Leyse v. Bank of America National Ass'n , 804 F.3d 316 ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 14-4073
MARK LEYSE,
Individually and on behalf of all others similarly situated,
Appellant
v.
BANK OF AMERICA NATIONAL ASSOCIATION
_____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 2-11-cv-07128)
District Judge: Honorable Susan D. Wigenton
_____________
Argued: July 7, 2015
Before: FUENTES, SLOVITER, and ROTH, Circuit Judges
(Opinion Filed: October 14, 2015 )
Todd C. Bank ARGUED
119-40 Union Turnpike
Fourth Floor
Kew Gardens, NY 11415
Attorney for Appellant
Joseph R. Palmore ARGUED
Morrison & Foerster LLP
2000 Pennsylvania Avenue N.W.
Suite 6000
Washington, DC 20006
Mark P. Ladner
David J. Fioccola
Adam J. Hunt
Morrison & Foerster LLP
250 West 55 Street
New York, NY 10019-9601
Attorneys for Appellee Bank of America National Association
OPINION OF THE COURT
FUENTES, Circuit Judge.
Mark Leyse brought an action under the Telephone
Consumer Protection Act after receiving a prerecorded
telemarketing call on the landline he shares with his
2
roommate. Leyse was not the intended recipient of the call—
his roommate was. For this reason, the District Court
dismissed the complaint for lack of statutory standing. We
find that it was error for the District Court to consider the
motion to dismiss, which raised an argument that could have
been raised in an earlier motion to dismiss. As the procedural
error was harmless, however, we reach the merits and
conclude that Leyse has statutory standing. His status as a
regular user of the phone line and occupant of the residence
that was called brings him within the language of the Act and
the zone of interests it protects.
I. Background
A telemarketer seeking to advertise credit cards for
Bank of America called the phone shared by Mark Leyse and
his roommate, Genevieve Dutriaux. It is undisputed that
Dutriaux was the telephone subscriber and intended recipient
of the call, as the number was associated with her name in the
telemarketing company’s records. When the phone was
answered—the complaint does not specify whether either
roommate or the answering machine picked up—a
prerecorded message played.
This message allegedly violated the advertising
restrictions of the Telephone Consumer Protection Act of
1991, 47 U.S.C. § 227, as well as its associated regulations.
The Act prohibits any person from, among other things,
“initiat[ing] any telephone call to any residential telephone
line using an artificial or prerecorded voice to deliver a
message without the prior express consent of the called party,
unless the call is initiated for emergency purposes or is
exempted by rule or order by the [Federal Communications]
3
Commission.” Id. § 227(b)(1)(B).1 As a result of the
prerecorded message, a lawyer representing Dutriaux and
Leyse filed several class-action lawsuits against Bank of
America in multiple districts. The action on appeal before us
is from the District of New Jersey. Leyse is the only named
plaintiff.
Bank of America filed a Rule 12(b)(6) motion to
dismiss on grounds of collateral estoppel, arguing that one of
the prior lawsuits had been decided against Leyse in a manner
that precluded further litigation. The District Court agreed
and further found that Leyse’s complaint was time-barred.
On appeal, a panel of this Court initially affirmed, then
changed its mind on panel rehearing. The panel found that
the statute of limitations was tolled, and that collateral
estoppel was inapplicable because it was unclear whether the
dispositive issue here was actually adjudicated in the prior
lawsuit. In vacating the dismissal, the panel noted that on
remand, Bank of America might be able to argue that Leyse
lacked statutory standing as the unintended recipient of the
automated call.
Bank of America did just that. It filed a second Rule
12(b)(6) motion to dismiss, arguing that Leyse was not the
“called party” identified in § 227(b)(1)(B) and therefore did
not have statutory standing to bring suit. Leyse responded
that the motion was procedurally improper under Rule 12, as
the Bank could have raised its statutory standing argument in
1
Although it is not relevant to this appeal, Bank of America’s
position is that the call was an “abandoned” call of the sort
permitted by 47 C.F.R. § 64.1200(a)(7).
4
its previous motion but chose not to. He also contended
another part of the statute, § 227(b)(3), gives a private right of
action to any “person or entity” injured by the violation—not
merely the “called party.”
