District Court (Fla.) Says TCPA Plaintiff Has Standing and Case Is Not Mooted by Rule 68 Offer; But Stays Case Pending Outcome of Supreme Court’s Rulings in Spokeo and Campbell-Ewald

In Boise v. ACE USA, Inc., 2015 WL 4077433, at *3-4 (S.D.Fla.,2015), Judge Cooke found that a TCPA Plaintiff had Article III standing, and that his case was not mooted by a Rule 68 offer.    The District Court found that 11th Circuit precedent bound it on the question of Article III standing.

Palm Beach Golf Center–Boca, Inc. v. Sarris, 781 F.3d 1245 (11th Cir.2015) forecloses Defendant’s argument that Plaintiff lacks Article III standing to bring his claims. In Palm, the Eleventh Circuit determined that a business suffered a concrete injury sufficient for Article III standing when it received an unsolicited fax advertisement in violation of the TCPA. Id. There, the plaintiff could prove only that there were incoming fax transmissions on its business line, but not that faxes actually printed. Id. at 1249. On appeal, the Eleventh Circuit explained that “where a statute confers new legal rights on a person, that person will have Article III standing to sue where the facts establish a concrete, particularized, and personal injury to that person as a result of the violation of the newly created legal rights.” Id. at 1251 (emphasis added). According to the Eleventh Circuit, the TCPA creates “such a cognizable right.” Id. at 1252.   Defendant attempts to distinguish Palm, arguing the plaintiff there suffered a concrete injury because the unsolicited fax interfered with its legitimate business enterprise, whereas Plaintiff here alleges no such injurious interference. (ECF No. 29, pp. 6–7). This argument misses the mark. First, in referring to the legislative history of the TCPA, the Eleventh Circuit explained what Congress saw as the intrinsic harms of unsolicited faxes: “[i]t is clear from the legislative history of the statute that the TCPA’s prohibition against sending unsolicited fax advertisements was intended to protect citizens from the loss of the use of their fax machines during the transmission of fax data.” Palm, 781 F.3d at 1252. But the plaintiff in Palm may not have actually lost incoming business messages (there is no way to tell since the line was occupied). What mattered was only that its line was occupied as a result of the defendant’s conduct, which violated the TCPA. Id. at 1251.  Congress saw intrinsic harms in unsolicited calls, too, not just in unsolicited faxes:  “AUTOMACT DIALING SYSTEMS [:] … Once a phone connection is made, automatic dialing systems can ‘seize’ a recipient’s telephone line and not release it until the prerecorded message is played, even when the called party hangs up. This capability makes these systems not only intrusive, but, in an emergency, potentially dangerous as well.” H.R. REP. 102–317, at 10 (1991). Thus, Mr. Boise does not need to “allege that he wanted to use his phone for another purpose but could not do so.” (ECF No. 35, p. 3). To establish standing, Mr. Boise needs to allege only that his line was occupied by an unsolicited call in violation of the TCPA. The statute presumes that the violation was “intrusive” and “potentially dangerous,” and accordingly includes a private right of action to rectify the harm. 47 U.S.C. § 227(b)(3); H.R. REP. 102–317 at 10 (1991).  Nevertheless, Defendant attempts to circumvent the baseline proposition of Palm, which is that an invasion of any statutory right established by the TCPA is itself a concrete harm. 781 F.3d at 1285. Whether there was an unsolicited fax or a call, to a business or to an individual, does not affect the TCPA standing analysis, so long as the statute explicitly prohibits the conduct. Id.; see also Soulliere v. Cent. Florida Inv., Inc., No. 8:13–CV–2860–T–27AEP, 2015 WL 1311046, at *7 (M.D.Fla. Mar. 24, 2015) (noting that “a number of district courts have held that a cell phone user has standing to assert a cause of action under the TCPA”). Here, Plaintiff alleges conduct amounting to a violation of the TCPA and therefore has Article III standing to pursue his claim. (Compl.¶¶ 18–37). This Court is currently bound by the Eleventh Circuit’s ruling in Palm on this issue.

The District Court also found that the Plaintiff’s case was not mooted by a Rule 68 offer.

