TCPA: California District Court Rules that Monetary Damages Not Required for Standing
On July 20, 2012, the U.S. District Court for the Southern District of California, in Smith v. Microsoft Corp., Case No. 11-CV-1958, held that the Telephone Consumer Protection Act (TCPA) does not require that a consumer incur any actual monetary damages caused by receipt of a text message in order to maintain standing under the TCPA to bring a class action lawsuit. In Smith, the plaintiff brought a putative class action against Microsoft for sending unauthorized text messages promoting Microsoft’s next Xbox video game console to cellular telephones, in alleged violation of the TCPA. Microsoft supposedly transmitted text messages to thousands of consumers’ cellular telephones without prior express consent.
Microsoft moved to dismiss the putative class action for lack of standing because the plaintiff had not been charged for receiving the text message. At the heart of the matter was the question of whether the TCPA imposes a requirement that the injured party be charged for the call.
The district court, in denying Microsoft’s motion, held that “[t]he TCPA, by its unambiguous terms, does not limit protection to instances in which a plaintiff is charged individually, or even incrementally, for each text message. The legislative history and purpose of the TCPA overwhelmingly support this conclusion.” The inconvenience of receiving an unwanted text message, therefore, was held sufficient to give the plaintiff maintain a class action.
Nuts and Bolts
The current wave of TCPA decisions in wake of the Supreme Court decision in Mims v. Arrow Financial Services is establishing the parameters of liability. While the fact that the TCPA applies to text messages is not news, the fact that a non-injury violation can sustain a class action is another good reason for businesses that use automated dialing technology to pay close attention to the TCPA. It should be noted that federal courts around the country have disagreed with the reasoning of the Smith decision on the standing issue. For example, last year another California federal court in Robins v. Spokeo, Inc., No. CV10-05306 ODW (C.D. Cal. Sept. 19, 2011) dismissed a plaintiff’s claim for statutory damages under the Fair Credit Reporting Act because the plaintiff failed to plead any actual injury. See id., Order Correcting Prior Ruling and Finding Moot Motion for Certification, ECF No. 66 (“Mere violation of the Fair Credit Reporting Act does not confer Article III standing . . . where no injury in fact is properly pled.”).
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