United States: Fifth Circuit Court Of Appeals Rules That Single Text Message Can Satisfy Article III Standing In TCPA Action

The U.S. Court of Appeals for the Fifth Circuit has ruled that a single marketing text message alleged to have violated the Telephone Consumer Protection Act of 1991 ("TCPA") was sufficient for a plaintiff to meet the Article III injury requirement for standing.

The court, in Cranor v. 5 Star Nutrition, ¹ looked to Congressional intent behind the statute and "the history of analogous common law actions," reversing the Texas district court that had dismissed the one-text complaint for lack of standing.

The Fifth Circuit's decision stands in stark contrast with two recent decisions by the U.S. Court of Appeals for the Eleventh Circuit that found no standing for claims based on a single communication: Salcedo v. Hanna² and Grigorian v. FCA US LLC. ³

The Fifth Circuit thus has now weighed in on the growing circuit split on TCPA standing now brewing between various federal circuits. Years before the Eleventh Circuit's Salcedo ruling, the U.S. Court of Appeals for the Ninth Circuit⁴ had opined that TCPA allegations stemming from a single marketing text could support Article III injury. Just before the Ninth Circuit's decision in Cranor, the U.S. Court of Appeals for the Third Circuit held that a single prerecorded call with no asserted injury-in-fact cannot support such standing to pursue TCPA claims.⁵

Given the deepening division on TCPA standing, and the direct contrast between two federal circuit courts' analysis regarding text messaging in particular, this article outlines the differing approaches of the Fifth and Eleventh Circuits to the text messaging injury requirements. Businesses must be aware of this deepening rift.

The Fifth Circuit's Decision in Cranor

In June 2018, plaintiff provided his cell phone number to a nutrition store following a purchase. The store sent plaintiff marketing text messages concerning additional products, and a dispute involving "unsolicited advertising text messages" followed, which the parties settled before reaching litigation. After entering into a pre-suit settlement agreement in November 2018, the store then sent another marketing text message, to which plaintiff again responded with the phrase "STOP" in order to opt out of future messages. The store sent no further text messages, but plaintiff filed a putative class action alleging a violation of the TCPA, arguing that the one text message sent after the parties' settlement agreement "trespassed upon and interfered with [plaintiff's] rights and interests in his cellular telephone and cellular telephone line, and intruded upon [his] seclusion."

The federal district court found that the plaintiff lacked standing and dismissed.⁶ The lower court noted that "text messages are sufficient forms of injury-in-fact in actions arising out of the [TCPA]," but the single text message at issue did not "constitute [an] injury in fact." On de novo review, the Fifth Circuit held that the injury-in-fact requirement was satisfied by "nuisance arising out of an unsolicited text advertisement." The Fifth Circuit looked first to "Congress's judgement," and then to "the history of analogous common law actions." The Fifth Circuit reversed and remanded for further proceedings.

The Fifth and Eleventh Circuits' Differing Interpretations of Injury and the TCPA

The Eleventh Circuit in Salcedo v. Hanna looked at Congress' judgment and the history of the TCPA in trying to determine the sufficiency of an alleged injury-in-fact for standing in a case involving the receipt of "a single unsolicited text message, sent in violation of a federal statute[.]" The Eleventh Circuit found that there could not be Article III standing for the receipt of a single text message.

In contrast, the Fifth Circuit opined that "the text of the TCPA shows Congress determined that nuisance arising out of unsolicited telemarketing constitutes a cognizable injury," and expressly rejected the Eleventh Circuit's holding in Salcedo v. Hanna. Thus, the Fifth Circuit's decision in Cranor exacerbates the split concerning whether receipt of a single text message creates sufficient standing for a plaintiff to assert a TCPA action

The Fifth and Eleventh Circuit decisions disagreed on two main points: (i) Congressional intent and Federal Communications Commission ("FCC") guidance as to text messaging, and (ii) whether allegations of a TCPA violation are sufficient to establish injury.

Congressional Intent and FCC Guidance as to Text Messaging

Given that smart phones and text messaging did not exist in 1991 when the TCPA was enacted, there is no direct discussion in the statute or the legislative history regarding any potential harm caused by a text message. However, in the opinion of the Fifth Circuit, the TCPA's statutory language did not only concern privacy violations of a residential consumer's home caused by unwanted telemarketing. The court stated that if the TCPA "only prohibited nuisances in the home, then it would make little sense to prohibit telemarking to mobile devices designed for use outside the home." In support, the Fifth Circuit took note of the TCPA's concern with "nuisance and invasion of privacy" in various "non-residential contexts," including emergency phone lines, hospital guest rooms, and paging services.

The Eleventh Circuit, in contrast, concluded in Salcedo that Congress's findings in regards to the 1991 statute reflected a concern for privacy inside the home, noting that "by nature of their portability and their ability to be silenced, cell phone calls may involve less of an intrusion than calls to a home phone." The Salcedo court further found that "[o]n text messaging . . . the judgment of Congress is ambivalent at best; its privacy and nuisance concerns about residential telemarketing are less clearly applicable to text messaging."

The Salcedo court noted that "[t]he TCPA is completely silent on the subject of unsolicited text messages," and pointed out that "it is only through the rulemaking authority of the Federal Communications Commission ("FCC") that the voice call provisions of the TCPA have been extended to text messages." Looking at the same record, the Eleventh Circuit took this to mean that Congress's silence was, "at best," a "tacit approval of that agency action." Further, the Eleventh Circuit cited to Congressional legislative findings for support of its contention that "the findings in the TCPA show a concern for privacy within the sanctity of the home that do not necessarily apply to text messaging." The Eleventh Circuit continued, asserting that "cell phones are often taken outside of the home and often have their ringers silenced, presenting less potential for nuisance and home intrusion."

