The Telephone Consumer Protection Act has long been a focus of consumer litigation, particularly in the class action space. One often-used defense to these claims is an attack on the plaintiff's standing for lack of an injury-in-fact.

Since damages for TCPA class actions can present seven-figure exposure, a successful motion to dismiss for lack of standing is a big win for a defendant fighting these claims.  

There have been differences in outcomes between circuits in what is considered a TCPA injury-in-fact sufficient to confer standing.

However, the Ninth Circuit recently established that all that is required for Article III standing under the TCPA is the receipt of an unsolicited text message or phone call to a number owned or subscribed to by an individual and found on the do-not-call registry, even if that individual is not the primary user of the phone.

On June 30, the U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District Court for the Eastern District of California in Kristen Hall v. Smosh Dot Com Inc. and remanded the claim for further proceedings. The district court had initially dismissed the plaintiff's complaint based on a lack of Article III standing.[1]

In doing so, the Ninth Circuit held that the owner and subscriber of a phone with a number listed on the do-not-call registry suffers an injury-in-fact when unsolicited telemarketing calls or texts are sent to the number, even if the communications are intended for or solicited by another individual, or someone else is using the phone at the time the messages are transmitted.

In effect, this ruling curtails attacks on the pleadings by TCPA defendants, especially in light of the Ninth Circuit's determination that standing is not exclusive and numerous subscribers and users can bring TCPA claims.

The Ninth Circuit did leave open the question of whether a subscriber would have standing if they authorized a third-party user to provide consent to receive telemarketing, and thus companies defending TCPA claims still may have a path forward to attacking standing for subscribers of phones on the do-not-call registry with third-party users. 

In the Ninth Circuit case, the plaintiff Hall was in possession of a cellular phone that was, at times, provided to her 13-year-old son to use in his free time.[2] The plaintiff alleged that she was the owner and subscriber of the cell phone at issue and that she listed its number on the do-not-call registry.[3]

The defendants obtained the personal information for the plaintiff's son and sent him at least five text messages, which specifically solicited business and offered discounts on products. The plaintiff alleged that the defendants violated Section 227(c) of the TCPA by sending text messages to numbers listed on the national do-not-call registry.[4]

The defendants moved to dismiss the first amended complaint for failure to state a claim and for lack of standing on the basis that the plaintiff lacked Article III standing because she failed to plead that she was the user of the phone or actually received any of the soliciting text messages from the defendants.[5]

The district court granted the motion to dismiss on the grounds that the plaintiff did not have Article III standing merely because she was the subscriber and owner of the phone while not addressing any of the merits issues.

On appeal, the Ninth Circuit reversed. It found that the plaintiff had Article III standing to bring the claims under the TCPA. The Ninth Circuit noted that it was well established that unsolicited telemarketing phone calls or text messages in violation of the TCPA is a concrete injury-in-fact that, itself, is enough to confer Article III standing.[6]

Importantly, the Ninth Circuit made clear that the relevant question for Article III standing is whether the plaintiff suffered a cognizable injury.

Because violation of the TCPA is a concrete injury, and the do-not-call provisions of the TCPA proscribe unsolicited calls and text messages to phone numbers on the do-not-call registry, the plaintiff's allegations that she received unsolicited text messages on a number on the registry were sufficient to confer standing. 

To reach this conclusion, the Ninth Circuit found no precedent that the owner of a cell phone also must be the primary or customary user to be injured by unsolicited phone calls or text messages.[7]

The Ninth Circuit reasoned that requiring a certain level of phone usage to be a prerequisite for standing would go against Congress' intention of preventing individuals on the do-not-call registry from receiving unsolicited text messages.

The Ninth Circuit also opined that this holding would not prevent other users of the phone from bringing claims, as they may also suffer a concrete injury from an unwanted call or text message.

Importantly, the Ninth Circuit did not address the merits of the plaintiff's claim, and refused to discuss the defendants' contention that the plaintiff's son solicited the text messages by signing up for telecommunications through an online form.

Instead, the Ninth Circuit held that, even if the plaintiff's son solicited the messages, the plaintiff still had standing to bring her own claim by the virtue of her status as the subscriber and owner of the phone.[8]

The Ninth Circuit additionally did not address whether a subscriber would have Article III to litigate a TCPA claim if they authorized a third-party user to provide consent to a telemarketer, leaving that question open for the district court to discuss on remand.[9]

With the Ninth Circuit leaving open the question of whether a subscriber would have standing if they authorized a third-party user to provide consent to receive telemarketing, companies defending TCPA claims still may have a path forward to attacking standing for subscribers of phones on the do-not-call registry with third-party users.

The discussion on the merits will turn to other relevant provisions of the TCPA, as a telemarketer may raise an affirmative defense to liability under the TCPA if:

(i) the call was placed in error and certain procedural requirements were met; (ii) the telemarketer has obtained the subscriber's prior express invitation or permission; or (iii) the telemarketer has a personal relationship with the recipient.[10]

On remand, it will be important for companies to take note of the district court's discussion and ruling on the merits as a future method of defending against TCPA claims where a third party provides consent to contact a phone number on the do-not-call registry.

The district court's consideration of the merits of the claim, the TCPA provisions and the applicable affirmative defense will provide guidance on this issue.

Until then, companies should be cognizant that even if a phone user solicited communications by signing up for those communications, the phone subscriber will still have standing to bring a claim under the TCPA.

As a result, it behooves companies to take precautions to have up-to-date do-not-call registry lists, provide clear opt-in and opt-out methods, and utilize business texting software that is compliant with the TCPA.

References

[1] No. 22-16216 (9th Cir. June 30, 2023).

[2] Hall, No. 22-16216, at 5-6.

[3] Id. at 9.

[4] Id.

[5] Id. at 6-7.

[6] Van Patten v. Vertical Fitness Grp., LLC , 847 F.3d 1037, 1043 (holding that "[u]nsolicited telemarketing phone calls or text messages, by their nature, invade the privacy and disturb the solitude of their recipients). Id. at 8.

[7] Id. at 13.

[8] Id. at 14.

[9] Id. at 9.

Reprinted with permission of Law360.