8th Circuit Affirms Lack of Article III Standing in TCPA Fax Advertisement Case

The Eighth Circuit recently held that a plaintiff health center lacked Article III standing in a putative class action lawsuit alleging violations of the Telephone Consumer Protection Act (TCPA) where advertisements were faxed to the health center without proper opt-out notices.  The circuit court concluded that, even though the advertisements did not meet the technical requirements for displaying proper opt-out notices, the health center did not establish a causal connection between the injury and the alleged TCPA violation.

The TCPA makes it unlawful to fax an unsolicited advertisement unless the fax has an opt-out notice that meets certain requirements.  While the TCPA creates a private right of action to address such violations, plaintiffs must still satisfy Article III standing to proceed in federal court.  To establish Article III standing, a plaintiff must show that it 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.

Here, the Eighth Circuit found that the health center sufficiently alleged that it suffered an injury-in-fact when the faxed advertisements caused it to lose toner, paper, and time due to reviewing the advertisements.  However, the Eighth Circuit explained that the health center must also establish that the injury is fairly traceable to an alleged TCPA violation.  The circuit court concluded that the health center did not show its purported injury was traceable to the defendant’s alleged failure to provide a proper opt-out notice.  The health center did not rebuke the challenged faxes, and because the plaintiff had conceded that the faxes were not transmitted without consent, the court found that the health center did not establish traceability and, therefore, lacked Article III standing.

The court—applying Spokeo, Inc. v. Robbins, 136 S. Ct. 1540 (2016)—also noted in the alternative that, while a statutory violation can establish injury-in-fact when it creates a risk of real harm, a bare procedural violation is insufficient.  Here, the advertisements contained a box to be checked if the receiver no longer wished to receive the faxes; and listed the name, telephone number, and e-mail address for a contact person sending the advertisements.  The Eight Circuit agreed with the district court’s finding that the opt-out notices conveyed to the recipient the means and opportunity to opt out of receiving future faxes, despite not meeting certain technical requirements such as specifying a fax number to which opt-out requests should be sent.  The health center had the means to opt out but declined to do so.  As such, the circuit court concluded that any technical violation did not cause actual harm or create a risk of real harm.

On the issue of dismissal, the Eighth Circuit found that the district court erred in dismissing the case with prejudice because the lawsuit was initially brought in state court and then later removed to federal court.  Because state courts are not bound by the limitations of Article III standing, the court vacated the dismissal order and directed the district court to remand the case back to state court.

The case is St. Louis Heart Center, Inc. v. Nomax, Inc., and is available here.