Three months after the Supreme Court’s landmark Facebook ruling, a growing number of trial courts have grappled with interpreting and applying the High Court’s directive. One of the more interesting decisions came out of the Eastern District of Michigan recently. In Barry v. Ally Fin., Inc., No. 20-cv-12378, 2021 WL 2936636, at *1-7 (E.D. Mich. July 13, 2021), the district court dismissed a putative TCPA class action on the grounds that the plaintiff failed to allege use of an ATDS. More significantly, the district court interpreted Facebook to hold that to be an ATDS, the dialing system must actually use a random or sequential number generator to call the plaintiff, and not merely have the capacity to do so.
S.D. Cal. Court Dismisses Claims, Finding Text Messages at Issue Were Not “Telephone Solicitations”
The Southern District of California recently granted (in part) a motion to dismiss in Gross v. GG Homes, Inc., 2021 WL 2863623 (S.D. Cal. 2021), because the text messages at issue were not “telephone solicitations” within the meaning of the TCPA. Notably, the Court found that the text messages did not qualify as solicitations because they were “targeted at procuring services from Plaintiff” (as opposed to selling something to Plaintiff).
Plaintiff alleged that Defendant (a real estate firm) violated the TCPA when it sent text messages (and placed calls) to her cell phone. Defendant filed a motion to dismiss challenging her Article III standing as well as the sufficiency of her factual allegations for her TCPA claims. The Court began by rejecting Defendant’s arguments that Plaintiff lacked standing, that Plaintiff failed to allege facts showing that Defendant might be responsible for the texts at issue, and that Plaintiff failed to allege that Defendant used an ATDS to send the text messages. But the Court agreed with Defendant that Plaintiff’s § 227(c) claims—based on sending the text messages to a number on the national Do-Not-Call Registry—must be dismissed.
Facebook Decision Upends TCPA Litigation Landscape
TCPA Blog’s Mike Daly co-authored an article for the ABA about the impact of the Supreme Court’s recent ruling in Facebook, Inc. v. Duguid, which clarifies the TCPA’s definition of an ATDS. The article explains that the unanimous decision is a victory for businesses because it limits the scope of the statute’s restriction on autodialing and because it should drastically decrease the volume of litigation arising under that part of the statute, which has been one of the most active areas of litigation in recent years. But the article also predicted that the ruling may cause plaintiffs’ counsel to focus on other calling restrictions, for example its restrictions on artificial or prerecorded voices, Do-Not-Call restrictions, and even faxes.
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District Court Weighs in On TCPA Fax Liability Standards in the Eighth Circuit
The Eastern District of Missouri recently granted a plaintiff’s motion for summary judgment against three defendants in a TCPA fax case. Levine Hat Co. v. Innate Intelligence, LLC, No. 16-cv-01132, 2021 WL 1889869 (E.D. Mo. May 11, 2021). The court’s opinion discusses two areas of law with limited Eighth Circuit authority and illustrates the uncertainty regarding how district courts in the jurisdiction may rule on these issues in the future. Id. at *3-5. Specifically, the opinion discusses the analysis a court may apply to determine if a fax is an “unsolicited advertisement.” Id. at *3-4. The opinion also enumerates the factors a court may consider when assessing whether a “fax broadcaster” demonstrates a sufficiently “high degree of involvement” in the transmission of a fax to render it liable for the transmission. Id. at *3-5.
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Eastern District of Pennsylvania Court Holds Text Claim Satisfies Article III, Then Dismisses for Failure to Allege Enough Facts to Make Claim Plausible
A judge in the U.S. District Court for the Eastern District of Pennsylvania recently concluded that receipt of unwanted text messages in violation of the TCPA can constitute an injury-in-fact for purposes of Article III standing, but nevertheless dismissed the claim (without prejudice) pursuant to Rule 12(b)(6) based on its threadbare allegations.
In Camunas v. National Republican Senatorial Committee, the plaintiff (Rolando Camunas) alleged that he received no less than six unsolicited text messages from the defendant (NRSC) asking him to donate to a political party. Civil Action No. 21-1005, 2021 WL 2144671, at *1 (E.D. Pa. May 26, 2021). In his complaint, Camunas described the messages as “generic and obviously pre-written” and alleged that they were sent using an automatic telephone dialing system (ATDS), in violation of the TCPA. Id.
Fifth Circuit Finds Injury In Fact after Single Text Message
The Fifth Circuit recently held that a TCPA plaintiff who received a single text message suffered an Article III injury sufficient to support standing for his claim. In Cranor v. 5 Star Nutrition, L.L.C., No. 19-51173, 2021 WL 2133433 (5th Cir. May 26, 2021), the plaintiff alleged that 5 Star Nutrition violated the Telephone Consumer Protection Act (TCPA) when it sent him several unsolicited advertising text messages. The parties entered into a settlement agreement to avoid litigation. After the settlement, 5 Star Nutrition sent one final promotional text message and the plaintiff filed suit, claiming that the single text message harmed him by invading his privacy, interfering with his right to his cellular phone and telephone line, and intruding upon his seclusion.
