Wednesday, October 21, 2015

FYI: 3rd Cir Holds TCPA "Called Party" Includes Regular User and Roommate of Subscriber

The U.S. Court of Appeals for the Third Circuit recently vacated an order of dismissal based on lack of statutory standing under the federal Telephone Consumer Protection Act ("TCPA"), holding that a regular user of a phone line and occupant of the residence of the subscriber has standing to bring an action under the TCPA.


In so ruling, the Court held that a caller may invoke the consent of the "called party" as a defense even if the plaintiff is someone other than the "called party."


The Court also held that, under Fed. R. Civ. P. 12(g)(2), it was error for the district court to consider the motion to dismiss when the standing issue should have been raised in a previously filed motion to dismiss.

A copy of the opinion is available at: Link to Opinion

A telemarketer, seeking to advertise credit cards, called the phone shared by the intended recipient of the call and her roommate using a prerecorded message.


The roommate filed suit, alleging that the message violated the advertising restrictions of the federal Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227, which among other things prohibits any person from "initiat[ing] any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the [Federal Communications] Commission." 47 U.S.C. § 227(b)(1)(B).


The bank filed a motion to dismiss asserting collateral estoppel, and subsequently filed another motion to dismiss asserting lack of standing.


The district court granted defendant bank's second motion to dismiss, reasoning that the roommate was not the "called party" under §227(b)(1)(B) of the TCPA, and therefore did not have statutory standing to sue.


On appeal, the Third Circuit first addressed whether the bank's second motion to dismiss violated Fed. R. Civ. P. 12(g)(2), which imposes restrictions on the filing of successive motions to dismiss and states that a party that makes a motion under Rule 12 must not make another motion under Rule 12 raising a defense or objection that was available to the party but omitted from its earlier motion.


The Court stated that the purpose of Fed. R. Civ. P. 12(g)(2), also known as the "consolidation rule," is to eliminate unnecessary delay.  The Court held that the bank could have included its statutory standing argument in the same motion as its collateral estoppel argument, which is the sort of consolidation that Rule 12(g)(2) is meant to encourage.


Consequently, the Third Circuit held that it was error for the trial court to consider the bank's second motion to dismiss.  Nevertheless, it found the error to be harmless because as long as the trial court accepts all of the allegations in the complaint as true, the result is the same as if the defendant had filed an answer admitting these allegations and then filed a Rule 12(c) motion for judgment on the pleadings, which Rule 12(h)(2)(B) expressly permits.


Proceeding to the merits, the Third Circuit addressed whether the roommate had standing to sue, analyzing the Congressional intent of the TCPA.


The Court employed the zone-of-interests test from Lexmark Int'l v. Static Control Components, Inc., 134 S. Ct. 1377 (2014), whereby a statutory cause of action extends only to plaintiffs whose interests fall within the zone of interests protected by the law invoked.


The Third Circuit noted that, although Congress did not expressly limit standing to the "called party," its primary concern in enacting § 227(b)(1)(B) was to protect that party from unwanted robocalls, thus placing a "called party" within the zone of interest.


The Court held that the roommate would fall into the "called party" definition, as a regular user of the phone line who occupies a residence with the subscriber of the number being called, and has an interest in privacy, peace and quiet that Congress intended to protect.


The Third Circuit rejected the trial court's reasoning that a bank who has the consent of the subscriber would face liability whenever any person answers the phone, noting that the called could still raise consent as a defense to such a TCPA action.  In the Court's words, "[t]he caller may invoke the consent of the 'called party' as a defense even if the plaintiff is someone other than the 'called party.'"


In concluding, the Court observed that the TCPA is a remedial statute that should be construed to benefit consumers.  Because it held that the roommate was in the zone of interests that Congress intended to protect when it enacted the TCPA, the Third Circuit vacated the district court's order of dismissal and remanded for further proceedings.





Ralph T. Wutscher
Maurice Wutscher LLP
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