to Plaintiff between March 26, 2015 and September 1, 2017." Id.; see also Id. at 8 ("[T]he discrepancy between the actual number of individuals who were on the General Mailing List and the number asserted by Hansen was," according to Defendants, "due to Hansen's inclusion in all contact numbers - on any list - within the Call Fire database.").

         Yet, despite the fact that the expert report was available to Defendants prior to and during initial briefing, Defendants never before questioned the expert's findings or whether the text messages included an advertisement. Nor did Defendants' 30(b)(6) witness, in her deposition, ever address this alleged distinction between individuals on the General Mailing List and other lists. Notably, Plaintiffs reply brief to Defendants' underlying opposition brief even noted that "Defendants do not contest the numbers." Pl.'s Obj. Reply at 3. It is, therefore, unclear to the Court why Defendants did not previously raise this if the "distinction is [as] important" as they now assert. Defs.' Obj. at 6. This is particularly so given that Defendants agreed to give Plaintiffs expert full access to their Call Fire account and stipulated to the authenticity of that information in order to avoid a second 30(b)(6) deposition. See Dkt. 56 (Stipulation & Order Regarding the Authenticity of Defendants' Call Fire Records).[2]

         Defendants' second new argument is that they do not need to prove "prior express written consent" with documentary evidence because witness testimony is sufficient. Defendants primarily cite Pamela Killian's 30(b)(6) deposition, in which she testified that Defendants obtained customers' cell phone numbers via only two methods: sign-up sheets circulated in the bar and their website. Relying on a single case from the Western District of Ohio, Defendants now claim this testimony is sufficient to establish consent. See Defs.' Obj. at 21-22 (citing Sawyer v. KRS Biotechnology Inc., No. 16-CV-550, 2018 WL 2425780 (W.D. Ohio May 30, 2018)). Defendants, however, did not previously argue that relying solely on witness testimony was adequate proof, perhaps because Ms. Killian testified that she had never personally used Call Fire and thus offered little insight into Defendants' messaging.[3] See Killian Dep. 34:14-17.

         Ultimately, the Court takes no position on whether a new argument first raised in objections to a magistrate judge's report and recommendation can ever be considered. Here, even applying the six-factor test used by some courts, Defendants' two new arguments against class certification do not warrant review. Defendants could have raised each of these arguments in their underlying briefing. They have not explained why they did not so. Notably, neither argument relies on intervening law or evidence. Moreover, Defendants' argument regarding the expert report would require additional fact-finding about the text messages sent by Call Fire during the proposed class period. Because the parties have engaged in discovery after which Judge Pitman issued a detailed Report, neither "efficiency [nor] fairness militate in favor ... [of] consideration of the new argument." Parks, 2017 WL 3016946, at *3. To consider either now "would negate efficiencies gained through the Magistrates Act and ... permit [Defendants] to change tactics after the issuance of [the] R&R." Amadasu, 2012 WL 3930386, at *5 (citation omitted).

         Accordingly, these arguments "may not be deemed objections at all." 3 W. 16th St., LLC v. Commonwealth Land Title Ins. Co., No. 18-CV-1914 (AT), 2019 WL ...

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