The District Court sided with Bank of America on both
questions and dismissed Leyse’s complaint. It reasoned that
Leyse was not the “called party,” which it defined as the
intended recipient of the call, and therefore did not fall within
the class of plaintiffs authorized to sue under the Telephone
Consumer Protection Act. Leyse appealed.2
II. Discussion
A. Rule 12 Restrictions on Successive Motions to
Dismiss
Leyse’s first argument on appeal is that the District
Court erred in considering Bank of America’s second motion
to dismiss, which he contends was filed in violation of the
2
Although our Court had previously held otherwise, “federal
and state courts have concurrent jurisdiction over private suits
arising under the [Telephone Consumer Protection Act].”
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 745 (2012).
The District Court therefore had federal-question jurisdiction
under 28 U.S.C. § 1331. We have jurisdiction to hear the
appeal under 28 U.S.C. § 1291. We exercise plenary review
over a district court’s grant of a Rule 12(b)(6) motion and
over issues of statutory interpretation. Gager v. Dell Fin.
Servs., LLC, 727 F.3d 265, 268 (3d Cir. 2013).
5
Federal Rules of Civil Procedure. His claim of error is valid,
but it does not warrant reversal.
The Rules impose restrictions on the filing of
successive motions to dismiss: “Except as provided in Rule
12(h)(2) or (3), a party that makes a motion under [Rule 12]
must not make another motion under [Rule 12] raising a
defense or objection that was available to the party but
omitted from its earlier motion.” Fed. R. Civ. P. 12(g)(2).
This “consolidation rule” is intended “to eliminate
unnecessary delay at the pleading stage” by encouraging “the
presentation of an omnibus pre-answer motion in which the
defendant advances every available Rule 12 defense”
simultaneously rather than “interposing these defenses and
objections in piecemeal fashion.” Charles Alan Wright &
Arthur R. Miller, 5C Fed. Prac. & Proc. Civ. § 1384 (3d ed.
2014).
Bank of America’s first motion to dismiss, which
asserted collateral estoppel, was expressly brought under Rule
12. See also Metro. Edison Co. v. Pa. Pub. Util. Comm’n,
767 F.3d 335, 350 n.19 (3d Cir. 2014) (noting that collateral
estoppel is a permissible basis for a Rule 12(b)(6) motion to
dismiss for failure to state a claim). As Bank of America
concedes, it could have argued in this motion that Leyse
lacked statutory standing, but it did not. Thus, unless one of
the exceptions specified in Rule 12(g)(2) applies—i.e., those
established in Rule 12(h)(2) and (3)—the Bank’s subsequent
Rule 12 motion to dismiss on statutory standing grounds was
procedurally barred.
The second motion to dismiss does not qualify for the
Rule 12(h)(3) exception, which exempts only motions to
dismiss for lack of subject-matter jurisdiction. Unlike Article
6
III standing, statutory standing is not jurisdictional. See
Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S.
Ct. 1377, 1388 & n.4 (2014). Statutory standing goes to
whether Congress has accorded a particular plaintiff the right
to sue under a statute, but it does not limit the power of the
court to adjudicate the case. See id. As a result, “[a]
dismissal for lack of statutory standing is effectively the same
as a dismissal for failure to state a claim,” and a motion to
dismiss on this ground is brought pursuant to Rule 12(b)(6),
rather than Rule 12(b)(1). Baldwin v. Univ. of Pittsburgh
Med. Ctr., 636 F.3d 69, 73-74 (3d Cir. 2011); see also
Sullivan v. DB Invs., Inc., 667 F.3d 273, 307 (3d Cir. 2011).3
The motion does not fall within the Rule 12(h)(2)
exception either. Under this provision, a successive motion to
dismiss for “[f]ailure to state a claim . . . may be raised (A) in
3
We have, in the past, suggested that “statutory standing is an
issue of subject matter jurisdiction.” Graden v. Conexant Sys.
Inc., 496 F.3d 291, 294 (3d Cir. 2007). But we have since
retreated from this characterization, and the Supreme Court
has made clear that it is incorrect. Indeed, our description of
statutory standing in Graden showed that it was non-
jurisdictional. See id. at 295 (“Though all are termed
‘standing,’ the differences between statutory, constitutional,
and prudential standing are important. Constitutional and
prudential standing are about, respectively, the constitutional
power of a federal court to resolve a dispute and the wisdom
of so doing. Statutory standing is simply statutory
interpretation: the question it asks is whether Congress has
accorded this injured plaintiff the right to sue the defendant to
redress his injury.” (citations omitted)).
