In Palm Beach Golf Center—Boca, Inc. v. Sarris, 771 F.3d 1274 (11th Cir. 2014), the Eleventh Circuit Court of Appeal rejected a constitutional “injury in fact” standing defense where the plaintiff had no memory of receiving, seeing or reading a one-page fax. The court held that injury sufficient for standing purposes was established by tying up of a fax transmission line, in this instance for 60 seconds, according to the plaintiff’s expert witness. But the potentially more troubling aspect of this decision may be a flawed additional rationale that future plaintiffs may misapply to try to argue that non-recipients of faxes have standing to sue under the Telephone Consumer Protection Act (“TCPA”), something the Eleventh Circuit surely did not intend.
Standing under the TCPA has always been a difficult issue for defendants. The TCPA’s much-ballyhooed private right of action does state that any “person” may bring suit for a TCPA violation, not just an “aggrieved” or “injured” person. 47 U.S.C. § 227(b)(3).
But does that really mean Congress intended to let anyone anywhere sue for any TCPA violation without an Article III “injury in fact”?
No. Numerous district court opinions have held that—although the TCPA affords “statutory standing” to anyone—the language of the TCPA does not disturb traditional application of constitutional and prudential standing limitations. See, e.g., Anderson v. AFNI, Inc., 2011 WL 1808779, at *7-8 (E.D. Pa. May 11, 2011) (“The TCPA makes plain that the only limitations on standing under the statute are those imposed by constitutional and prudential requirements.”)
As Palm Beach Golf Center itself recognizes, this traditional approach requires that a plaintiff suffer an “injury in fact”—an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not “conjectural” or “hypothetical.” See Martin v. Leading Edge Recovery Solutions, LLC, 2012 WL 3292838, at *4-5 (N.D. Ill. Aug. 10, 2012). So basic are these requirements that the United States Supreme Court speaks of them as “irreducible constitutional minimums,” “essential and unchanging parts” of the Constitution and even as “a key factor in dividing the power of government between the courts and the two political branches.” Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765, 771 (2000).
While it is true that courts have stretched to afford most any owner or user of a telephone line an “injury in fact” sufficient to establish standing to assert a TCPA claim, truly incidental recipients of calls—such as individuals that answer stray calls intended for someone else and placed to someone else’s phone line—were always assumed to lack the necessary standing. See, e.g., Leyse v. Bank of America, N.A., 2010 WL 2382400, at *4 (S.D. N.Y. June 14, 2010).
In Palm Beach Golf Center, the plaintiff’s expert proved that a one-page fax violating the TCPA had been successfully transmitted to the plaintiff’s fax machine. However, no one at the Golf Center ever recalled seeing or actually receiving the fax. No problem, says the Eleventh Circuit. The evidence of the successful transmission—which tied up the Golf Center’s fax machine for one whole minute—was sufficient to demonstrate an Article III “injury in fact.” 771 F.3d at 1281-82.
Not content to stop there, the Eleventh Circuit panel concocted another rationale for its holding, involving an imagined injury to the United States itself. “Palm Beach Golf [also] possesses standing because the TCPA functions as a congressionally created ‘bounty,’ permitting private individuals to sue based on a statutory violation.” Id. at 1282.
While this statement may not be unusual, the analysis applied to get there is.
First, the panel recognizes that “[i]n the ordinary case, mere statutory authorization of a citizen suit alone is not sufficient to create standing under Article III.” Id. Perfectly true.
Next, the panel recognizes a Supreme Court exception “where Congress has created a statutory scheme by which it assigns an injury, inflicted upon the federal government, to private citizens.” Id. Also true, but as the panel itself points out, this doctrine is extremely limited: Congress can only “assign an injury to the government’s sovereignty to private citizens for purposes of bringing suit.” Id. (citing ex rel. Stevens, 529 U.S. at 774 (“[T]he United States’ injury in fact suffices to confer standing on respondent.”))
But what does the Congressional ability to assign an injury to the government have to do with the ability of a Golf Center to sue for a phantom transmission sent to its own fax machine?
As the Eleventh Circuit panels sees matters: “where a federal statute prohibits conduct, Congress may expressly permit individual citizens to bring suit against those who engage in the prohibited conduct.” Palm Beach Golf Center, 771 F.3d at 1282. Hence, it concludes: “Palm Beach Golf has Article III standing as a result of Congress’s assignment to Plaintiff of the United States’ injury resulting from [defendant’s] alleged violation of the TCPA’s fax ban.” Id.
Did you catch the sleight of hand? The Vermont Agency of Natural Resources doctrine only applies where the government has a damage claim; i.e. where the United States has suffered an injury in fact sufficient to confer standing via assignment to private individuals. But in Palm Beach Golf Center the United States was not injured at all. Palm Beach Golf Center owned the fax machine—not the United States of America.
Yet in presenting this rationale, the Eleventh Circuit panel presumed that the United States is always injured anytime the TCPA (and perhaps any federal statute) is violated.
Now let that sink in for a moment. Anytime the TCPA is violated the United States, itself, has been directly injured. Yes, that one minute of lost facsimile time was not just an injury suffered by Palm Beach Golf Center, but a wound suffered by this entire great nation of ours. And because the vehicle for the “assignment” of this imagined national injury must be the TCPA itself, which does not limit standing to aggrieved or injured persons, does this mean that anyone can be a bounty hunter suing to collect statutory penalties for TCPA violations? Fortunately, the Palm Beach Golf Center holding is expressly limited to a recipient of a fax. But one wonders when some enterprising plaintiffs’ attorney will make the dubious argument that this flawed second rationale supports extension of standing to a non-recipient—a deputized bounty hunterif you will.
For more information about the TCPA in general or Palm Beach Golf Center in particular, please contact Eric J. Troutman at firstname.lastname@example.org.