U.S. Fax Law Center v. T2 Technologies, 06CA0432.

Decision Date13 December 2007
Docket NumberNo. 06CA0432.,06CA0432.
Citation183 P.3d 642
PartiesU.S. FAX LAW CENTER, INC., Plaintiff-Appellant and Cross-Appellee, v. T2 TECHNOLOGIES, INC.; David Baker, individually; and Kristin McDonald, individually, Defendants-Appellees and Cross-Appellants.
CourtColorado Court of Appeals

The Law Offices of Andrew L. Quiat, P.C., Andrew L. Quiat, Centennial, Colorado, for Plaintiff-Appellant and Cross-Appellee.

Burg Simpson Eldredge Hersh & Jardine, P.C., Stephen M. Johnson, Diane Vaksdal Smith, Englewood, Colorado, for Defendants-Appellees and Cross-Appellants.

Opinion by Judge VOGT.

Plaintiff, U.S. Fax Law Center, Inc., appeals the trial court judgment dismissing its claims against defendants, T2 Technologies, Inc., David Baker, and Kristin McDonald, for violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, and the Colorado Consumer Protection Act (CCPA), §§ 6-1-101 to -1120, C.R.S.2007. Defendants cross-appeal the trial court's order denying their motion for attorney fees. We affirm.

Plaintiff brought this action as the assignee of businesses that had received unsolicited facsimile advertisements from these defendants and other individuals and entities who are not parties to this appeal. Plaintiff alleged that defendant T2 Technologies, Inc., and its owners, defendants Baker and McDonald, had violated the TCPA by sending plaintiff's assignor a facsimile advertisement that was both unsolicited — and thus prohibited under 47 U.S.C. § 227(b)(1)(C) — and lacking the additional information required under 47 U.S.C. § 227(d)(1)(B). The fax was also alleged to have violated section 6-1-702(1)(b), C.R.S.2007, of the CCPA because it "failed to include . . . a proper telephone number for removal."

In addition to asserting violations of the TCPA and the CCPA, the complaint included a claim for injunctive relief and a claim for damages on a theory of negligence per se and negligence.

Defendants moved to dismiss the TCPA and CCPA claims for lack of subject matter jurisdiction, asserting that plaintiff lacked standing to bring them as an assignee because such claims are not assignable. The trial court agreed, dismissed the TCPA and CCPA claims, and certified its dismissal orders as final pursuant to C.R.C.P. 54(b). It denied defendants' motion for attorney fees under section 13-17-201, C.R.S.2007.

APPEAL

Plaintiff contends on appeal that the trial court erred in dismissing its TCPA and CCPA claims. We disagree.

In moving for dismissal of plaintiff's TCPA claims, defendants relied primarily on U.S. Fax Law Center, Inc. v. iHire, Inc., 362 F.Supp.2d 1248 (D.Colo.2005) (iHire I), aff'd, 476 F.3d 1112 (10th Cir.2007) (iHire IV), in which the federal district court held that TCPA claims based on the sending of unsolicited facsimile advertisements were not assignable under Colorado law because (1) such claims are in the nature of claims for invasion of privacy and, as such, cannot be assigned; (2) as personal injury claims, TCPA claims would not survive the death of the plaintiff under Colorado's survival statute, section 13-20-101(1), C.R.S.2007; and (3) the TCPA claims were penal in nature, and the right to recover a penalty is not assignable in the absence of express statutory language to the contrary.

The trial court disagreed with the first two reasons for nonassignability relied on by the iHire I court, but agreed with that court's third reason. Because the TCPA claims in this case, which sought only statutory damages, were penal in nature, the court concluded that the claims were not assignable.

In a separate order, the court ruled that the CCPA claims were also penal and, thus, not assignable. In so concluding, the trial court relied on another decision by the iHire I court, U.S. Fax Law Center, Inc. v. iHire, Inc., 374 F.Supp.2d 924, 929-30 (D.Colo.2005) (iHire III), aff'd, iHire IV, in which that court had held that CCPA claims were not assignable.

I.

As an initial matter, we disagree with plaintiff's contention that the trial court erred in analyzing the assignability issues before it as matters of "standing" instead of considering the issues under the concept of "real party in interest." See C.R.C.P. 17(a) (requiring that every action be prosecuted in the name of the real party in interest).

In order for a court to have jurisdiction over a dispute, the plaintiff must have standing to bring the case. To have standing, the plaintiff must have suffered an injury in fact to a legally protected interest. Ainscough v. Owens, 90 P.3d 851, 855 (Colo.2004).