7
any pleading allowed or ordered under Rule 7(a); (B) by a
motion under Rule 12(c); or (C) at trial.” Fed. R. Civ. P.
12(h)(2). Bank of America’s second motion to dismiss was
plainly neither a Rule 7(a) pleading nor a motion raised at
trial. Nor was it a Rule 12(c) motion for judgment on the
pleadings, which may be filed only “[a]fter the pleadings are
closed.” Fed. R. Civ. P. 12(c). Thus, because no exception to
Rule 12(g)(2) covers Bank of America’s successive motion, it
was improper to consider that motion.
The District Court’s conclusion to the contrary was
error. Following other district court decisions, the District
Court held that it could consider Bank of America’s second
motion to dismiss because the previous motion had not
“examine[d] the substance” of Leyse’s claims but rather
challenged it on collateral estoppel grounds. (App. 8 n.3
(quoting Walzer v. Muriel Siebert & Co., Civ. No. 04-5672
(DRD), 2010 WL 4366197, at *10 (D.N.J. Oct. 28, 2010),
aff’d sub nom. Walzer v. Muriel Siebert & Co., 447 F. App’x
377 (3d Cir. 2011)).) The procedural bar of Rule 12(g)(2),
however, covers all motions to dismiss for failure to state a
claim, regardless of the grounds asserted. The District Court
provided no basis for concluding otherwise, and we see none.
Indeed, Bank of America easily could have included its
statutory standing argument in the same motion as its
collateral estoppel argument, which is the sort of
consolidation that Rule 12(g)(2) is meant to encourage. If it
had done so, it is likely that one of the two appeals could have
been avoided.4
4
Bank of America seems to suggest that when the case was
previously on appeal, the panel expressly gave it permission
8
We also recognize that the Court of Appeals for the
Seventh Circuit would find no error on the facts before us. In
Ennenga v. Starns, the defendants filed two pre-answer
motions to dismiss under Rule 12(b)(6), only the second of
which argued that the plaintiffs’ claims were untimely. In
finding the second motion proper, the Seventh Circuit held
that “Rule 12(g)(2) does not prohibit a new Rule 12(b)(6)
argument from being raised in a successive motion” because
“Rule 12(h)(2) specifically excepts failure-to-state-a-claim
defenses from the Rule 12(g) consolidation requirement.”
677 F.3d 766, 773 (7th Cir. 2012). We respectfully disagree.
Like the Tenth Circuit, we find that Ennenga’s logic “fails to
address the language from Rule 12(h)(2) that arguably limits
a party to presenting [successive failure-to-state-a-claim]
arguments in a pleading, a motion for judgment on the
pleadings, or at trial.” See Albers v. Bd. of Cnty. Comm’rs of
Jefferson Cnty., Colo., 771 F.3d 697, 703 (10th Cir. 2014).
to raise the issue of statutory standing in a subsequent motion.
See Leyse v. Bank of Am., Nat. Ass’n, 538 F. App’x 156, 162
(3d Cir. 2013). The panel did not address Rule 12(g)(2),
however, and it did not specify that the Bank was permitted to
file another pre-answer motion, as opposed to the post-answer
Rule 12(c) motion contemplated by Rule 12(h)(2). The
panel’s passing comment certainly does not constitute “law of
the case.” See, e.g., Pub. Interest Research Grp. of New
Jersey, Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116
(3d Cir. 1997) (“The law of the case doctrine directs courts to
refrain from re-deciding issues that were resolved earlier in
the litigation. . . . [The] doctrine does not limit a federal
court's power; rather, it directs its exercise of discretion.”).
9
The Sixth Circuit would likely agree with us as well. See
English v. Dyke, 23 F.3d 1086, 1090-91 (6th Cir. 1994).
Despite the District Court’s error, it does not follow
that we must vacate its decision. When considering an
appeal, we must give judgment “without regard to errors or
defects which do not affect the substantial rights of the
parties.” 28 U.S.C. § 2111. A district court’s decision to
consider a successive Rule 12(b)(6) motion to dismiss is
usually harmless, even if it technically violates Rule 12(g)(2).
So long as the district court accepts all of the allegations in
the complaint as true, the result is the same as if the defendant
had filed an answer admitting these allegations and then filed
a Rule 12(c) motion for judgment on the pleadings, which
Rule 12(h)(2)(B) expressly permits.
