The consumer class action landscape changed radically last May following the United States Supreme Court ruling in Spokeo v. Robins that plaintiffs must establish concrete harm and not rely solely on statutory violations to support their standing to sue in federal court. Absent a concrete injury, a party cannot maintain a claim in federal court.
The Spokeo defense became a mainstay in the defensive arsenal to defeat class actions involving allegations of violations of the Telephone Consumer Protection Act (“TCPA”). The TPCA, enacted in 1991, prohibits unsolicited autodialed or prerecorded phone calls to consumers’ cell phones unless the consumer consents to such calls. Violations of the TCPA can add up, since each violation carries statutory damages of $500, which can be trebled when the violation is willful. In recent years, the number of TCPA lawsuit has exploded nationwide from under 20 filings in 2007 to nearly 5,000 in 2016.
Spokeo appeared to be a defense to the claims until the Ninth Circuit found plaintiffs had standing, based on the language of the TCPA. In late January 2017, the Ninth Circuit Court of Appeals found that because Congress had identified unsolicited contact as a concrete harm and gave consumers the ability to establish the harm through the TCPA, any violation of the TCPA is a concrete injury which supports standing in federal court (Van Patten v. Vertical Fitness Group). While the defendants in Van Patten eventually succeeded in defeating the TCPA claims based on a defense of revocation of consent, the court rejected the Spokeo defense of lack of standing.
Last week, a California federal judge reversed his prior decision granting a motion to dismiss a class action based on the reasoning in Van Patten. The plaintiffs in the case of Brinker v. Normandin filed suit alleging that a California car dealership and its marketing partner violated the TCPA by making unsolicited calls using an automatic telephone dialing system.
The marketing partner filed a motion to dismiss, arguing that under Spokeo the plaintiffs had failed to demonstrate standing because they did not allege any concrete injuries. The District Court had granted the motion to dismiss in February, relying on the Spokeo reasoning. However, the plaintiffs moved for reconsideration, citing Van Patten. The District Court then reversed itself, finding that because the plaintiffs alleged the car dealership and marketing partner “place unsolicited, automated calls to their phones” without plaintiffs’ permission, they had sufficiently alleged harm to support standing. “After Van Patten, these allegations are sufficient to show that the plaintiffs suffered a concrete injury.”
These cases set the stage for additional challenges to the Spokeo defense. While the future of this defense remains uncertain, some plaintiffs may choose to file suit in state court, since Spokeo only presents a challenge to federal standing. Whether in state or federal court, however, defending a TCPA lawsuit can be costly. Companies should review their policies and procedures to document consent and revocations of consent, since these consents continue to be the front-line defense of a TCPA lawsuit.