A plaintiff who has not itself sustained an injury in fact may nevertheless have standing to sue if it has a valid assignment of a claim from one who has sustained such injury. See iHire IV, 476 F.3d at 1120; Espinosa v. Perez, 165 P.3d 770, 773 (Colo. App.2006). Conversely, if the purported assignment on which the plaintiff relies is invalid, the plaintiff lacks standing unless it has itself suffered injury. iHire IV, 476 F.3d at 1120.

Courts considering whether assignments of TCPA claims are valid have concluded that the lack of assignability deprives the purported assignee of standing. See id. (plaintiffs who had themselves received no unsolicited faxes and held no valid assignment of TCPA claims lacked standing to assert such claims); Eclipse Manufacturing Co. v. M & M Rental Center, Inc., 496 F.Supp.2d 937, 941 (N.D.Ill.2007) (if TCPA claims are not assignable, plaintiff suing as assignee would lack standing to assert them); McKenna v. Oliver, 159 P.3d 697, 700 (Colo.App.2006) (because TCPA claims could not be assigned, plaintiff lacked standing to sue as assignee for violation of TCPA).

Parties asserting claims under the CCPA who lack a valid assignment are likewise deemed to lack standing. See U.S. Fax Law Center, Inc. v. Myron Corp., 159 P.3d 745, 746-47 (Colo.App.2006).

Thus, regardless of whether the issue could also be characterized as one of "real party in interest," see U.S. Fax Law Center, Inc. v. iHire, Inc., 373 F.Supp.2d 1208, 1210 (D.Colo.2005) (iHire II) (recognizing that plaintiff's attempt to bring TCPA claims as assignee "might arguably be characterized as a real-party-in-interest question rather than a standing question," but concluding that result would be the same because a party has standing to prosecute suit in federal court only if it is the real party in interest), we conclude the trial court did not err in analyzing the assignability issue as a question of standing.

II.

Plaintiff also contends that federal law, not Colorado law, controls the assignability of TCPA claims; that such claims are assignable under federal law; and that the trial court erred in relying on state law to reach a contrary conclusion. We disagree.

The TCPA itself directs that state law is to govern the issue of whether a plaintiff may bring a TCPA claim as the assignee of a recipient of an unsolicited facsimile. The TCPA section providing for a private right of action states: "A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring [a TCPA action]." 47 U.S.C. § 227(b)(3) (emphasis added). We agree with the conclusion of the Tenth Circuit in iHire IV that the emphasized statutory language encompasses the matter of assignability and directs that state law should determine the issue. iHire IV, 476 F.3d at 1118; see also Eclipse Manufacturing Co. v. M & M Rental Center, Inc., 521 F.Supp.2d 739, 744 (N.D. Ill.2007) (applying Illinois law to determine whether TCPA claim was assignable); Martinez v. Green, 212 Ariz. 320, 131 P.3d 492, 494 (Ct.App.2006) (applying Arizona law to decide issue of assignability of TCPA claim).

Although plaintiff argues that federal law should govern this issue because a "uniform national rule" is necessary to further the interests of the federal government, we agree with the iHire IV court that no such necessity is apparent here. As that court observed:

In TCPA cases, the United States is not a party, and we are unaware of any federal program that could be frustrated. . . .

No . . . national policy is apparent. . . . The TCPA never mentions the assignability of claims, let alone suggests that the free assignability of claims is an important component of the TCPA. Consequently, allowing state law to govern the assignability of TCPA claims does not conflict with any federal policy.

iHire IV, 476 F.3d at 1118-19. Thus, we look to Colorado law to determine whether plaintiff's TCPA claims are assignable.

III.

We conclude that, under Colorado law, the TCPA claims plaintiff asserted against these defendants are not assignable.

A.

We note at the outset that courts in Colorado have relied on various rationales in concluding that TCPA claims are not assignable. See iHire IV, 476 F.3d at 1120 (TCPA claims cannot be assigned because they are in the nature of personal injury, privacy claims); iHire I, 362 F.Supp.2d at 1252-53 (TCPA claims are not assignable because they (1) do not survive the life of the individual claiming injury under Colorado's survival statute, (2) are invasion-of-privacy tort claims, and (3) are penal in nature); McKenna, 159 P.3d at 700 (TCPA action based on receipt of unsolicited faxes by individuals is not assignable because it is in the nature of an action for violation of the right to privacy).

Plaintiff challenges the holdings in these cases on various grounds. It contends, for example, that TCPA claims do in fact survive under section 13-20-101, and that, when such claims are asserted by business organizations that have no cause of action for invasion of privacy, the "invasion of privacy" rationale of McKenna and the iHire cases does not apply.

However, the trial court here did not rely on the "survival" or "invasion of privacy" rationales of these cases. Rather, it concluded that the TCPA claims in this case were penal in nature under Colorado law and therefore not assignable for that reason. Because we agree...

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