Requiring these additional steps would serve little
purpose here. If we vacate and remand without ruling on the
merits, Bank of America will inevitably raise its arguments in
a post-answer Rule 12(c) motion, and the case will come up
on appeal a third time. Creating such delay seems contrary to
the purposes of Rule 12(g)(2).5 We note that in so holding,
5
We emphasize that district courts should enforce Rule
12(g)(2) even if their failure to do so is not a ground for
reversal. Although some courts and commentators believe
that allowing successive pre-answer motions to dismiss
avoids delay, this seems to us like short-term thinking. In any
given case, requiring a defendant to file an answer and then a
Rule 12(c) motion will take more time than allowing it to file
a successive pre-answer Rule 12(b)(6) motion. But over the
long term, stringent application of Rule 12(g)(2) may
10
we are in agreement with the Tenth Circuit, which declined to
reverse on similar facts because the asserted Rule 12(g)(2)
error was harmless. See Albers, 771 F.3d at 703-04. We
therefore proceed to the merits.
B. Statutory Standing under the Telephone Consumer
Protection Act
1. Background
The Telephone Consumer Protection Act was intended
to combat, among other things, the proliferation of automated
telemarketing calls (known as “robocalls”) to private
residences, which Congress viewed as a nuisance and an
invasion of privacy. See Mims, 132 S. Ct. at 745. To this
end, the Act makes it unlawful “to initiate any telephone call
to any residential telephone line using an artificial or
prerecorded voice to deliver a message without the prior
express consent of the called party, unless the call is initiated
for emergency purposes or is exempted by rule or order by
the Commission.” 47 U.S.C. § 227(b)(1)(B). In the same
subsection of the Act, the paragraph captioned “Private right
of action” provides that a “person or entity” may bring an
motivate defendants to consolidate their arguments in a single
pre-answer motion, especially if they know that the district
court will not stay discovery while a post-answer Rule 12(c)
motion is pending. Granted, the logic of deterrence could
also support enforcing Rule 12(g)(2) on appeal. The length of
the appellate process, however, increases the costs of
enforcement and suggests that the balance should be struck
differently.
11
action to enjoin violations of the statute and recover actual
damages or $500 in statutory damages per violation. Id. §
227(b)(3).
District courts throughout the country have split over
the question of who is entitled to sue under the statute, and
they fall into various camps. Some district court cases hold
that statutory standing is limited to the “called party,” which
they define as the “intended recipient” of the call. 6 Others
indicate that statutory standing is limited to the “called party”
but define that term as the “subscriber” or “regular user” of
the phone.7 Several cases do not invoke the statutory term
“called party” but nevertheless find it prudent to limit
statutory standing to the “subscriber” or “primary user.”8
6
Cellco P’ship v. Wilcrest Health Care Mgmt. Inc., No.
CIV.A. 09-3534 MLC, 2012 WL 1638056, at *7 (D.N.J. May
8, 2012); Cellco P’ship v. Dealers Warranty, LLC, No.
CIV.A. 09-1814 FLW, 2010 WL 3946713, at *9-10 (D.N.J.
Oct. 5, 2010); Leyse v. Bank of Am., Nat. Ass’n, No. 09 CIV.
7654 (JGK), 2010 WL 2382400, at *3-6 (S.D.N.Y. June 14,
2010).
7
Soulliere v. Cent. Florida Inv., Inc., No. 8:13-CV-2860-T-
27AEP, 2015 WL 1311046, at *5 (M.D. Fla. Mar. 24, 2015);
Pacleb v. Cops Monitoring, No. 2:14-CV-01366-CAS, 2014
WL 3101426, at *2-3 (C.D. Cal. July 7, 2014); Fini v. Dish
Network L.L.C., 955 F. Supp. 2d 1288, 1296 & n.6 (M.D. Fla.
2013).
8
Olney v. Progressive Cas. Ins. Co., 993 F. Supp. 2d 1220,
1225 (S.D. Cal. 2014); Cellco P’ship v. Plaza Resorts Inc.,
No. 12-81238-CIV, 2013 WL 5436553, at *5 (S.D. Fla. Sept.
12
And many cases reject the “called party” approach on the
ground that the Act authorizes any “person or entity” to sue.9
The District Court here falls into the first camp. It
dismissed Leyse’s claim on the ground that, as the
“unintended and incidental recipient” of a call directed to his
roommate, he was not the “called party” and therefore had no
right to sue under the Act. (App. 13.) We, however, do not
27, 2013); Gutierrez v. Barclays Grp., No. 10CV1012 DMS
BGS, 2011 WL 579238, at *5 (S.D. Cal. Feb. 9, 2011).
