Hall v. Xanadu Mktg.

682 F.Supp.3d 1278

June HALL, on behalf of herself and all others similarly situated, Plaintiff, v. XANADU MARKETING, INC. d/b/a Houses Into Homes, Defendant.

CIVIL ACTION FILE NO. 1:22-CV-3795-MHC

United States District Court, N.D. Georgia, Atlanta Division

Signed July 6, 2023

Alex Kruzyk, Pro Hac Vice, Pardell, Kruzyk & Giribaldo, PLLC, Boca Raton, FL, Brian J. Sutherland, Rachel Berlin Benjamin, Beal, Sutherland, Berlin & Brown, LLC, Atlanta, GA, for Plaintiff.

Joshua Yehuda Joel, Ryan D. Watstein, Kabat Chapman Ozmer LLP, Atlanta, GA, for Defendant.

ORDER

MARK H. COHEN, United States District Judge

This case comes before the Court on Defendant Xanadu Marketing, Inc. ("Xanadu")'s Amended Motion to Dismiss Plaintiff's Amended Class Action Complaint ("Am. Mot. to Dismiss") [Doc. 25] and Plaintiff June Hall ("Hall")'s Motion to Dismiss for Failure to State a Claim Regarding Defendant's Amended Counterclaims¹ [Doc. 27].

I. BACKGROUND²

Hall alleges that she registered her cellular telephone number with the Do Not Call ("DNC") registry. Am. Compl. ¶¶ 8-9, 11.³ Despite being registered with the DNC registry, Hall alleges that she received a "dozen similar [unsolicited] text messages" from an unknown sender, later referred to as "Houses into Homes," regarding a personal loan approval. Id. ¶¶ 12-15.

Hall avers that the Houses Into Homes has the same principal place of business as Xanadu. Id. ¶¶ 18-20. Xanadu markets itself as a lead generator for internet marketing programs, including personal and mortgage loans, and advertises consumer finance websites for sale. Id. ¶¶ 21-22. Hall alleges that Xanadu delivered the messages advertising or marketing Xanadu's business to her number that was registered on the DNC registry, for a non-emergency purpose. Id. 23-26. Hall alleges that she was harmed by Xanadu not providing the name of the entity on whose behalf the communication was made and "she spent several hours attempting to identify the entity responsible for sending the text messages at issue as well as additional time investigating ways to get Defendant to stop delivering the text messages." Id. ¶¶ 61, 63.

Hall asserts that Xanadu's conduct ran afoul of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, by delivering to Hall and other members of a class that Hall seeks to represent more than one solicitation call or text message in a twelve-month period. Id. ¶¶ 56-65. Hall alleges that Xanadu violated 47 U.S.C. § 227(c)(5) and 47 C.F.R. § 64.1200(d)(4). Id. ¶¶ 61-62, 65.

II. ANALYSIS

A. Xanadu's Motion to Dismiss Hall's Amended Complaint Under Rule 12(b)(1).

1. Legal Standard

Because standing is jurisdictional, a motion to dismiss for lack of standing is treated as a motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Svs., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008). A challenge to standing under Rule 12(b)(1) may be presented as either a facial or factual attack on subject matter jurisdiction.

Attacks on subject matter jurisdiction, which are governed by Rule 12(b)(1), come in two forms: facial or factual attack. Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990). A "facial attack" challenges whether a plaintiff "has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion." Id. at 1529 (quotation marks omitted). A "factual attack," in contrast, challenges the existence of subject matter jurisdiction irrespective of the pleadings, and extrinsic evidence may be considered. Id. A district court evaluating a factual attack on subject matter jurisdiction "may proceed as it never could" at summary judgment and "is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id. (quotation marks omitted).

Kennedy v. Floridian Hotel, Inc., 998 F.3d 1221, 1230 (11th Cir. 2021); see also Gardner v. Mutz, 962 F.3d 1329, 1340 (11th Cir. 2020) ("In adjudicating a facial attack, the district court takes the allegations as true in deciding whether to grant the motion. By contrast, when a court confronts a 'factual' attack, it needn't accept the plaintiff's facts as true; rather, the district court is free to independently weigh facts and make the necessary findings.") (citations and internal punction omitted). Additionally, on a factual attack, the Court "is not constrained to view [facts] in the light most favorable to the plaintiff." Houston v. Marod Supermarkets, Inc., 733 F.3d 1323, 1336 (11th Cir. 2013) (citation and internal quotation marks omitted).