In addition to disagreeing about Congressional intent, the two circuit courts also disagreed whether the FCC's interpretation of the TCPA to encompass text messaging needed deference. The Fifth Circuit noted that "Congress delegated authority to the FCC" to implement the TCPA and "to exempt commercial calls only where such exemptions 'will not adversely affect the privacy rights' the TCPA protects." The Fifth Circuit concluded that no part of the delegation language "limits the FCC to consider nuisances and privacy only in the home."

In contrast, the Eleventh Circuit held: "[a]ny possible deference to the FCC's interpretation of the TCPA – the source of its application to text messaging – is not obviously relevant where the Supreme Court has specifically instructed us to consider the judgment of Congress. And congressional silence is a poor basis for extending federal jurisdiction to new types of harm."

Whether Allegations of a TCPA Violation Are Sufficient to Establish Injury

The two circuit courts also took widely different views of whether an individual text message could cause actual harm required for Article III standing, when considering the common law of privacy. When analyzing the injury-in-fact requirement after looking to historical common law harms, the Eleventh Circuit in Salcedo stated that "[h]istory shows that [plaintiff's] allegation is precisely the kind of fleeting infraction upon personal property that tort law has resisted addressing." Considering the inconsequential annoyance of glancing down at a smartphone to see a text message, the Salcedo court found no actual injury had been asserted from receipt of a single text:

The Eleventh Circuit thus found a lack of standing for plaintiff Salcedo to proceed, but did note that its standing analysis was qualitative and not quantitative, and would require a close look at a plaintiff's allegations "in light of the statute, our precedent, history, and the judgment of Congress."

The Fifth Circuit reached the opposite conclusion on standing when assessing plaintiff Cranor's allegations at the motion to dismiss stage, finding that allegations of a TCPA violation stemming from a single text message had a "close relationship" to the common law harm of public nuisance. Cranor disagreed with the Eleventh Circuit's holding for two reasons:

• First, the Fifth Circuit opined that the Eleventh Circuit's view of common law trespass to chattels in Salcedo was "substantially narrower" than the scope of that action at common law. The Fifth Circuit looked to treatises, including the Restatement (Second) of Torts, and case law, and concluded that the Eleventh Circuit in Salcedo "mistakes the twentieth-century Restatement for the eighteenth-century common law."
• Second, the Fifth Circuit disagreed with the Eleventh Circuit's "focus on the substantiality of the harm in receiving a single text," and instead focused on whether "an alleged intangible harm has a close relationship to a harm that has traditionally" provided a basis for a claim.

Cranor found that plaintiff wanted to use the "telecommunications infrastructure without harassment," which it believed was similar "to someone who wants to use another piece of infrastructure like a road or bridge without confronting a malarial pond, obnoxious noises, or disgusting odors." The court further analogized that defendant in this case – a defendant that was highlighted in the factual history section to have sent a further text message after receiving and resolving complaints tied to earlier unwanted text messages – was similar to someone "who illegally emits pollution or diseases that damages members of the public."

Finally, the Fifth Circuit also noted that plaintiff had alleged he could not avoid "robodialed advertisements," and that the text message "deplet[ed] the battery life" on his cellular phone and used "minutes allocated to [him] by his cellular telephone service provider." The court found that these allegations were not only of an "unreasonable interference with a right common to the public," but were also allegations of "personal injuries" that separate him from the public at large. The Fifth Circuit thus rejected the Eleventh Circuit's analysis that the receipt of a single text message is an inconsequential annoyance by itself that does not rise to the level of actual harm

What Does It Mean?

By explicitly rejecting both the textual, legislative history, and common law analyses made by the Eleventh Circuit in Salcedo, the Fifth Circuit has demarcated the growing split between the two approaches to TCPA standing in the context of a single unwanted text message. Businesses that had breathed a sigh of relief after Salcedo held that a single text message was unlikely to support a TCPA class action claim in federal court may now find themselves in a different venue.

Moreover, given the starkly different approaches of these two courts, this debate over Article III standing could further develop into circuit split creating different standards, and different risk profiles, depending on where an action is filed. Absent an about-face by one of the circuits, we can expect that other circuits will start to line up on either side of the issue until the matter is resolved by statutory revision or the Supreme Court.

Footnotes

1 Cranor v. 5 Star Nutrition, No. 19-51173, 2021 WL 2133433, --- F.3d ---- (5th Cir. May 26, 2021).

2 Salcedo v. Hanna, 936 F.3d 1162, 1165 (11th Cir. 2019).

3 Grigorian v. FCA US LLC, No. 19-15026 (11th Cir. 2020).

4 Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037 (9th Cir. 2017).

5 Leyse v. Bank of America Nat'l Ass'n, No, 20-1666, 2021 WL 1997452, --- Fed. Appx. --- (3rd Cir. May 19, 2021) (rejecting plaintiff's contention that Article III standing does not require any allegations of harm beyond the statutory violations themselves).

6 Cranor v. 5 Star Nutrition, No. 1-19-CV-098-LY, 2019 WL 8331601 (W.D. Tex. Nov. 27, 2019).

Originally Published by The Computer & Internet Lawyer

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