9
Gesten v. Stewart Law Grp., LLC, 67 F. Supp. 3d 1356,
1359 (S.D. Fla. 2014); Meyer v. Diversified Consultants, Inc.,
No. 3:14-CV-393-J-34JBT, 2014 WL 5471114, at *2 (M.D.
Fla. Oct. 29, 2014); Moore v. Dish Network L.L.C., 57 F.
Supp. 3d 639, 648-51 (N.D.W. Va. 2014); Manno v.
Healthcare Revenue Recovery Grp., LLC, 289 F.R.D. 674,
682 (S.D. Fla. 2013); Swope v. Credit Mgmt., LP, No.
4:12CV832 CDP, 2013 WL 607830, at *2-3 (E.D. Mo. Feb.
19, 2013); Page v. Regions Bank, 917 F. Supp. 2d 1214,
1216-18 (N.D. Ala. 2012); Harris v. World Fin. Network Nat.
Bank, 867 F. Supp. 2d 888, 894 (E.D. Mich. 2012); Kane v.
Nat’l Action Fin. Servs., Inc., No. 11-CV-11505, 2011 WL
6018403, at *7 (E.D. Mich. Nov. 7, 2011); D.G. v. Diversified
Adjustment Serv., Inc., No. 11 C 2062, 2011 WL 5506078, at
*2 (N.D. Ill. Oct. 18, 2011); Tang v. Med. Recovery
Specialists, LLC, No. 11 C 2109, 2011 WL 6019221, at *2
(N.D. Ill. July 7, 2011); D.G. ex rel. Tang v. William W.
Siegel & Associates, Attorneys at Law, LLC, 791 F. Supp. 2d
622, 624-25 (N.D. Ill. 2011); Anderson v. AFNI, Inc., No.
CIV.A. 10-4064, 2011 WL 1808779, at *7-8 (E.D. Pa. May
11, 2011).
13
agree that the caller’s intent circumscribes standing, and we
find that Leyse falls within the class of plaintiffs Congress
has authorized to sue.
2. The zone of interests protected by the Act
The paragraph that establishes the “[p]rivate right of
action” for violations of the Act’s robocall provisions permits
any “person or entity” to file a lawsuit. 47 U.S.C.
§ 227(b)(3). The text of this provision does not limit the
universe of plaintiffs who may file suit in federal court.10
Even if this were all the Act said (which it is not),
Congress’s broad grant of statutory standing would not enable
every “person or entity” to sue under the Act. Article III of
the Constitution imposes its own standing requirements, and
only certain plaintiffs will have suffered the particularized
injury required to maintain an action in federal court for a
statutory violation. See Raines v. Byrd, 521 U.S. 811, 818-20
& n.3 (1997); Doe v. Nat’l Bd. of Med. Examiners, 199 F.3d
10In full, the relevant portion of the paragraph states that “[a]
person or entity may, if otherwise permitted by the laws or
rules of court of a State, bring [an action] in an appropriate
court of that State.” 47 U.S.C. § 227(b)(3). But it “does not
state that a private plaintiff may bring an action under the
[Act] ‘only’ in state court, or ‘exclusively’ in state court,” and
as a result the Supreme Court has held that federal courts
have concurrent jurisdiction over such actions. Mims, 132 S.
Ct. at 750. Any limitations imposed by “the laws or rules of
court of a State” presumably would not apply in federal court.
14
146, 153 (3d Cir. 1999).11 Someone with a generalized
interest in punishing telemarketers, for example, would not
qualify on that basis alone. Cf. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 578 (1992).
But here, Article III is not the only barrier faced by
potential plaintiffs. Congress surely did not intend, for
example, to enable a plaintiff to sue merely because she
learned that a friend or neighbor had received a robocall.
This commonsense judgment is embodied in an interpretive
doctrine of special importance here: the “presum[ption] that a
statutory cause of action extends only to plaintiffs whose
interests ‘fall within the zone of interests protected by the law
invoked.’” Lexmark Int’l, 134 S. Ct. at 1388 (quoting Allen v.
Wright, 468 U.S. 737, 751 (1984)).
