Third Circuit: ‘Regular users’ of telephone lines can sue under TCPA

By Jessica Karmasek | Oct 28, 2015

PHILADELPHIA (Legal Newsline) - The U.S. Court of Appeals for the Third Circuit, in a precedential opinion this month, held that a “regular user” of a residential telephone has standing to sue under the Telephone Consumer Protection Act.

The Third Circuit, in its Oct. 14 decision, said such a user has standing even if if he or she is not the intended recipient of the call or the subscriber of the line.

“It is clear that the Act’s zone of interests encompasses more than just the intended recipients of prerecorded telemarketing calls. It is the actual recipient, intended or not, who suffers the nuisance and invasion of privacy,” Circuit Judge Julio Fuentes wrote for a three-judge panel that also included judges Dolores Sloviter and Jane Richards Roth.

“This does not mean that all those within earshot of an unwanted robocall are entitled to make a federal case out of it. Congress’s repeated references to privacy convince us that a mere houseguest or visitor who picks up the phone would likely fall outside the protected zone of interests.”

Fuentes continued in the 24-page opinion, “On the other hand, a regular user of the phone line who occupies the residence being called undoubtedly has the sort of interest in privacy, peace, and quiet that Congress intended to protect.”

In Leyse v. Bank of America National Association, the plaintiff was a man who answered a prerecorded telemarketing call from Bank of America on a residential landline he shared with his roommate. The roommate was the subscriber for the telephone number and the intended recipient of the call.

The plaintiff’s purported class action against Bank of America was dismissed by a federal district court on the ground that he was not the “called party” under the TCPA and thus lacked statutory standing to assert a claim. The lower court determined that only the “intended recipient” of a robocall is a “called party” for purposes of the law.

The Third Circuit, in vacating the order of dismissal and remanding the case to the U.S. District Court for the District of New Jersey, said limiting standing to the intended recipient would “disserve” the very purposes Congress articulated in the text of the federal law.

“If the caller intended to call one party without its consent but mistakenly called another, neither the actual recipient nor the (uninjured) intended recipient could sue, even if the calls continued indefinitely,” Fuentes wrote. “We doubt Congress meant to leave the actual recipient with no recourse against even the most unrelenting caller.”

The panel agreed that the plaintiff has alleged enough to survive a motion to dismiss and that the district court erred.

However, the burden of proof will be on the plaintiff to demonstrate that he answered the telephone when the robocall was received, the Third Circuit noted in its ruling.

The TCPA restricts telephone solicitations, i.e. telemarketing, and the use of automated telephone equipment.

In particular, the law limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines. It also specifies several technical requirements for fax machines, autodialers and voice messaging systems -- principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.

Generally, the act makes it unlawful “to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party” except in emergencies or in circumstances exempted by the Federal Communications Commission.

The law permits any “person or entity” to bring an action to enjoin violations of the statute and/or recover actual damages or statutory damages ranging from $500 to $1,500 per violation.

The Third Circuit’s decision could prove harmful to some business that make telemarketing calls to residential telephone lines using an artificial or prerecorded now.

One attorney argues that it “expands considerably” the scope of potential liability under the law for errant calls, and makes it harder to avoid “running afoul” of the strictures of the statute.

Gerald Arth, a partner at Fox Rothschild LLP in Philadelphia, wrote in an article on the firm’s website that the Leyse decision is “likely to further muddy the waters” of TCPA compliance.

“By refusing to limit TCPA liability to calls to intended recipients, and instead extending statutory standing to an amorphous and undefinable class of persons falling within the TCPA's ‘zone of interests,’ the Third Circuit has made it exceedingly difficult if not impossible for telemarketers to comply with their obligations,” Arth wrote.

“In addition, Leyse likely will make it much more difficult for defendants to bring successful motions to dismiss, greatly increasing the time and expense needed to defend TCPA claims and ratcheting up the pressure to settle even claims with little or no merit.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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