Where’s the (TCPA) Harm in That?
TCPA Cases Post-Spokeo: Federal courts weigh plaintiffs’ alleged harms under the TCPA in light of Spokeo v. Robins, with some beginning to find injury-in-fact to sue for unwanted calls and texts – while one rules that “professional” TCPA plaintiffs do not suffer injury insofar as calls are not “unwanted”
Following the U.S. Supreme Court’s ruling in Spokeo v. Robins that plaintiffs must allege a concrete and particularized injury to meet Article III standing requirements, federal district courts across the country are beginning to dig through the dozens of Telephone Consumer Protection Act (TCPA) and other privacy cases that were stayed pending the decision in Spokeo. At least in the TCPA context, several recent rulings have found that TCPA violations cause both tangible and intangible harms to consumers that are sufficiently concrete under Spokeo.
At the same time, one court has held that a plaintiff does not suffer an injury – and thus lack standing – when she sets herself up to attempt to receive calls from creditors to support a fledging TCPA litigation “business.” Standing has become a major issue in TCPA and other privacy litigation in recent years because whether a plaintiff can clear this basic litigation hurdle can determine if the parties will face the specter of years of expensive litigation and/or possible settlement, both of which may cost the defending company millions or tens of millions of dollars.
Until Spokeo, reviewing courts often had found that a general claim of receiving unwanted phone calls in violation of the TCPA presented sufficient injury-in-fact to satisfy standing, even when a plaintiff did not identify any cognizable harm suffered from the alleged statutory violations. The Supreme Court’s acceptance of the Spokeo case presented the possibility that, given the ephemeral and fleeting harm that unwanted calls and texts arguably inflict, defenses to TCPA claims based on standing might prove viable.
A Wide Array of Concrete Harms under TCPA
In one of the first TCPA actions “unstayed” in the wake of Spokeo, a West Virginia federal district court found that the Supreme Court’s ruling “broke no new ground” in regards to standing, and that the receipt of “unwanted calls” prohibited by the TCPA causes the types of tangible and intangible harms to consumers that continue to satisfy standing under Spokeo. The court noted a couple of prior cases that had come to the same conclusion, and they have since been joined by others.
In the West Virginia action, Mey v. Got Warranty, Inc., the court denied a motion to dismiss for lack of standing in an incipient class action where the plaintiff alleged defendants violated the TCPA by placing “computer-dialed telemarketing calls” to her cellphone and to a separate number registered on the National Do-Not-Call Registry.
The court first held that “unwanted calls” cause tangible economic injury to consumers by exhausting prepaid or limited telephone minutes, and depleting the cellphone battery requiring consumers to pay for electricity to recharge the phone. The court also found that TCPA violations can cause a wide array of intangible harms that qualify as concrete injuries under Spokeo as well. Per the Supreme Court’s analysis that an intangible injury may be sufficiently concrete if it has a close relationship to a harm that has traditionally been a basis for legal action, or if Congress has clearly elevated the injury to a legally cognizable harm, the district court found that (1) invasion of a consumer’s privacy, (2) intrusion upon and occupation of a cellphone’s capacity, and (3) wasting a consumer’s time or causing risk of injury by interrupting or distracting the consumer all are harms that satisfy Article III standing.
In its decision, the Mey court held that invasion of privacy and intrusion and occupation of a cellphone have bases in traditional torts – intrusion upon seclusion and trespass to chattels, respectively – and that Congress recognized invasion of privacy and the waste of a consumer’s time as harms covered by the TCPA when it was enacted. The court also noted that at least one other post-Spokeo decision had held the nuisance of “wast[ing] time answering or otherwise addressing widespread robocalls” is a concrete injury that meets Article III standing.
That case, Booth v. Appstack, similarly involved autodialed/prerecorded marketing calls and found injury-in-fact caused by them, as did another post-Spokeo case the Mey court cited, Rogers v. Capital One Bank, which also found the plaintiff had standing. An even more recent case, Cour v. Life360, reached the same decision for autodialed text messages.
Plaintiff Does Not Have Standing When Calls Are Not “Unwanted”
While Mey and other decisions in its vein recognize a vast swath of harms qualify as concrete injuries under Spokeo, they do not examine whether the plaintiff’s motives in bringing suit affect standing. In a decision likely welcomed by companies forced to defend such lawsuits brought by “professional” TCPA plaintiffs, another district court recently held that a plaintiff who makes a business of bringing TCPA lawsuits – and thus tries to maximize the number of “unwanted” calls she receives – does not suffer an injury sufficient to bring suit in federal court.