The Supreme Court’s decision in Lexmark is
instructive. There, the Court was called upon to construe the
Lanham Act, which “authorizes suit by ‘any person who
believes that he or she is likely to be damaged’ by a
defendant’s false advertising.” Id. at 1388 (quoting 15 U.S.C.
§ 1125(a)(1)). “Read literally, that broad language might
suggest that an action is available to anyone who can satisfy
the minimum requirements of Article III.” Id. The Supreme
Court, however, found it unlikely that “Congress meant to
allow all factually injured plaintiffs to recover.” Id. (internal
quotation marks omitted).
11
Notably, the Supreme Court has granted certiorari in a case
that will require it to consider the limits on Congress’s power
to confer Article III standing on plaintiffs. See Spokeo, Inc. v.
Robins, 135 S. Ct. 1892 (2015).
15
Instead, the Court invoked the “presum[ption] that a
statutory cause of action extends only to plaintiffs whose
interests ‘fall within the zone of interests protected by the law
invoked.’” Id. (quoting Allen, 468 U.S. at 751). Because
Congress is assumed to legislate against the background of
this “zone of interests” limitation, it “applies to all statutorily
created causes of action.” Id. The breadth of the zone of
interests depends on the provisions and purposes of the statute
being analyzed. See id. In Lexmark, the Court analyzed the
Lanham Act’s detailed list of purposes and concluded that a
false-advertising plaintiff “must allege an injury to a
commercial interest in reputation or sales,” rather than injury
to its interests as a consumer of a product. Id. at 1390.
We apply a similar analysis here. Within the
subsection of the Act at issue in this appeal, 47 U.S.C. §
227(b) (entitled “Restrictions on use of automated telephone
equipment”), the first paragraph sets forth “[p]rohibitions,”
id. § 227(b)(1); the second discusses the FCC’s authority to
promulgate “[r]egulations,” id. § 227(b)(2); and the third
creates a “[p]rivate right of action” for “a violation of this
subsection,” id. § 227(b)(3).12 In order to delineate the zone
of interests protected by the statute, it makes sense to start by
looking at the prohibitions that the private right of action is
intended to enforce.
12
In using the term “subsection,” Congress ordinarily refers
to the statutory subdivisions that are labeled with lowercase
letters—(a), (b), (c), and so forth. Within subsections,
“paragraphs” are labeled with numbers, and “subparagraphs”
are labeled with uppercase letters. See Koons Buick Pontiac
GMC, Inc. v. Nigh, 543 U.S. 50, 60-61 (2004).
16
The “Prohibitions” paragraph makes it “unlawful for
any person within the United States, or any person outside the
United States if the recipient is within the United States,” to
transmit certain types of telephone calls and facsimiles. Id. §
227(b)(1). It contains four subparagraphs, each of which
identifies the “recipient” and type of communication at issue.
Id.
The first subparagraph forbids using an “automated
telephone dialing system or an artificial or prerecorded voice”
without the consent of the “called party” when calling
emergency telephone lines, hospital patient rooms, pagers,
cell phones, or any service for which the “called party” would
be charged. Id. § 227(b)(1)(A). The second subparagraph,
which Bank of America is accused of violating, proscribes
“using an artificial or recorded voice” when calling “any
residential telephone line” without the consent of the “called
party.” Id. § 227(b)(1)(B). The third prohibits sending
“unsolicited advertisement[s]” by facsimile to a “recipient.”
Id. § 227(b)(1)(C). And the fourth prohibits using “an
automatic telephone dialing system” to tie up two or more
telephone lines of a “multi-line business” simultaneously. Id.
§ 227(b)(1)(D).
In the subparagraph at issue here, the “called party” is
relevant because its prior consent to receiving robocalls
provides a defense to liability. Id. § 227(b)(1)(B). Thus,
although Congress did not expressly limit standing to the
“called party,” its primary concern in enacting § 227(b)(1)(B)
was to protect that party from unwanted robocalls. This
necessarily means that the “called party” is within the zone of
interests protected by the Act.
17
The District Court determined that the term “called
party” refers to the intended recipient of the robocall, rather
than the actual recipient. And, because Leyse was not the
intended recipient, the Court held he lacked standing. There
are good reasons to doubt the equation of “intended recipient”
with “called party,”13 but the parties did not brief the issue,
13
In its findings in support of the Act, Congress appears to
equate the “called party” with the “receiving party.”
