Third, Fifth Circuits Weigh In on Standing—With Different Results

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Two different federal appellate panels recently reached diverging conclusions on the question of whether a single phone call or a single text provides a sufficient injury in fact for an individual to establish standing to sue under the Telephone Consumer Protection Act (TCPA).

While the U.S. Court of Appeals for the Third Circuit determined that a single phone call without an accompanying claim for nuisance, annoyance, inconvenience, wasted time or other injury wasn’t enough, the Fifth Circuit held that the receipt of a single text message provides standing to sue under the TCPA.

In the Third Circuit, Mark Leyse received a phone call made by DialAmerica Marketing on behalf of Bank of America to the phone number he shared with his roommate.

Leyse heard a prerecorded message: “This call is on behalf of Bank of America … for telemarketing purposes. We’re sorry we missed you and we will try calling back at another time.”

Leyse filed suit alleging a single count of violation of the TCPA. He did not allege that he suffered any annoyance or nuisance from the call and only asked for statutory damages.

At the time he received the call, Leyse was actually an investigator for a TCPA plaintiffs’ attorney. In that role, he called companies—using a fake name and withholding his true purpose for the call—and asked questions about the nature and frequency of their telemarketing calls. He placed roughly 20 calls to DialAmerica to solicit information and even twice declined to be added to the company’s do-not-call list.

Bank of America responded to the lawsuit with a motion for summary judgment, arguing that Leyse lacked Article III standing to sue under the statute. The district court agreed and granted the motion.

Leyse appealed. Article III standing does not require any allegations of harm beyond the statutory violations themselves, he told the court.

But the Third Circuit affirmed summary judgment for the defendant in a nonprecedential opinion, “declin[ing] to adopt such an absolute rule of standing with respect to the TCPA.”

The panel noted that in Spokeo, Inc. v. Robbins, the Supreme Court recognized that Congress may elevate certain intangible harms “to the status of legally cognizable injuries,” even if those injuries “were previously inadequate in law,” but that this “does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right.”

“We have recognized Spokeo teaching that ‘there are some circumstances where the mere technical violation of a procedural requirement of a statute cannot, in and of itself, constitute an injury in fact,’” the court wrote.

However, the Third Circuit, in 2017’s Susinno v. Work Out World Inc., that “‘[w]hen 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.”

“In a prior appeal in this matter, we held that the TCPA is intended to prevent harm stemming from nuisance, invasions of privacy and other such injuries,” the panel said. “Therefore, Leyse must allege one of those injuries that the TCPA is intended to prevent. The district court found that Leyse did not assert such an injury. Leyse does not dispute this finding. Accordingly, Leyse cannot show a concrete harm that is necessary to demonstrate an injury-in-fact.

“Such a demonstration is required to establish Article III standing to sue under the TCPA. Because we hold that Leyse lacks standing, we need not address Leyse’s additional challenges to the district court’s grant of summary judgment against him.”

However, the Fifth Circuit reached a different conclusion in a case involving a single text message.

After making a purchase at 5 Star Nutrition’s Austin, Texas, location, Lucas Cranor received several unsolicited advertising text messages, even after he responded with a “STOP” request.

The parties entered into a pre-suit settlement agreement to avoid litigation, and 5 Star agreed to pay Cranor $1,000.

Despite the deal, 5 Star sent Cranor another text to promote a sale. He responded with a class action complaint accusing the company of violating the TCPA.

Cranor additionally claimed that the unsolicited text message was a nuisance and invasion of privacy, that the text trespassed upon and interfered with his rights and interests in his cellphone and intruded upon his seclusion. It also depleted the battery life of his phone as well as the minutes allotted to him, he told the court.

The district court dismissed the complaint for lack of standing, but the Fifth Circuit reversed.

“We conclude Cranor has alleged a cognizable injury in fact: nuisance arising out of an unsolicited text advertisement,” the court said. “Cranor’s asserted injury is thus exactly the one Congress sought to remediate in enacting the Act.”

Looking to history, the panel found that Cranor’s injury “has a close relationship to” common law public nuisance.
 
“Cranor wants to use our nation’s telecommunications infrastructure without harassment,” the panel wrote. “In that sense, he’s similar to someone who wants to use another piece of infrastructure like a road or bridge without confronting a malarial pond, obnoxious noises or disgusting odors. And 5 Star is similar to someone who illegally emits pollution or disease that damages members of the public.”

In addition, Cranor alleged a special harm not suffered by the public at large.

The panel rejected the reasoning of the Eleventh Circuit in Salcedo v. Hanna, where that court said that Congress’ legislative findings “suggest that the receipt of a single text message is qualitatively different from the kinds of things Congress was concerned about when it enacted the TCPA,” and emphasized that the TCPA’s legislative findings refer to residential telephone subscribers.

The TCPA expressly covers cellphones and addresses “nuisance and invasion of privacy” in a variety of other nonresidential contexts, the Fifth Circuit said.

And the Eleventh Circuit’s emphasis on the sustainability of the harm in receiving a single text “misunderstands” Spokeo, the panel said. “Salcedo focus on the substantiality of an alleged harm threatens to make this already difficult area of law even more unmanageable. We therefore reject it.”

To read the opinion in Leyse v. Bank of America, N.A., click here.

To read the opinion in Cranor v. 5 Star Nutrition, LLC, click here.

Why it matters: The two federal appellate court decisions provide bookends on the spectrum of TCPA standing decisions. While the Third Circuit determined that a single phone call without accompanying claims of nuisance or invasion of privacy was insufficient to satisfy the requirements for Article III standing, the Fifth Circuit found that a single text message—albeit with allegations that the plaintiff suffered the additional harms of nuisance and invasion of privacy—was enough.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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