The Eleventh Circuit recently held that a class action plaintiff’s “individual claim is not mooted by an unaccepted Rule 68 offer of judgment.” Stein v. Buccaneers Ltd. P’Ship, 772 F.3d 698, 709 (11th Cir.2014). Further, “a proffer that moots a named plaintiff’s individual claim does not moot a class … even if the proffer comes before the plaintiff has moved to certify a class.” Id. Defendant acknowledges that the Stein holding contradicts its position, but argues that Stein cannot be squared with the recent United States Supreme Court case, Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013). (ECF No. 29, p. 10).  In Stein, however, the Eleventh Circuit specifically acknowledged Symczyk, and explained how the two decisions coexist: “as the Supreme Court repeatedly emphasized in Symczyk itself, FLSA actions and class actions are different. Rule 23 gives a class representative a markedly different stature from an FLSA plaintiff.” Stein, 772 F.3d at 709; see also Collado v. J. & G. Transp., Inc., No. 14–80467–CIV, 2014 WL 6896146, at *2 (S.D.Fla. Dec. 5, 2014) (“The Supreme Court has made it clear that FLSA collective action suits are different than Rule 23 class actions on this point—because the FLSA does not create standing to sue based solely on the right to vindicate the grievances of a broader class.”). Here, Plaintiff seeks to represent a Rule 23 class, not an FLSA collective group. Thus Stein, not Symczyk, controls this case. Accordingly, Defendant’s rejected offer of judgment does not render Plaintiff’s individual claims moot. Id.

But, the District Court stayed the case, pending the outcome of two Supreme Court decisions.

Defendant alternatively moves to stay this action pending the resolution of two cases. The first is Gomez v. Campbell–Ewald Co., 768 F.3d 871 (9th Cir.2014) cert. granted, No. 14–857, 2015 WL 246885 (U.S. May 18, 2015). There, the Supreme Court will address a mootness issue similar to the one presented here. Like this case, Campbell–Ewald is a TCPA putative class action in which the defendant offered the named plaintiff more than full satisfaction of his individual claims. Id. The Ninth Circuit, like the Eleventh, took the position that “an unaccepted Rule 68 offer that would fully satisfy a plaintiff’s claim is insufficient to render the claim moot.” Id.; see also Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 950 (9th Cir.2013).  The second case is Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir.2014) cert. granted, 135 S.Ct. 1892 (2015), in which the Supreme Court will decide if a plaintiff has Article III standing based solely on a “bare statutory violation.” In Spokeo, the plaintiff alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., not the TCPA. However, as Defendant points out, the ruling in Spokeo may apply to the Court’s subject matter jurisdiction over statutory violations generally, including violations of the TCPA. (ECF No. 29, p. 8).  Either of these two cases may conclusively determine whether this Court has the subject matter jurisdiction to hear Plaintiff’s claims at all. Therefore, as Defendant notes, the significant “time, expense, and resources required to litigate this case on the merits will be for naught if the Supreme Court rules either that plaintiffs like Boise lack Article III standing or that Boise’s claims are moot (or both).” (Id.). This Court may exercise its discretion to avoid such unnecessary expenditures of time and resources by ordering a stay of proceedings. See, e.g., Clinton v.. Jones, 520 U.S. 681, 706 (1997); see also Ortega Trujillo v. Conover & Co. Communications, Inc., 221 F.3d 1262, 1264 (11th Cir.2000).  Plaintiff’s opposition to the stay is not without merit. The Eleventh Circuit’s decisions in Stein and Palm are, for the moment, binding precedent upon this Court, and Plaintiff has an interest in bringing his cause of action expeditiously. Further, Defendant has not established a substantial likelihood that it will prevail on the merits. However, other factors weigh heavily in favor of a stay pending the two Supreme Court decisions. See Guirola–Beeche v. U.S. Dep’t of Justice, 662 F.Supp. 1414, 1417–18 (S.D.Fla.1987). First, Plaintiff will not be unduly prejudiced or harmed by a stay of proceedings, which only stands to delay Plaintiff’s potential recovery for a period likely less than twelve months. Conversely, without a stay, Defendant will be forced to endure onerous discovery and significant expenses, which may be needlessly incurred if the Supreme Court rules favorably for the Defendant in either one of the two cases. It is also relevant that both cases will deal with threshold issues of jurisdiction and whether this case may proceed at all. See Spokeo, Inc. v. Robins 135 S.Ct. 1892 (2015); Campbell–Ewald Co. v. Gomez, 135 S.Ct. 2311 (2015). Ultimately, both parties could be harmed by the burden of potentially superfluous litigation.  It is also important that the length of the stay is neither indefinite nor immoderate. CTI–Container, 685 F.2d at 1288. The Supreme Court has already granted certiorari on the two relevant cases and will hear oral argument for them in its upcoming fall Term, which means that a decision is imminent within a year. Finally, there is a public interest in judicial economy and efficiency, which will be promoted by a stay of these proceedings. See, e.g., Moorman v. Unumprovident Corp., No. 1:04–CV–2075–BBM, 2005 WL 6074572, at *11 (N.D.Ga. Feb. 17, 2005) aff’d, 464 F.3d 1260 (11th Cir.2006). A moderate delay here will free up judicial resources without any unfair prejudice or burden on the Plaintiff.