In Stoops v. Wells Fargo, a Pennsylvania federal district court granted the summary judgment for the defendant against a “professional” TCPA plaintiff, who admittedly filed TCPA actions as a business endeavor. The court ruled that plaintiff lacked both constitutional and prudential standing to advance her TCPA claims, as she had not suffered injury-in-fact.
During her deposition, the plaintiff confessed that she had previously purchased upwards of three dozen prepaid cellphones solely in the hope of receiving calls from creditors and telemarketers, in order to collect the statutory damages of $500 to $1,500 per violation available to plaintiffs under the Act. The plaintiff obtained Florida area codes to her cellphones numbers, even though she did not live in the state, reasoning that the state was financially distressed and would thus generate a greater volume of autodialed and/or prerecorded debt collection calls.
Plaintiff claimed the Wells Fargo’s calls to her cell phones violated her privacy and caused her economic harm by depleting the plaintiff’s purchased prepaid minutes. Nonetheless, although the district court rejected the majority of defendant’s arguments to dismiss the action, it ultimately granted the defendant summary judgment, concluding that plaintiff did not suffer any injury to a legal or economic interest protected under the TCPA.
Under Spokeo, the court held, the plaintiff’s privacy interests were not violated because her lone purpose in purchasing roughly 35 cellphones was to bring TCPA suits. As such, the calls she received were neither a nuisance nor an invasion of her privacy. Similarly, because the plaintiff’s only purpose for purchasing prepaid minutes for her cellphones was to receive calls as part of the TCPA litigation “business,” the court found the calls (and use of her prepaid minutes) were not economic injury.
The court also held that plaintiff did not satisfy the requirements for prudential standing because her interest in buying dozens of cellphones “with the hope of receiving calls from creditors for the sole purpose of collecting statutory damages” were not within the “zone of interests” Congress sought to protect under the TCPA. Instead, the court labeled it “unfathomable” that Congress sought to protect plaintiff’s actions, given that the TCPA was passed due to “outrage over the proliferation of prerecorded telemarketing calls…which consumers regarded as an intrusive invasion of privacy and a nuisance.”
The importance of a plaintiff falling within the TCPA’s “zone of interests” was recently echoed in Telephone Science Corp. v. Asset Recovery Solutions, LLC [TSC], where an Illinois federal district court held that a company which runs a robocall-blocking service for its customers did not suffer an injury protected by the TCPA. As part of its robocall-blocking service, TSC subscribed to thousands of “honeypot numbers” and analyzed the calls made to those numbers to “detect high frequency robocalling patterns.” Mirroring Stoops, the TSC court noted that rather than robocalls made to TSC’s honeypot numbers being “unwanted or unwelcome” to TSC, the court found TSC’s service and business depended upon it receiving such calls so that it could detect and filter robocalls placed to its customers. As such, TSC did not suffer any invasion of privacy or nuisance, and that any economic injury was inherent to its business.
Might the Courthouse Door Be Closing on Professional TCPA Plaintiffs?
Mey, Appstack, and similar decisions are likely the opening salvos as courts begin to clear their docket of TCPA actions stalled while the parties awaited the resolution of Spokeo’s standing questions. Plaintiffs eager to resurrect their TCPA actions may be heartened by the declarations that the types of harms plaintiffs traditionally allege in TCPA class actions meet the concrete injury requirements outlined in Spokeo. For such plaintiffs, identifying the alleged harm – whether tangible such as economic injury or intangible like invasion of privacy – may become little more than an extra step to complete on the TCPA litigation checklist in order for their complaint to survive a standing inquiry.
But professional TCPA plaintiffs might find the courthouse doors slamming shut if more courts follow Stoops’s and TSC’s lead and declare that plaintiffs who try to make their livelihood by bringing TCPA actions and seek out “unwanted” calls do not suffer any injury to support their claims. To take advantage of this reasoning, companies defending TCPA claims will need to establish during discovery whether the plaintiff’s action is part of a larger scheme to manufacture causes of action and seek statutory damages. The prospect of such discovery, and, ultimately, disposal of lawsuits on this basis, will also likely factor in to the settlement calculus of the plaintiffs’ TCPA bar in making demands, and in that of the companies they target.