July 21, 2017

Breaking Spokeo’s Concrete Block to Stop Nuisance Callers: An Update on Privacy Lawsuits against Telemarketers

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Editor’s Note: Summer Associate Katelyn Skeens co-authored this article.

Last year we predicted (and many defendants hoped) that the Supreme Court’s guidance on standing to sue provided in Spokeo v. Robins would spell the end to opportunistic and abstract privacy-based statutory claims brought under various federal statutes including the Telecommunications Act. Our early federal court analysis in a post-Spokeo world suggested we were right. We had looked at statutory claims over improper records disposal by cable providers, and Spokeo seemed to put an end to those.  

However, the decision in Spokeo has been less influential for claims brought against nuisance callers under the Telephone Consumer Protection Act (TCPA), designed to protect consumers against aggressive telemarketing. At least, this seems to be the case in the Third Circuit Court of Appeal’s July 10 decision in Susinno v. Work Out World, Inc..

Spokeo clarified that “standing requires a concrete injury even in the context of a statutory violation” and a “bare procedural violation, divorced from concrete harm” will not be sufficient to support a lawsuit. We’ve written before about whether the decision may put a stop to sometimes opportunistic claims brought under the TCPA after wayward text messages to reassigned phone numbers. The ”injury” from such mistaken messages seems trifling, but perhaps we’re being overly sympathetic to the commercial texter unaware that a message has simply gone to the wrong person.

When a TCPA claim involves unsolicited communication to the intended recipient, or to a barrage of random recipients, courts are not feeling so constrained. After all, in Spokeo the Supreme Court said Congress was ”well positioned to identify intangible harms” that would meet the ”injury-in-fact” requirements to sue in federal courts. 

One call can injure?

 Susinno received one unsolicited call to her wireless phone promoting a fitness company. Work Out World (WOW) left a one-minute pre-recorded promotional message when she did not pick up. Susinno sued, alleging violation of the TCPA. She claimed in her complaint that WOW’s call and message were a “nuisance and invasion of privacy” and depleted the battery life on her cell phone.

The lower court dismissed the complaint, pointing out that a single call was not “the type of case that Congress was trying to protect people against” in enacting the TCPA. An appeal followed, and the Philadelphia Appeals Court used its own application of Spokeo to the facts at hand. In looking at what Congress was trying to protect against under the TCPA, and using Spokeo’s words to support its conclusion, the court explained:

“Congress was not inventing a new theory of injury when it enacted the TCPA. Rather, it elevated a harm that, while “previously inadequate in law,” was out of the same character of previously existing “legally cognizable injuries”… Spokeo addressed, and approved, such a choice by Congress.”

 The Court concluded that, although Sussino’s harm may be intangible, Congress had “squarely identified this injury” in the TCPA. Thus, Susinno’s complaint asserts “the very harm that Congress sought to prevent.”

The Third Circuit is not alone in finding standing for plaintiffs in nuisance call cases.

Since Spokeo, 6th Circuit district courts have reached similar conclusions under the TCPA this year.

A district court in Michigan refused to dismiss a plaintiff’s claim of violation of the TCPA when she began receiving automated text messages which she had not agreed to receive.

Another district court in Ohio held that a plaintiff had standing to bring a violation under the TCPA after receiving a fax (delivered via email), concluding that the plaintiff suffered a concrete injury from having to spend valuable time on junk email rather than “more productive business activities.”

One Kentucky federal court found standing for a plaintiff alleging violation of the TCPA. The plaintiff had received at least 35 automated calls from a collection agency in a two to three month period, clearly a greater privacy invasion than one phone call from a gym.

Verdicts can be devastating

Businesses using automated calling and texting should consider the risks of being sued over wayward messages and unwelcome calls. The TCPA provides statutory damages of up to $1,500 per call and class claims can be devastating. Dish Network was recently hit with a $280 million TCPA judgment in Illinois and a $61 million dollar judgment in North Carolina for its telemarketing activity. 

Our Privacy and Information Security team stays current with changing regulations and guidance that can make the difference in your business practices and, if necessary, in court.