Consumer Finance Litigation

Following the Supreme Court's ruling in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. May 16, 2016), it is clear that "Article III standing requires a concrete injury even in the context of a statutory violation," such that a plaintiff cannot "allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III." Id. at 1549. Yet, the Court did not go so far as to rule that "the risk of real harm cannot satisfy the requirement of concreteness," and instead recognized that "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact," adding that "a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified." See id. (citations omitted). Since Spokeo, federal courts have reached varying conclusions regarding the "circumstances" under which the violation of a statute constitutes an "injury in fact," but for cases involving claims under the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA"), most courts have held that "a violation of the TCPA is a concrete injury." See Rogers v. Capital One Bank (USA), N.A., No. 1:15-cv-4016, 2016 WL 3162592, at *2 (N.D. Ga. June 7, 2016); see also, e.g., Booth v. Appstack, Inc., No. 2:13-cv-1533, 2016 WL 3030256, at *5 (W.D. Wash. May 25, 2016) (finding in TCPA action that "Plaintiffs' allegations demonstrate 'concrete injury' as elucidated in Spokeo"). In Stoops v. Wells Fargo Bank, N.A., however, the United States District Court for the Western District of Pennsylvania distinguished such decisions, and held in what the court described as a "unique" case - involving a plaintiff who admitted to filing TCPA actions "as a business" - that the plaintiff simply "ha[d] not suffered an injury-in-fact and therefore lack[ed] constitutional standing to assert her [TCPA] claim against Defendant." See No. 3:15-cv-83, 2016 WL 3566266, at *5, 9-13 (W.D. Pa. June 24, 2016).

As the district court in Stoops recognized, the facts underlying the court's decision are indeed unique. In particular, the plaintiff in the case "ha[d] purchased at least thirty-five cell phones and cell phone numbers with prepaid minutes for the purpose of filing lawsuits under the [TCPA]." Id. at *1. It was, she testified, her "business" to "su[e] offenders of the TCPA." Id. at *10. In fact, despite living in Pennsylvania, the plaintiff "selected Florida zip codes" when activating the cell phones, to which she explained by testifying that "'there is a depression in Florida,'" and thus "'people would be usually defaulting on their loans or their credit cards.'" See id. at *1. Apparently she was correct, as by the time of the court's decision in Stoops, the plaintiff had already filed "at least eleven TCPA cases in th[e Western District of Pennsylvania]" alone, and "ha[d] sent at least twenty pre-litigation demand letters, although she '[did not] know' [exactly] how many." See id. Plaintiff's lawsuit against Wells Fargo involved two of her approximately thirty-five cell phone numbers, and a total of eighty-five alleged phone calls. See id. at *2.

In moving for summary judgment against the plaintiff, Wells Fargo argued, among other things, that "[the p]laintiff lacks Article III standing to assert her claim because she is not a member of the class that the TCPA was designed to protect and did not suffer the type of harm that the TCPA was designed to prevent." See id. at *3. The district court agreed. Specifically, the court explained that "[u]nder Article III, constitutional standing requires a plaintiff to show that: (1) he or she suffered an injury-in-fact, that is 'concrete and particularized' and 'actual or imminent,' and not merely 'conjectural or hypothetical;' (2) the defendant's complained of conduct caused that injury; and (3) it is likely, 'as opposed to merely speculative,' that a favorable decision by the court will redress the injury." See id. at *8 (quoting Winer Family Trust v. Queen, 503 F.3d 319, 325 (3d Cir. 2007)). Regarding the first prerequisite, the district court reiterated that "'[f]or an injury to be particularized, it must affect the plaintiff in a personal and individual way,'" and to be concrete, the injury must be "'real' and 'not abstract.'" See id. (quoting Spokeo, 136 S. Ct. at 1548, 1556. Notably, the court emphasized that following the Supreme Court's decision in Spokeo, it is "clear that 'Article III standing requires a concrete injury even in the context of a statutory violation.'" See id. (quoting Spokeo, 136 S. Ct. at 1549).

In her response to Wells Fargo's motion for summary judgment, the plaintiff argued that Wells Fargo had violated a "legally protected interest," namely "her privacy interests when she received the calls," as well as "her economic interests because she purchased airtime minutes for her cell phones." See id. at *9. The district court rejected both arguments. First, the court agreed that Wells Fargo did not violate the plaintiff's privacy interests "because Plaintiff has admitted that she files TCPA actions as a business," and thus Wells Fargo "[did] not adversely affect the privacy rights that [the TCPA] is intended to protect." See id. at *9-11 ("Because Plaintiff has admitted that her only purpose in using her cell phones is to file TCPA lawsuits, the calls are not "'a nuisance and an invasion of privacy.'" (quoting In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7980 (2015. Second, and for these same reasons, the district court also held that Wells Fargo did not violate the plaintiff's economic interests, repeating that "[b]ecause Plaintiff has admitted that her only purpose in purchasing her cell phones and minutes is to receive more calls, thus enabling her to file TCPA lawsuits, she has not suffered an economic injury." Id. at *12 (citing Leyse v. Bank of Am. Nat'l Ass'n, 804 F.3d 316, 323 (3d Cir. 2015)). Accordingly, the district court ruled that the plaintiff had failed to establish an injury-in-fact, and thus lacked Article III standing. Id. at *13.

Finally, the district court also found that "[e]ven if, assuming arguendo, Plaintiff had suffered an injury-in-fact, Plaintiff would still lack standing because she does not have prudential standing." Id. In particular, the court determined that the plaintiff could not satisfy the third requirement for prudential standing, which requires that "'a litigant demonstrate that her interests are arguably within the zone of interests intended to be protected by the statute, rule or constitutional provision on which the claim is based.'" Id. (quoting UPS Worldwide Forwarding v. United States Postal Serv., 66 F.3d 621, 626 (3d Cir. 1995)). Indeed, the district court emphasized that the "Plaintiff's interests, which include purchasing cell phones with the hope of receiving calls from creditors for the sole purpose of collecting statutory damages, are not 'among the sorts of interests [the TCPA was] specifically designed to protect,'" adding that "it is unfathomable that Congress considered a consumer who files TCPA actions as a business when it enacted the TCPA as a result of its 'outrage over the proliferation of prerecorded telemarketing calls to private residences, which consumers regarded as an intrusive invasion of privacy and a nuisance.'" See id. at *15 (citations omitted). On this alternative basis, the court held that the plaintiff lacked standing to assert her TCPA claims, and therefore granted summary judgment in Wells Fargo's favor. Id. at *16.