Tuesday, August 1, 2017

FYI: 3rd Cir Holds Single Unsolicited Automated Call Enough to Confer Standing

The U.S. Court of Appeals for the Third Circuit recently held that a consumer satisfied the concreteness requirement for constitutional standing and asserted a valid cause of action under the federal Telephone Consumer Protection Act ("TCPA"), where she alleged she received one unsolicited prerecorded phone call to her cell phone.


Accordingly, the Third Circuit reversed the order of the trial court granting the defendant's motion to dismiss.    


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


The plaintiff consumer ("Consumer") alleged that she received an unsolicited call on her cell phone from the defendant fitness company ("Company").  The Consumer did not answer the call, but the Company left a prerecorded promotional offer that lasted one minute on her voicemail.  The Consumer alleged the phone call and message violated the TCPA's prohibition on nonconsensual prerecorded calls to cellular telephones.


The Company filed a motion to dismiss, which was granted by the trial court.  In so ruling, the trial court found that: (1) a single solicitation was not "the type of case that Congress was trying to protect people against," and (2) the Consumer's receipt of the call and voicemail caused her no concrete injury.


The Consumer appealed. 


On appeal, the Third Circuit first noted two questions were presented: (1) does the TCPA prohibit the conduct alleged by the Consumer, and (2) if it does, is the harm alleged sufficiently concrete for Article III standing.


As to the first question, the Company argued that the TCPA does not prohibit a single prerecorded call to a cell phone if the phone's owner was not charged for the call. 


As you may recall, the TCPA provides that it shall be unlawful for any person "to make a call . . . using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service, . . . or any service for which the called party is charged for the call . . ." 47 U.S.C. § 227(b)(1).


The Company argued that the structure of this provision limits the scope of "cellular telephone service" to cell phone services where "the called party is charged for the call."  The Company further asserted that when Congress passed the TCPA, it was primarily concerned with the costs of those calls.


The Third Circuit disagreed, noting that the Company's "reading of section 227(b)(1) is strained." 


Quoting the Eleventh Circuit, the Third Circuit stated: "[t]he rule of the last antecedent requires the phrase 'for which the called party is charged for the call,' [in § 227(b)(1)], to be applied to the words or phrase immediately extending to or including others more remote."  Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1257 (11th Cir. 2014).


The Third Circuit also found support in section 227(b)(2)(C), which provides that the Federal Communications Commission ("FCC") "may . . . exempt from the requirements of paragraph (1)(A)(iii) of this subsection calls to a telephone number assigned to a cellular telephone service that are not charged to the called party."  The Third Circuit noted that if "cell phone calls not charged to the recipient were not covered by the general prohibition, there would have been no need for Congress to grant the FCC discretion to exempt some of those calls." 


The Court therefore held that "the TCPA provides [the Consumer] a cause of action for the conduct she alleged." 


With respect to the question of whether the Consumer alleged a sufficiently concrete injury to establish constitutional standing to sue, the Third Circuit first noted the issue implicates the Supreme Court's decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).


In discussing the Spokeo decision generally, the Third Circuit found it significant that the Supreme Court "noted that 'intangible injuries can nevertheless be concrete.'"  The Third Circuit further referred to its own ruling in In re Horizon Healthcare Services Inc. Data Breach Litigation, 846 F.3d 635 (3d Cir. 2017) wherein it applied Spokeo to a claim for inadequate protection of personal information in violation of the Fair Credit Reporting Act.


In summarizing the rule from Horizon, the Third Circuit stated: "When one sues under a statute alleging 'the very injury [the statute] is intended to prevent,' and the injury 'has a close relationship to a harm . . . traditionally . . . providing a basis for a lawsuit in English or American courts,' a concrete injury has been pleaded.  We do not, and need not, conclude that intangible injuries falling short of this standard are never concrete.  Rather, we simply observe that all intangible injuries that meet this standard are concrete."  (Internal citations omitted). 


Applying this standard to the facts of the case, the Third Circuit determined that "Congress squarely identified [the] injury" at issue because the "nuisance and invasion of privacy" resulting from a single prerecorded telephone call is the type of harm Congress sought to prevent in enacting the TCPA. 


The Third Circuit then turned to the historical inquiry, and determined that the Consumer satisfied that test as well.  In so ruling, the Third Circuit noted that the Ninth Circuit "has opined that TCPA claims closely relate to traditional claims for invasion of privacy, intrusion upon seclusion, and nuisance," which have long been valid claims in American courts. 


The Third Circuit then determined that intrusion upon the seclusion best fit the circumstances of the case, because the consumer's privacy is invaded by the phone calls.  The Court noted that although two or three calls would not traditionally be actionable under an intrusion upon the seclusion claim, Congress intended the TCPA to elevate a harm that, while "previously inadequate in law," was of the same character of previously existing "legal cognizable injuries."


Accordingly, the Third Circuit held "that [the Consumer] alleged a concrete, albeit intangible, harm. . ."  The Court further held "that the TPCA provides [the Consumer] with a cause of action, and that her injury satisfies the concreteness requirement for constitutional standing." 




Ralph T. Wutscher
Maurice Wutscher LLP
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Email: rwutscher@MauriceWutscher.com


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