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District Court Departs from Supreme Court Plurality to Find Government-Debt Collector Retroactively Liable Under TCPA — But Rejects Statutory Damages
For nearly five years, the TCPA explicitly excluded from liability calls made to collect government-backed debt. Naturally, government debt collectors relied on this exception and called debtors without fear of TCPA liability. In 2020, the Supreme Court ruled that this exception was unconstitutional and severed it from the statute. Now, a federal district court has ruled that government debt collectors may be liable for calls made prior to the Supreme Court Ruling, despite their reasonable reliance on the exception. In doing so, the court brushed aside due process concerns.
As previously reported, the government debt exception was severed from the statute by the Supreme Court’s decision in Barr v. AAPC. The AAPC decision was highly fractured—with the Court issuing four opinions but none commanding a majority. Since, district courts have been grappling with AAPC means for the statute.
Business or Residential? Ambiguity Surrounding Number on Do Not Call Registry Can Defeat Class Certification
In an interesting decision from the District Court of Oregon, United States Magistrate Judge Youlee Yim You recommended granting a motion to deny class certification where uncertainty about the appropriate classification of a cell phone number’s use was enough to make the plaintiff an inadequate class representative with atypical claims. Mattson v. New Penn Fin., LLC, No. 3:18-cv-00990, 2021 WL 1406875 (D. Or. Mar. 8, 2021).
In Mattson, the plaintiff filed a TCPA class action, claiming the defendant, New Penn Financial, LLC, called his cell phone while it was registered on the national Do Not Call Registry in violation of 47 C.F.R. § 64.1200(c). Id. at *1. As readers of this blog will note, 47 C.F.R. § 64.1200(c)(2) prohibits telephone solicitations made to residential telephone subscribers who are registered on the Do Not Call Registry. New Penn sought denial of class certification, arguing the uncertainty of Plaintiff’s standing made his claims atypical, rendering him an inadequate class representative. Id. In considering the motion, the Court identified an issue unique to the plaintiff—whether the cell phone number at issue was properly considered a residential or business telephone number. Id. at *5.
Another Fifth Circuit Court to Follow in Creasy’s Footsteps
The Eastern District of Texas recently dismissed a plaintiff’s TCPA claim in Cunningham v. Matrix Financial Services, LLC, No. 4:29-cv-896 (E.D. Tex. Mar. 31, 2021) for lack of subject matter jurisdiction.
This decision came after the District Court rejected the magistrate judge’s recommendation that subject matter jurisdiction was proper. The recommendation focused on the Supreme Court’s recent decision in Barr v. American Association of Political Consultants (“AAPC”), 140 S. Ct. 2335 (2020), which held that the government-debt exception violated the First Amendment. The magistrate judge noted that, following AAPC, the majority of district courts had held that federal courts retained subject matter jurisdiction over TCPA claims brought under § 227(b)(1)(A)(iii) during the exception’s existence. Those that did not were deemed unpersuasive given that “[t]he Supreme Court in AAPC explicitly found that the government-debt exception in the TCPA was severable from the remainder of the statute and declined to strike down the TCPA’s entire robocall ban.” Further, the magistrate judge reasoned that “[t]he dispositive inquiry lies in . . . [footnote twelve of AAPC]”, which stated that the AAPC Court’s “decision does not negate the liability of parties who made robocalls covered by the robocall restriction.”
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Sixth Circuit Rejects Strict Liability for Products Advertised via Fax, “Some Level of Knowledge” Required
The U.S. Court of Appeals for the Sixth Circuit recently re-affirmed its position that manufacturers of products advertised in unsolicited fax messages do not face strict liability under the TCPA’s junk-fax provision. To face liability, the manufacturers must at least be aware that fax advertisements are being sent.
In Lyngaas v. Curaden AG, a dentist sued a Swiss toothbrush manufacturer, Curaden AG, and its American subsidiary, Curaden USA, for sending unsolicited fax advertisements for their toothbrushes. 992 F.3d 412, 417 (6th Cir. Mar. 24, 2021). The district court concluded that Curaden AG could not be held liable for the faxes because Curaden USA had designed and broadcasted the faxes on its own, without parent authorization. Id. at 423. On appeal, the dentist argued that FCC regulation extended liability to any entity “whose goods or services are advertised or promoted” in a fax, regardless of knowledge. Id. at 424 (quoting 47 C.F.R. § 64.1200(f)(10)).