Consumer Finance Insights
February 9, 2017

Ninth Circuit Adopts Broad Interpretation of Spokeo and Article III Standing Requirement

On Monday, January 30, 2017, the Court of Appeals for the Ninth Circuit held in Van Patten v. Vertical Fitness Group, LLC, No. 14-55980, that the plaintiff’s allegation that he received unsolicited text messages in violation of the Telephone Consumer Protection Act (TCPA) satisfied the “concrete injury” standing requirement as articulated in the U.S. Supreme Court case Spokeo, Inc. v. Robins.  The Van Patten case involved a plaintiff who had filled out a gym membership and provided the gym with his cell phone number but then cancelled the membership three days later.  Several years later, the plaintiff received two text messages from the gym, and the plaintiff brought a putative class action alleging violations of the TCPA.  The Court ultimately affirmed dismissal of the plaintiff’s TCPA claim because it found the plaintiff had given prior express consent to receive the text messages at issue and had not effectively revoked that consent, but the case is important because it establishes a very broad interpretation of Article III’s standing requirements.

Plaintiffs must satisfy the Constitutional requirements for standing, codified in Article III of the Constitution, in order to bring a claim in federal judicial courts.  Among these requirements is that a plaintiff must have suffered an “injury in fact.”  As LenderLaw Watch has previously reported—hereherehere, and here—the U.S. Supreme Court’s Spokeo decision provided guidance on the “injury in fact” requirement.  In Spokeo, the Court observed that, for an alleged harm to amount to an “injury in fact,” it must be both “concrete” and “particularized.”  Although the Court did not define the limit of what may constitute a sufficient harm, the Court’s opinion nevertheless suggested that the alleged harm must include something more than a “bare procedural violation” of a statute.  In other words, the Court recognized that not all statutory violations result in actual harm.  That being said, the Spokeo court left open the possibility that violations of consumers’ statutory procedural rights may be sufficient in certain circumstances so as to constitute a concrete and particularized harm.

In Van Patten, the Court observed that Congress has the authority to establish concrete harms for Article III purposes and that Congress did so in enacting the TCPA.  The Ninth Circuit observed that “[u]nsolicited telemarketing phone calls or text messages, by their nature, invade the privacy and disturb the solitude of their recipients.”  Accordingly, the court held that “[a] plaintiff alleging a violation under the TCPA ‘need not allege any additional harm beyond the one Congress has identified'” (quoting Spokeo).

Despite holding that the plaintiff satisfied the Article III standing requirements, the Ninth Circuit ultimately affirmed dismissal of the plaintiff’s TCPA claim, holding that he both consented to the text messages and failed to expressly revoke his consent.  In so finding, the Court rejected the defendants’ position that the provision of a cell phone number amounts to consent to any and all communications, and instead more narrowly held that “an effective consent is one that relates to the same subject matter as is covered by the challenges calls or text messages.”  In other words, the transactional context in which a consumer provides his or her cell phone number determines the scope of the consumer’s consent to contact.  Here, the Ninth Circuit held that by providing his cell phone number in connection with his gym membership application, the plaintiff consented to text messages related to gym membership—including the two that were the subject of his complaint.  The Court further held that the plaintiff’s gym cancellation did not effectively revoke his consent.  According to the Ninth Circuit, “[r]evocation of consent must be clearly made and express a desire not to be called or texted”; here, there was no evidence in the record that suggested the plaintiff told the defendants to cease contacting him.

Van Patten is the most recent case in a series of suits involving the issue of whether a plaintiff’s harm is sufficiently concrete to support standing under Spokeo.  In the context of the TCPA, federal district courts have reached opposite conclusions as to whether an allegation of a TCPA violation, without any additional alleged injury, is sufficient to establish Article III standing.  Compare Sartin v. EKF Diagnostics, Inc., 2016 WL 3598297 (E.D. La. July 5, 2016) (dismissing plaintiff’s TCPA claim because plaintiff failed to articulate an injury aside from the alleged statutory violation, as required by Spokeo), Ewing v. SQM US, Inc., No. 3:16-cv-1609, 2016 WL 5846494 (S.D. Cal. Sept. 29, 2016) (holding that plaintiff had failed adequately to plead injury because plaintiff’s injury would have occurred even if the defendant had not used an ATDS and had instead called him manually), and Romero v. Dep’t Stores Nat’l Bank, No. 3:15-cv-193, 2016 WL 4184099 (S.D. Cal. Aug. 5, 2016) (noting that plaintiff’s alleged injury would have occurred via manual calls as well, and rejecting the idea that a bare statutory violation could satisfy the injury requirement for standing), with LaVigne v. First Community Bancshares, Inc., No. 1:15-cv-934, 2016 WL 6305992 (D.N.M. Oct. 19, 2016) (concluding that the TCPA’s prohibitions were substantive, rather than merely procedural, so an allegation of a statutory violation alone was sufficient to plead an injury under Spokeo).

The Ninth Circuit’s opinion in Van Patten is significant because it adds another voice to the national debate over how to apply Spokeo to cases alleging violations of the TCPA.  It also is binding over the federal district courts within the Ninth Circuit (including the Southern District of California, which had issued the Ewing and Romero opinions mentioned above), so litigants in district court cases in that Circuit will need to evaluate whether, and how, the Van Patten case affects their suits.  LenderLaw Watch will continue to monitor the courts’ application of Spokeo to the TCPA and other statutes and will bring you updates as they occur.