Telephone Consumer Protection Act of 1991, Pub. L. No.
102-243, § 2(12), 105 Stat. 2394 (note following 47 U.S.C. §
227). Subsection 227(b)(1) itself suggests that the “called
party” is the actual “recipient.” 47 U.S.C. § 227(b)(1).
Indeed, we referred to it as the “recipient” in another case
construing the Act. See Gager, 727 F.3d at 269. The Seventh
and Eleventh Circuits have concluded from the Act’s text and
structure that the term “called party” refers to “the person
subscribing to the called number at the time the call is made,”
rather than the intended recipient of the call. Soppet v.
Enhanced Recovery Co., LLC, 679 F.3d 637, 643 (7th Cir.
2012); see also Osorio, 746 F.3d at 1251-52. Their reasoning
also suggests, however, that the “person who answers the
call” may qualify as well. Soppet, 679 F.3d at 640. Perhaps
most significantly, however, the FCC recently issued a
declaratory ruling defining “called party” as “the subscriber,
i.e., the consumer assigned the telephone number dialed and
billed for the call, or the non-subscriber customary user of a
telephone number included in a family or business calling
plan.” In the Matter of Rules & Regulations Implementing
the Tel. Consumer Prot. Act of 1991, CG Docket No. 02-278,
WC Docket No. 07-135, FCC 15-72, 2015 WL 4387780, at
18
and we need not decide it here. This is because—as was the
case with the Lanham Act in Lexmark—Congress made
several findings in the Telephone Consumer Protection Act
that allow us to trace the contours of the protected zone of
interests. The zone protected by § 227(b)(1)(B) may well be
coextensive with the scope of the term “called party.” But
given the existence of relevant congressional findings, we
may determine whether Leyse has statutory standing without
first concluding that he is a “called party.”
In passing the Act, Congress was animated by
“outrage[] over the proliferation” of prerecorded
telemarketing calls to private residences, which consumers
regarded as “an intrusive invasion of privacy” and “a
nuisance.” Telephone Consumer Protection Act of 1991,
Pub. L. No. 102-243, § 2(5)-(6), (10), 105 Stat. 2394 (note
following 47 U.S.C.
§ 227); see also id. § 2(9), (12)-(13). The congressional
findings describe the persons aggrieved by these calls using a
variety of labels: “consumers,” “residential telephone
subscribers,” and “receiving part[ies].” Id. § 2(5)-(6), (10)-
(12).
The task facing Congress was that “[i]ndividuals’
privacy rights, public safety interests, and commercial
freedoms of speech and trade must be balanced in a way that
protects the privacy of individuals and permits legitimate
*26 ¶ 73 (F.C.C. July 10, 2015) (Declaratory Ruling and
Order); see also id. at *26-27 ¶¶ 72-77, *28 ¶ 78 (rejecting
“proposals that we interpret ‘called party’ to be the ‘intended
recipient’ or ‘intended called party’”).
19
telemarketing practices.” Id. § 2(9). In striking this balance,
Congress determined that “[b]anning . . . automated or
prerecorded telephone calls to the home, except when the
receiving party consents to receiving the call or when such
calls are necessary in an emergency situation affecting the
health and safety of the consumer, is the only effective means
of protecting telephone consumers from this nuisance and
privacy invasion.” Id. § 2(12).
As was forcefully stated by Senator Hollings, the Act’s
sponsor, “Computerized calls are the scourge of modern
civilization. They wake us up in the morning; they interrupt
our dinner at night; they force the sick and elderly out of bed;
they hound us until we want to rip the telephone right out of
the wall.” 137 Cong. Rec. 30,821-22 (1991). Although his
views are not controlling, see Mims, 132 S. Ct. at 752, they
are consistent with the findings that appear in the text of the
Act, and it is relevant that he emphasized the potential of
robocalls to harass the occupants of private residences. See
also Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1258
(11th Cir. 2014) (noting that a purpose of the Act is to protect
“residential privacy”).