Standing "is the threshold question in every federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Article III of the United States Constitution expressly limits federal jurisdiction to "cases and controversies" and does not permit federal courts to issue advisory opinions. Miller v. F.C.C., 66 F.3d 1140, 1145 (11th Cir. 1995) (citing Flast v. Cohen, 392 U.S. 83, 94-96, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968)). "To have a case or controversy, a litigant must establish that he [or she] has standing," United States v. Amodeo, 916 F.3d 967, 971 (11th Cir. 2019), which requires the litigant to show (1) an injury in fact that (2) is fairly traceable to the challenged action of the defendant and (3) is likely to be redressed by a favorable decision. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The three components form an "irreducible constitutional minimum." Id. at 560, 112 S.Ct. 2130. "The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements" and, where a case is in the pleading stage, "the plaintiff must clearly allege facts demonstrating each element." Spokeo, Inc. v. Robins, 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016) (citations and internal punctuation omitted).

2. Discussion

Xanadu⁴ mounts both a facial and factual attack on Hall's standing, and claims that Hall lacks standing to assert a violation of the TCPA because she suffered no injury in fact from Xanadu's alleged failure to identify itself based on (1) Hall initially consenting to the receipt of messages, (2) Hall's ability to stop receiving messages within seconds of their receipt, and (3) Hall's alleged injury is not traceable to a violation of the seller-identification requirements of the TCPA. Xanadu's Am. Mot. to Dismiss at 11-17. In response, Hall argues that she has alleged a tangible injury that satisfies standing requirements, and that any consent to receive the communications by Hall does not preclude a finding of an injury traceable to Xanadu's misconduct. Hall's Resp. in Opp'n. to Def.'s Am. Mot. to Dismiss ("Hall's Resp.") [Doc. 26] at 9-16.⁵ Although Xanadu characterizes its motion as both a facial and factual attack on Hall's standing, because the Court finds merit in Xanadu's factual attack, only it needs to be addressed. See McElmurray v. Consol. Gov't of Augusta-Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007) ("The district court has the power to dismiss for lack of subject matter jurisdiction on any of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.") (citation omitted); Pro. Airline Flight Control Ass'n v. Spirit Airlines Inc., 593 F. Supp. 3d 1173, 1178 (S.D. Fla. 2022), aff'd, 65 F.4th 647 (11th Cir. 2023) (addressing only the meritorious facial attack where the defendant asserted both facial and factual challenges); Abbott Point of Care, Inc. v. Epocal, Inc., No. 5:09 CV-1678-SLB, 2010 WL 11527466, at *4 (N.D. Ala. Sept. 7, 2010), aff'd, 666 F.3d 1299 (Fed. Cir. 2012) (same).

Xanadu's factual attack is supported by the declaration of its President Joe Delfgauw, who is also the President of Houses Into Homes. Delfgauw Decl. [Doc. 25-1] (Dec. 27, 2022) ¶⁶ The declaration indicates that Xanadu and its affiliate Houses Into Homes collect information from consumers prior to sending text messages and "maintain[ ] policies and procedures to ensure that it and its affiliates do not send text messages to consumers who do not wish to receive text messages." Delfgauw Decl. ¶¶ 3-5 (requiring consumers to enter names, phone numbers, email addresses, and checking a consent box on the website prior to submitting a request). The declaration includes language of the following disclaimer alongside the consent box that consumers check prior to receiving texts:

By checking and clicking submit, I agree and expressly grant my consent to the site and their partners' to contact me regarding programs and offers via email or telephone using automated technology to any wireless number I have provided in order to provide me with important information and exclusive offers. I understand that message & data rates may apply. I also acknowledge that I may receive up to 3 messages per week. I also acknowledge that I may receive additional email and / or phone calls using automated technology and text messages. Reply STOP to the message to end all messages. Text HELP for customer service or call (800) 370-6254.1 have read and agree to the Terms of Service and the Privacy Policy. Consent to such promotional message is not a condition of purchase.*

Id. ¶ 6. Additionally the term "their partners" hyperlinks to a list of affiliates providing notice that both Xanadu and Houses Into Homes are parties with authorization to send texts from consumers checking the consent box. Id. ¶¶ 6-7.

The declaration further states that "June Hall visited one of Xanadu's websites, https://renttoownhomefmder.com, on February 10, 2022 [,] at 5:08 [A.M.] requesting information about real estate investments." Id. ¶ 12. She provided her phone number, email address, and checked the...