In a decision released last week, the District Court for the Northern District of Illinois denied a plaintiff’s motion for an order altering the court’s order dismissing the second amended complaint without prejudice and granting it leave to file an amended complaint. In Telephone Science Corporation v. Asset Recovery Solutions, LLC, the court previously granted defendant Asset Recovery Solutions, LLC’s (“ARS”) Rule 12(b)(6) motion to dismiss the second amended complaint of plaintiff Telephone Science Corporation (“TSC”), with prejudice, for failure to satisfy the “zone-of-interests” test under the Telephone Consumer Protection Act (“TCPA”) (previously discussed here).
TSC operates a service called “Nomorobo,” designed to block certain unwanted calls. TSC uses a “honeypot” of telephone numbers, analyzes calls made to those numbers to identify numbers that TSC’s service identifies as being made using an autodialer or artificial or prerecorded voice calls, and then blocks calls made to Nomorobo subscribers made using those identified numbers. TSC alleged that ARS placed over 12,000 calls to TSC’s “honeypot” numbers, for which TSC was charged as incoming calls. In its original ruling on the motion to dismiss, the court held that the claim fell outside the TCPA’s “zone of interest.” Since TSC did not suffer any injury of invasion of privacy or nuisance, and the supposed harm suffered by TSC did not impact interstate commerce, the court concluded that the damages were not of the nature that Congress intended to redress, but rather “indirect, economic and inherent to its business,” and, accordingly, dismissed the complaint.
After the court’s dismissal with prejudice, TSC moved to alter the judgment under Rule 59(e) and offered supplemental allegations by way of a proposed third amended complaint, including the allegation that once TSC has identified a telephone number as one that is placing robocalls to numbers in the TSC “honeypot,” TSC no longer needs to gather data from continued calls by that number. Instead, continued calls from these numbers “are unwanted and a nuisance, as they prevent the TSC telephone numbers from becoming ‘cleansed.’” In response to the motion, the court reaffirmed that TSC lacked standing to bring the claim under the TCPA. TSC’s supplemental allegations did not change the court’s prior recognition that the “only reason for this volume of calls . . . is due to the nature of TSC’s business, which is providing telecommunications services rather than consuming them.” The court ruled that TSC’s “nuisance” theory, that ARS robocalls became a nuisance after they no longer provided fresh data to optimize the Nomorobo service, “does not alter the reality that TSC used the TSC numbers as a telecommunications service provider, rather than a ‘consumer.’”
This decision follows two similar holdings, one by the Western District of Pennsylvania in Stoops v. Wells Fargo Bank, N.A. and the other by the Central District of California in Phillip Nghiem v. Dick’s Sporting Goods, Inc. (previously discussed here and here), dismissing claims from plaintiffs who invited the communications at issue as outside the “zone of interest” that Congress intended to be protected by the TCPA and thus failing to satisfy the requirements for standing.