June 21, 2021

Volume XI, Number 172


June 18, 2021

Subscribe to Latest Legal News and Analysis

Central District of California Dismisses TCPA Claims Due to a Lack of Traceability

One of our recent articles discussed how federal courts have analyzed the “traceability” element of Article III in TCPA cases. Specifically, we noted that two federal courts had cited Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016) in dismissing claims because the alleged injuries were not “traceable to” (i.e., caused by) the purported violations. See Ewing v. SQM US Inc., No. 16-1609, 2016 U.S. Dist. LEXIS 143272 (S.D. Cal. Sept. 29, 2016); Romero v. Dep’t Stores Nat’l Bank, No. 15-0193, 2016 U.S. Dist. LEXIS 110889 (S.D. Cal. Aug. 5, 2016). In their view the “violation” was not the act of dialing a number, but rather the act of dialing a number with an ATDS. Because the plaintiffs’ alleged injuries would have been the same if the defendants had dialed their numbers manually, the courts found that the plaintiffs lacked Article III standing because their alleged injuries were not traceable to the use of an ATDS. Although the cases involved only one or two calls, the courts did not limit their traceability analyses to that context. Nevertheless it remained unclear whether this rigorous approach to traceability would be applied more broadly in other contexts.

A recent decision from the Central District of California does just that, dismissing an action arising from the alleged receipt of multiple unsolicited faxes without opt-out notices. In ARcare v. Qiagen North American Holdings, Inc., No. 16-7638, 2017 U.S. Dist. LEXIS 8344, at *9-10 (C.D. Cal. Jan 19, 2017), the court dismissed a putative class action because it determined that the alleged injuries were not traceable to the purported violations. The plaintiff, a non-profit medical services company, alleged that the defendant had violated the TCPA by transmitting numerous unsolicited faxes without express prior consent and without a sufficient opt-out notice. Id. at *1-2. It further alleged that its damages included “lost paper, toner, ink, and the time that could have otherwise been spent on business activities.” Id. at *2. The defendant moved to dismiss and asserted that the plaintiff’s alleged injuries were de minimis and were not traceable to the specific conduct that allegedly violated the TCPA. Id. at *5.

The court rejected the argument regarding the de minimis nature of the plaintiff’s injuries, finding that they were “sufficiently concrete and particularized to satisfy Article III’s injury in fact requirement.” Id. at *7-8. But it agreed that the plaintiff had failed to show that its injuries were “traceable or related to [the defendant’s] alleged violation of the TCPA.” Id. at *8. Specifically, it reasoned that “[a] plaintiff who would have been no better off had the defendant refrained from the unlawful acts of which the plaintiff is complaining does not have standing under Article III of the Constitution to challenge those acts in a suit in federal court.” Id. The court also noted that “[a]lthough the TCPA provides a fax recipient with the right to bring a private suit for receiving an unsolicited fax which lacks a TCPA-compliant opt-out notice, the recipient lacks standing to bring a claim under the TCPA unless he can also allege a concrete and particularized harm caused by the TCPA violation.” Id. at *8-9.

The plaintiff’s failure to allege that it had tried to opt-out of future faxes was also relevant to the court’s analysis. Id. at *9 n.1. The court noted that each fax described a mechanism by which recipients could opt-out of future faxes. Id. Even though the opt-out notices may not have been legally sufficient, the plaintiff failed to allege that it had tried to opt-out thorough this mechanism or that it would have opted-out if the faxes actually included the required notice. Consequently, even if the faxes had fully complied with the TCPA’s opt-out notice requirements, the plaintiff would have lost the same amount of ink, toner, paper, and time. See id. The court concluded that the plaintiff had failed to “show how it was injured by the receipt of faxes with opt-out notices which failed to fully comply with the TCPA, instead alleging harm which would result from the receipt of any fax.” Id. at *9. Because the plaintiff alleged only a “bare procedural violation” that was “divorced from any concrete harm” that could be traced to the violation, the court dismissed the action for lack of Article III standing. Id. at *10.

© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume VII, Number 41



About this Author

Michael Daly, Drinker Biddle Law Firm, Philadelphia, Litigation and Retail Attorney

Michael P. Daly defends class actions and other complex litigation matters, handles appeals in state and federal courts across the country, and counsels clients on maximizing the defensibility of their marketing and enforceability of their contracts. A recognized authority on class action and consumer protection litigation, he often speaks, comments, and writes on recent decisions and developments in the class action arena. He is also a founder of the firm’s TCPA Team; the senior editor of the TCPA Blog, which provides important information and insight...

Matthew Morrissey, Drinker Biddle Law Firm, Litigation Attorney

Matthew M. Morrissey litigates claims in federal and state courts throughout the country. Matt represents clients in commercial disputes, class actions, internal investigations and financial services litigation. He is also frequently called upon to represent clients in regulatory and enforcement actions involving federal, state and municipal authorities.

Matt is a contributor to the firm's SEC Law Perspectives Blog, which provides reports, discussions, and...