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).
In a ruling issued on December 1, 2016, the District Court for the Central District of California denied class certification in a Telephone Consumer Protection Act (“TCPA”) case due to the putative class representatives’ status as a so-called professional plaintiff. This ruling continues a trend in which courts have significantly limited the ability of professional plaintiffs to bring TCPA class actions. Courts increasingly view professional plaintiffs’ conduct in inviting the complained-of communications as a basis to challenge these plaintiffs’ standing and rendering them inadequate class representatives.
The Second Circuit recently refused to allow a plaintiff to proceed with a putative class action brought under the Telephone Consumer Protection Act (“TCPA”) in Bank v. Alliance Health Networks, LLC, finding that he lacked standing after the District Court entered judgment for Defendant in the amount of an unaccepted offer of judgment on Plaintiff’s individual claims.
The Southern District of California recently dismissed two Telephone Consumer Protection Act (“TCPA”) 47 U.S.C. § 227 actions for a failure to allege any concrete injury traceable to defendants. In both actions, the court found that plaintiffs had not alleged any concrete harm traceable to defendants’ alleged violation of the TCPA. Due to this, the court held that plaintiffs lacked standing under Spokeo v. Robins, 136 S.Ct. 1540 (2016) (previously discussed here), in which the U.S. Supreme Court held that “a bare procedural violation, divorced from any concrete harm [does not] satisfy the injury-in-fact requirement of Article III.”
In a precedential but split ruling, the Third Circuit recently held that diversity jurisdiction existed over a declaratory judgment action seeking insurance coverage for a classwide settlement of Telephone Consumer Protection Act (“TCPA”) claims even though no individual member of the underlying class had a claim in excess of the required $75,000 amount in controversy. See Auto-Owners Insurance Company v. Stevens & Ricci Inc., No. 15-2080, — F.3d — (3rd. Cir. 2016). The court also affirmed that the TCPA class settlement did not constitute covered “property damage” or “advertising injury” under the terms of the subject insurance policy.
The case arose when an insurance company sought a declaratory judgment that it had no obligation to defend or indemnify an insured law firm in connection with a class action lawsuit alleging TCPA violations. The named plaintiff in the underlying the class action lawsuit had alleged that the law firm violated the TCPA by sending unsolicited fax advertisements. The insurance company sought a declaratory judgment in the Eastern District of Pennsylvania against both the law firm and the named plaintiff in the underlying class action. At summary judgment, the district court concluded that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the applicable insurance policy.
At least two courts have recently dismissed TPCA claims where the plaintiffs appeared to manufacture standing. In Telephone Science Corp. v. Asset Recovery Solutions, the Northern District of Illinois dismissed a TCPA complaint brought by a plaintiff whose business model involved the intentional receipt of autodialed or prerecorded calls. There, the plaintiff, Telephone Science Corp. (“TSC”), operated 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.
A federal court in California recently dismissed a class action accusing mobile application company Life360, Inc. (“Life360”) of violating the TCPA on the grounds that the company could not be liable for texts initiated by app users. The Court found that Life360 was not the “sender” of the texts initiated using its platform and, therefore, could not be held liable under the TCPA, because users—not the application itself—selected when and to whom the texts were sent.
Life360 operates a mobile phone application that allows users to communicate with and see the location of their friends and family. Users of the app who provide Life360 with access to their phone’s contact list can direct the app to “Invite” certain contacts to use the app and share their location and exchange messages with the user. According to the complaint, the user is not instructed on how or when invitations will be sent. Plaintiff Terry Cour alleged that Life360 sent him unwanted texts even though he was not a Life360 user and had never downloaded the app onto any device. Following the receipt of text messages from the app, Cour filed a lawsuit on behalf of himself and a class of persons similarly situated, alleging that Life360’s texts violated the TCPA.
On Monday, the United States Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins, — U.S. — (No. 13-1339). In rendering its decision, the Court reiterated that to establish Article III standing, a plaintiff must plead an injury-in-fact that is both particular to the plaintiff and concrete. The Court explained that whether a plaintiff has pleaded sufficient facts to allege a concrete injury requires more than just examining whether the plaintiff has pleaded that the defendant violated a federal statute. In particular, the Court held that “a bare procedural violation, divorced from any concrete harm,” does not suffice to “satisfy the injury-in-fact requirement of Article III.” As such, the Spokeo plaintiff’s allegation that the defendant’s actions had violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq., would not, by itself, demonstrate a plausible injury-in-fact. Rather, “Article III standing requires a concrete injury even in the context of a statutory violation.”
A recent decision by a New York federal court serves as a stark reminder of the need for companies to adopt and follow robust “do not call” procedures in order to minimize the risk of rapidly escalating statutory damages under the Telephone Consumer Protection Act. The case appears to be the first to rely on the Federal Communications Commission’s recently-announced but at the time, unreleased TCPA declaratory rulings (previously discussed here). (The order has just been released, but as of this writing, the link was down.)