Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—3rd Cir.: Unintended call recipient within TCPA’s protected ‘zone of interests’ had standing to sue, (Oct 15, 2015)

By Michael Menzhuber, J.D., LL.M.

A district court’s holding that a telephone subscriber’s roommate lacked standing to bring a Telephone Consumer Protection Act (TCPA) against a telemarketer was vacated by the U.S. Court of Appeals in Philadelphia. The appeals court determined that the roommate, as a regular use of the phone line and occupant of the residence, was within the zone of interests protected by the TCPA (Leyse v. Bank of America National Association, October 14, 2015, Fuentes, J.).

Background. A telemarketer, seeking to advertise credit cards for Bank of America National Association (BoA), placed a prerecorded message call, in violation of the TCPA, to a telephone shared by Mark Leyse and Genevieve Dutriaux. Dutriaux was the telephone subscriber and the intended recipient of the call. Dutriaux and Leyse subsequently filed several class-action lawsuits against BoA. On appeal, Leyse was the only named plaintiff.

BoA filed a Federal Rule of Civil Procedure 12(b)(6) to dismiss on the grounds of collateral estoppel, the basis of which was that a prior lawsuit 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. The appeals court vacated the dismissal but noted, on remand, that BoA might be able to argue that Leyse lacked standing because he was an unintended recipient of the prerecorded message.

On remand, BoA filed a Rule 12(b)(6) motion to dismiss on the basis that Leyse lacked standing because he was not the “called party.” Leyse responded that: (1) the motion was procedurally improper because BoA could have raised it in its previous motion; and (2) a private right of action is available to any person or entity injured by the violation. In siding with BoA, the district court determined that Leyse was the “called party”, which it defined as the intended recipient of the call, and, therefore, he did not fall within the class of plaintiffs authorized to sue under the TCPA.

Rule 12 Restrictions on Successive Motions to Dismiss. The appeals court noted that BoA could have raised its “lack of standing” motion when it asserted its motion to dismiss on the grounds of collateral estoppel. Because it did not, its “lack of standing” motion was procedurally barred unless it qualified for an exception.

The appeals court determined that BoA’s motion did not qualify for the Rule 12(h)(2) exemption because that exception only exempts motions to dismiss for lack of subject-matter jurisdiction and statutory standing is not jurisdictional. It also determined that the motion did not fall within the Rule 12(h)(3) exception because: (1) it was not a Rule 7(a) pleading; (2) a Rule 12(c) motion for judgment on the pleadings; or (3) a motion raised at trial.

The appeals court, however, noted that a district court’s decision to consider a successive Rule 12(b)(6) motion to dismiss is usually harmless, even if it violated Rule 12(g)(2). It further noted that if it vacated and remanded without ruling on the merits, BoA would inevitably raise arguments in a post-answer Rule 12(c) motion and the case would come up on appeal for a third time. Consequently, it held that the district court’s error was harmless and it proceeded to the merits of the case.

Statutory Standing under the TCPA. The district court 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 not right to sue. The appeals court disagreed that the caller’s intent circumscribes standing and, instead, determined that standing is determined by whether the plaintiff’s interests fall with a zone of protected interests under the TCPA. The court further determined that TCPA’s zone of interests encompasses more than just the intended recipients of prerecorded calls.

The appeals court noted that a mere houseguest or visitor who picks up a phone and hears an unwanted prerecorded call would likely fall outside the zone of protected interests. However, an individual who is a regular user of the phone, and who occupies the residence being called, has the sort of interest in privacy, peace, and quiet that the TCPA was intended to protect.

Because Leyse was the roommate of the intended recipient of the call, and he regularly used that phone, the appeals court determined that he had a privacy interest in avoiding telemarketing calls to their shared home. Because of this privacy interest, which placed Leyse within the TCPA’s zone of protected interests, and because the TCPA is a remedial statute to be construed as benefiting consumers, the appeals court vacated the district court’s order of dismissal and remanded the case for further proceedings.

The case is No. 124-4073.

Attorneys: Todd C. Bank for Mark Leyse. Joseph R. Palmore and Mark P. Ladner (Morrison & Foerster LLP) for Bank of America National Association

Companies: Bank of America National Association

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