Gorss Motels, Inc. v. Sysco Guest Supply, LLC
| Decision Date | 21 August 2017 |
| Docket Number | CIVIL CASE NUMBER: 3:16-cv-01911-VLB |
| Court | U.S. District Court — District of Connecticut |
| Parties | GORSS MOTELS, INC., Plaintiff, v. SYSCO GUEST SUPPLY, LLC, JOHN DOES 1-5, Defendants. |
[DKT. 23]
Plaintiff Gorss Motels, Inc. brings this putative class action against Defendant Sysco Guest Supply, LLC and John Does 1-5 ("Defendants") for violations of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. §§ 227, et seq. ("TCPA"). Before the Court is Defendants' motion to dismiss for failure to establish subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1). The Court must now determine whether Defendants' three allegedly unsolicited facsimile (fax) advertisements adequately confer upon Plaintiff Article III standing to bring this suit. For the foregoing reasons, the Court finds that they do confer jurisdiction and accordingly DENIES Defendants' Motion to Dismiss.
Under the TCPA, it is "unlawful for any person within the United States . . . to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement. . . ." 47 U.S.C. § 227(b)(1)(C). The TCPA confers a private right of action for persons or entities to enjoin a violation, recover monetary loss or receive $500 in damages, or both. 47 U.S.C. § 227(b)(3).
According to the Complaint, Defendants have sent unsolicited facsimile advertisements to Plaintiff, including but not limited to three faxes sent in August or September of 2013. [Dkt. 1 ¶ 2]. The faxes "describe the commercial availability or quality of Defendants' products, goods and services." Id. These "junk faxes" do not contain the required opt-out language. Id. ¶ 3. Plaintiff did not give Defendant prior express invitation or permission to send such faxes to Plaintiff. Id. ¶ 13. Defendants allegedly sent "the same and other unsolicited facsimiles with opt-out language identical or substantially similar to the opt-out language of the fax advertisements" to Plaintiff and at least 40 other recipients or sent the advertisements with the required opt-out language but without permission. Id. ¶ 14. Plaintiff believes Defendant continues to send these junk faxes. Id. ¶¶ 14, 30.
Plaintiff seeks to certify a class that includes those who received faxes from Defendant during the four years prior to the filing of this case. Id. ¶ 29. Plaintiff believes that the faxes others received "were and are being done in the same or similar manner." Id. ¶ 5. Plaintiff and others from the putative class do not have a reasonable means to avoid receiving unauthorized faxes as fax machines are left on and operative to receive urgent communications. Id. ¶ 15. Plaintiff and the putative class do not have an established business relationship with Defendant. See id. ¶ 33.
As a result of Defendants' actions, "Plaintiff and the other class members" have (1) lost paper and toner due to the printing of the faxes; (2) experienced the use oftheir telephone lines and fax machines in connection with the unsolicited faxes; and (3) wasted time receiving, reviewing and routing the Defendants' unauthorized faxes, which could otherwise be spent on business activities. Id. ¶ 34.
"Federal courts are courts of limited jurisdiction. . . ." Gunn v. Minton, 568 U.S. 251, 256 (2013). Subject matter jurisdiction is not waivable, and a lack of subject matter jurisdiction may be raised at any time, by a party or the court sua sponte. See Gonzalez v. Thaler, 565 U.S. 134, 141 (2012); see also Sebelius v. Auburn Reg'l Med. Ctr., 568 U.S. 145, 153 (2013) (). In circumstances where a plaintiff lacks Article III standing, a court may not exercise subject matter jurisdiction. Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 198 (2d Cir. 2005). If a court lacks subject matter jurisdiction, it must dismiss the action. See Fed. R. Civ. P. 12(h)(3).
A "district court must take all uncontroverted facts in the complaint [ ] as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). However, "where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings. . . ." Id. "In that case, the party asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id.
Defendant moves for dismissal solely on the basis that Plaintiff lacks Article III standing to bring suit for a TCPA violation. The Court accordingly shall address this limited issue involving subject matter jurisdiction and will not address the merits of the case.1
Under Article III, section 2 of the Constitution, a federal court is limited to jurisdiction over "Cases" and "Controversies." Massachusetts v. E.P.A., 549 U.S. 497, 516 (2007). The doctrine of standing is "an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). "'[T]he gist of the question of standing' is whether petitioners have 'such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination." E.P.A., 549 U.S. at 517 (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)). Proper standing requires a three-part showing: that the plaintiff has "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S. Ct. 1540,1547 (2016) (citing Lujan, 504 U.S. at 560-61). The plaintiff bears the burden of properly alleging facts that establish these elements. Id.
Defendants' position is that Plaintiff lacks Article III standing for two reasons: (1) it fails to establish a "concrete injury" as required for an "injury-in-fact," and (2) it cannot establish a causal connection between the injuries and the TCPA violations. [Dkt. 26 at 1]. The Court will address these two arguments in turn.
A plaintiff sufficiently alleges an "injury-in-fact" by showing there is "'an invasion of a legally protected interest' that is 'concrete and particularized' and actual or imminent, not conjectural or hypothetical." Spokeo, 136 S. Ct. at 1548 (quoting Lujan, 504 U.S. at 560). An injury is "concrete" when it is "'real,' and not 'abstract,'" or in other words it "actually exist[s]." Id. Concrete injuries may be both tangible and intangible, and where the latter is at issue "both history and the judgment of Congress play important roles." See id. at 1549. An injury is "particularized" when it "affect[s] the plaintiff in a personal and individual way." Id. at 1548.
1. Concrete Harm
As the Supreme Court made clear in Spokeo, 136 S. Ct. at 1549, even though tangible harms may be easier to identify, intangible harms can similarly be concrete. The Supreme Court instructed lower courts "to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts." Id. "Actions to remedy defendants' invasions of privacy, intrusion upon seclusion,and nuisance have long been heard by American courts, and the right of privacy is recognized by most states." Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1043 (9th Cir. 2017); Bell v. Survey Sampling Int'l, LLC, No. 3:15-CV-1666 (MPS), slip op. at 3 ().
Courts may look to Congress for guidance when evaluating intangible harms because "Congress is well positioned to identify intangible harms that meet minimum Article III requirements." Spokeo, 136 S. Ct. at 1549. Accordingly, Congress has the ability to "elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law." Id. (internal quotation marks and citations omitted). This does not mean that all statutory violations automatically satisfy the injury-in-fact requirement, however, because "Article III standing requires a concrete injury even in the context of a statutory violation." Id.; see Leyse v. Lifetime Entm't Servs., LLC, 679 F. App'x 44, 46 (2d Cir. 2017) () (quoting Strubel v. Comenity Bank, 842 F.3d 181, 188 (2d Cir. 2016)). In other words, a plaintiff may not "allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III." Spokeo, 136 S. Ct. at 1549. A key question of this Motion to Dismiss, therefore, is whether a TCPA violation is more than a "bare procedural violation, divorced from any concrete harm," and instead is, in it of itself, concrete.
The Second Circuit has not had the occasion to address Article III standing in the context of a TCPA fax advertisement case. However, the Eleventh Circuit in Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., has had such an opportunity and analyzed the TCPA's legislative history with respect to unsolicited fax advertisements, finding it clear that the statute's "prohibition against sending unsolicited fax advertisements was intended to protect citizens from the loss of the use of their fax machines during the...
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