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The Third Circuit Holds That A TCPA Violation Alone Is Sufficient To Establish Standing

The U.S. Court of Appeals for the Third Circuit has held that allegations that a customer received a single, unauthorized prerecorded sales voice mail on her cell phone in violation of the Telephone Consumer Protection Act established a concrete injury sufficient to confer Article III standing in Susinno v. Work Out World, No. 16-3277. The ruling, which came down on July 10, has significant implications for defendants who challenge TCPA and other cases at the pleading stage.

The Telephone Consumer Protection Act

The TCPA of 1991 makes it “unlawful… to use any telephone facsimile machine, computer, or other device to send  to a telephone, facsimile machine, an unsolicited advertisement… .”  47 U.S.C. § 227(b)(1)(C). The TCPA generally prohibits making nonemergency, unsolicited calls advertising “property, goods, or services” using automatic dialing systems and prerecorded messages to telephones and cellular phone.

Background

On July 28, 2015, the plaintiff, Noreen Susinno, received an unsolicited call on her cell phone from Work Out World, a fitness club. When Susinno did not answer the call, Work Out World left a one-minute, prerecorded promotional offer on Susinno’s voice mail.

Susinno filed a putative class action complaint in the U.S. District Court for the District of New Jersey against Work Out World, alleging that Work Out World’s call and voicemail message violated the TCPA’s prohibition against prerecorded calls to cellular telephones. The district court dismissed Susinno’s complaint, holding that a single solicitation was not “the type of case that Congress was trying to protect people against,” and Susinno’s receipt of the call and voicemail did not constitute a concrete injury.

Third Circuit Opinion

The Third Circuit reversed the district court’s dismissal and remanded the case for further proceedings in Susinno v. Work Out World, No. 16-3277 (July 10, 2017), concluding that the TCPA provided a cause of action for the unsolicited prerecorded call and voicemail that Susinno had received and that such a violation of the TCPA was sufficient to establish standing at the pleading stage.

The Third Circuit began its analysis by examining the threshold question of whether the TCPA prohibited the single unsolicited prerecorded call and voicemail alleged by Susinno. Work Out World argued that there was no TCPA violation because the law did not apply to cell phone calls where the called party (such as Susinno) was not charged for the call. The Third Circuit disagreed, holding that a TCPA violation had occurred as “‘calls to a [cell phone]… not charged to the called party’ can implicate ‘privacy rights’ that Congress ‘intended to protect,’ even if the phone’s owner is not charged for the call.”

The Third Circuit then turned to the question of whether Susinno had alleged a concrete injury sufficient to confer Article III standing. Citing Spokeo v. Robbins, 136 S. Ct. 1540, 1549 (2016), the Third Circuit noted that plaintiffs must allege a concrete injury, which may be either tangible or intangible. In determining whether an intangible injury is concrete, the court noted that “both history and the judgment of Congress play important roles.” The court explained that “it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” The court further explained that “Congress is well positioned to identify intangible harms that meet minimum Article III requirements,” and “its judgment is… instructive and important.” Even if an injury was “previously inadequate at law,” Congress may elevate it to “the status of [a] legally cognizable injury[.]”

The Third Circuit next revisited its recent decision in In re Horizon Healthcare Services, Inc. Data Breach, 846 F.3d 625 (3d Cir. 2017), where the court found an alleged violation of the Fair Credit Reporting Act was sufficient to confer Article III standing without any additional allegations that the stolen personal information was misused because Congress had created a cause of action for the unauthorized transfer of personal information. Summarizing the rule of Horizon, the Third Circuit held 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.”

Turning to Susinno’s complaint, the Third Circuit found that it satisfied the first prong of the Horizon rule because Congress “squarely identified” automated and prerecorded calls as a “nuisance and invasion of privacy,” and that the TCPA directly addressed the harm from such conduct. Accordingly, the court held that Susinno had pled “an injury Congress aimed to prevent.” The Third Circuit also found Susinno had satisfied the second prong of the rule. The court observed that the type of close relationship that would satisfy the second prong of the rule “require[s] that the newly established causes of action protect essentially the same interests that traditional causes of action sought to protect.” The court found that the TCPA’s prohibition and private right of action against unsolicited telemarketing phone calls (like the one Susinno received) protected against the same harm to privacy interests as the common law cause of action for intrusion upon seclusion. Therefore, the Third Circuit held that “Susinno had alleged a concrete, albeit intangible harm under the Supreme Court’s decision in Spokeo and [its] decision in Horizon.” 

Takeaways

Susinno has significant implications for the pleading standard for standing (at least in the Third Circuit). Coupled with Horizon, Susinno has substantially lowered the bar for what constitutes a concrete injury in cases involving violations of federal statutes and made it much more difficult for defendants to challenge these cases at the pleading stage with a motion to dismiss for lack of standing. A plaintiff will no longer need to allege any actual injury resulting from a statutory violation. In Susinno, for example, a single, unauthorized, unanswered and uncharged prerecorded phone call and voicemail in violation of the TCPA was deemed a concrete, “albeit intangible” injury sufficient to confer standing. Instead, plaintiffs now apparently need only allege that a federal statute, such as the TCPA or the FCRA, was violated to establish Article III standing at the pleading stage.​​