From this evidence, it is clear that the Act’s zone of
interests encompasses more than just the intended recipients
of prerecorded telemarketing calls. It is the actual recipient,
intended or not, who suffers the nuisance and invasion of
privacy. This does not mean that all those within earshot of
an unwanted robocall are entitled to make a federal case out
of it. Congress’s repeated references to privacy convince us
that a mere houseguest or visitor who picks up the phone
would likely fall outside the protected zone of interests. On
the other hand, a regular user of the phone line who occupies
the residence being called undoubtedly has the sort of interest
20
in privacy, peace, and quiet that Congress intended to
protect.14
Limiting standing to the intended recipient would
disserve the very purposes Congress articulated in the text of
the Act. If the caller intended to call one party without its
consent but mistakenly called another, neither the actual
recipient nor the (uninjured) intended recipient could sue,
even if the calls continued indefinitely. We doubt Congress
meant to leave the actual recipient with no recourse against
even the most unrelenting caller.
The District Court, however, focused on the plight of
the callers, many of whom manage to obtain the consent of
their intended recipients. It reasoned as follows:
If any person who . . . answers the telephone
call has standing to sue, then businesses will
never be certain when . . . placing a call with a
prerecorded message would be a violation of
the TCPA. Under the statute, a business is
permitted to send a . . . phone call with a
prerecorded message to persons who have given
prior express consent . . . . When a business
places such a call[,] . . . it does not know
whether the intended recipient or a roommate or
employee will answer the phone . . . . If the
14
Bank of America suggests that standing must be limited to
one person because the Act authorizes only one $500 award
per violation. See 47 U.S.C. § 227(b)(3)(B). Putting aside the
fact that § 227(b)(3) makes available other forms of relief, we
see no reason why the statutory sum could not be divided
among the injured parties.
21
business is liable to whomever happens to
answer the phone[,] . . . a business could face
liability even when it intends in good faith to
comply with the provisions of the TCPA.
(App. 12 (quoting Leyse, 2010 WL 2382400, at *4).)
The District Court’s concerns are misplaced. The
caller may invoke the consent of the “called party” as a
defense even if the plaintiff is someone other than the “called
party.” Thus, if Dutriaux were the “called party” by virtue of
being the intended recipient of the call, her consent to receive
robocalls would shield Bank of America from any suit
brought by Leyse. We would not need to deny statutory
standing to Leyse in order to protect Bank of America from
unanticipated liability. On the other hand, if Leyse were the
“called party” despite being an unintended recipient, it is
undisputed that he would have statutory standing regardless
of the policy considerations raised by the District Court.15
Finally, we observe that “[b]ecause the TCPA is a
remedial statute, it should be construed to benefit
15
We note that in the recent declaratory order of the FCC
described earlier, the FCC defined the “called party” as the
“subscriber” or “customary user” of the phone number and
found that it was “reasonable for callers to rely” on “consent
to receive robocalls” from either type of called party. In the
Matter of Rules & Regulations Implementing the Tel.
Consumer Prot. Act of 1991, 2015 WL 4387780, at *26 ¶ 73,
*27 ¶¶ 75-76. By this logic, Dutriaux and Leyse would both
qualify as “called parties,” and consent from either would
shield Bank of America from liability.
22
consumers.” Gager, 727 F.3d at 271. Even if the various
proposed interpretations of the Act were equally plausible—
which they are not—the scales would tip in Leyse’s favor.
Given the variety of arrangements that exist for
sharing living spaces and telephones, there may be close
cases under the zone-of-interests test—at least until cell
phones entirely displace landlines. Leyse’s, however, is by
no means a close case. The complaint alleges that Bank of
America placed a call “to Leyse’s residential telephone line.”
(App. 21.) At the motion to dismiss stage, we are required to
treat this allegation as true, and it places Leyse squarely
within the zone of interests.
We would reach the same conclusion even if we were
to look beyond the complaint and consider the allegations
made by the parties during oral argument and in other actions.
The parties agree that Leyse’s roommate Dutriaux was the
subscriber and intended recipient of the call. But Leyse
claims that he regularly used the phone, and the fact that he
was Dutriaux’s roommate indicates that he, too, had a privacy
interest in avoiding telemarketing calls to their shared home.
Under the zone-of-interests test, Leyse has alleged enough to
survive a motion to dismiss, and it was error for the District
Court to dismiss the complaint for lack of statutory standing.
We note, however, as we state supra, that it is the actual
recipient, intended or not, who suffered the nuisance or
invasion of privacy. The burden of proof will, therefore, be
on Leyse in the District Court, to demonstrate that he
answered the telephone when the robocall was received.
23
III. Conclusion
For the foregoing reasons, we will vacate the District
Court’s order of dismissal and remand for further
proceedings.
24