Rare Article III Standing Ruling in Defendant’s Favor in TCPA Case

TCPA Connect

As our readers know, many federal courts have found standing and have refused to dismiss Telephone Consumer Protection Act (TCPA) cases under the principles announced in Spokeo v. Robins. Seeming to buck the trend, the U.S. Court of Appeals, Eighth Circuit agreed with a TCPA defendant that the plaintiff lacked Article III standing to bring suit in federal court. However, rather than focus on whether there was a “concrete injury-in-fact” as in most post-Spokeo cases, the panel ruled that the plaintiff had no standing because the injury was not fairly traceable to the challenged conduct of the defendant, and instead of dismissing the case entirely, it remanded the case to the state court.

In St. Louis Heart Center, Inc. v. Nomax, Inc., the plaintiff alleged it received 12 faxes from Nomax advertising the potassium tablet Effer-K. Six of the faxes included a box to be checked “[i]f you wish to no longer receive faxes from Nomax,” while the other six included a box to be checked next to the statement: “Please do NOT fax to this office.” The Heart Center filed suit, contending that the faxes failed to include a proper opt-out notice.

The plaintiff alleged that the transmissions caused it to lose paper and toner and that the faxes interfered with the Heart Center’s use of its fax machine and telephone line. In addition, employees wasted their time receiving, reviewing and routing Nomax’s faxes, the plaintiff told the court. During discovery, the Heart Center president testified that he never gave permission to have the faxes sent to his office but admitted that he did not attempt to opt out of receiving future transmissions, claiming that the faxes did not have the proper opt-out notices.

Nomax removed the case to federal court and then moved to dismiss the complaint for lack of Article III standing. The district court granted the motion and dismissed the action. While the Eighth Circuit agreed that the plaintiff lacked Article III standing for the case to stay in federal court, it concluded that the proper disposition required it to remand the case to state court.

Writing on behalf of the panel, Circuit Judge Steven M. Colloton wrote that while Congress created a private right of action under the TCPA, that cause of action “does not necessarily mean that a plaintiff alleging a violation of the statute has Article III standing.” Thus, even assuming that the plaintiff’s allegations about the loss of toner and paper, wasted time, and invasions of privacy were sufficient to allege a concrete injury in fact (which the panel did without much consideration, citing to Eleventh and Ninth Circuit precedent), the Heart Center failed to establish that its alleged injuries were “fairly traceable to an alleged violation of the TCPA,” the panel said.

“The district court found that the Heart Center ‘both invited and did not rebuke’ the challenged faxes,” the panel wrote. “This finding is not clearly erroneous.” The Heart Center’s president admitted that he requested samples of Nomax’s Effer-K product on at least four occasions and acknowledged that the lawsuit was not based on the fact that consent was not given.

“In that posture, the Heart Center cannot show that its alleged injury is traceable to Nomax’s alleged failure to provide a technically compliant opt-out notice,” the court said. “Whether or not the faxes contained a proper opt-out notice, their transmission would have used the Heart Center’s paper and toner, occupied its phone lines and invaded its privacy. Because there is no ‘causal connection between the injury and the conduct complained of,’ the Heart Center has not established traceability.”

The panel was not persuaded by the plaintiff’s alternative argument that Nomax’s failure to satisfy the opt-out requirements was itself a concrete, tangible injury that was traceable to the defendant.

“The district court found that the opt-out notice that Nomax included did convey to recipients the ‘means and opportunity to opt out of receiving future faxes,’” the Eighth Circuit wrote. “This finding is not clearly erroneous. Whatever technical deficiencies might have appeared in the opt-out notices, all twelve faxes contained a box that the recipient could check if he did not wish to receive future faxes, and a domestic fax number to which the form could be returned. All twelve faxes also contained a phone number and an e-mail address for a Nomax representative. … The Heart Center had the means and opportunity to opt out from receiving future facsimiles, but simply declined to do so. Any technical violation in the opt-out notices thus did not cause actual harm or create a risk of real harm. Accordingly, we agree with the district court that the Heart Center lacked Article III standing.”

However, the panel also agreed with the plaintiff that the case should be remanded to the state court. A lack of federal jurisdiction does not obviate the remand requirement of 28 U.S.C. Section 1447(c), the panel said, because state courts are not bound by the limitations of an Article III case or controversy.

To read the decision in St. Louis Heart Center, Inc. v. Nomax, Inc., click here.

Why it matters: Although the Eighth Circuit affirmed dismissal of the suit for lack of standing (ruling that the plaintiff’s alleged injuries were not traceable to the purported TCPA violations), the defendant remains on the hook in the case, which was remanded to state court. The panel’s decision could inspire would-be plaintiffs to file their TCPA lawsuits in state court, reserving a potential fallback in the event the case gets remanded from federal court.



pursuant to New York DR 2-101(f)

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