JWD Auto., Inc. v. DJM Advisory Grp. LLC

218 F.Supp.3d 1335

JWD AUTOMOTIVE, INC., a Florida corporation, individually and as the representative of a class of similarly situated persons d/b/a NAPA Auto Care of Cape Coral, Plaintiff,

v.DJM ADVISORY GROUP LLC, Banner Life Insurance Company, William Penn Life Insurance Company of New York, and John Does 1–10, Defendants.

Case No: 2:15–cv–793–FtM–29MRM

United States District Court, M.D. Florida, Fort Myers Division.

Signed November 21, 2016

Ryan M. Kelly, Ross M. Good, Anderson & Wanca, Rolling Meadows, IL, for Plaintiff.

A. Brian Phillips, A. Brian Phillips, PA, Orlando, FL, John H. Gionis, Nicole L. Milone, Paul B. Sweeney, Certilman, Balin, Adler & Hyman, LLP, East Meadow, NY, for Defendants.

OPINION AND ORDER

JOHN E. STEELE, SENIOR UNITED STATES DISTRICT JUDGE

This matter comes before the Court on Defendants' Motions to Dismiss Plaintiff's Complaint (Docs. ## 28, 30) filed on April 5, 2016 and April 6, 2016 and Plaintiff's Response in Opposition (Doc. # 35) filed on April 19, 2016. For the reasons set forth below, Defendants' Motions are denied.

I.

This is a junk fax case. On December 21, 2015, Plaintiff JWD Automotive, Inc. filed a class-action complaint (Doc. # 1) against DJM Advisory Group LLC (DJM Advisory), Banner Life Insurance Company (Banner), William Penn Life Insurance Company of New York (William Penn) and John Does 1–10 (collectively, Defendants). The one-count Complaint alleges that Defendants violated the Telephone Consumer Protection Act of 1991 (TCPA), as amended by the Junk Fax Protection Act (JFPA) of 2005, 47 U.S.C. § 227, by sending Plaintiff (and others) unsolicited commercial advertisements by facsimile machine (i.e. "junk faxes"). The junk fax Plaintiff received (the Fax) (Doc. # 1–1) lists monthly life insurance premiums and invites recipients to submit their information to receive a complimentary, personalized quote for a DJM Advisory life insurance policy underwritten by Banner or William Penn. Plaintiff alleges that, by sending these junk faxes, Defendants: i) caused Plaintiff and others to lose paper and toner; ii) occupied their telephone lines and fax machines; iii) wasted their time; and iv) violated their privacy interests. (Doc. # 1, ¶ 36.)

Defendants have moved to dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(1) on the ground that Plaintiff lacks constitutional standing.¹ Defendants Banner and William Penn (the Underwriter Defendants) also seek dismissal of Plaintiff's claims against them under Rule 12(b)(6), since the Complaint "fails to include more than conclusory and formulaic allegations about [their] alleged responsibility for the fax." Should the Court deny the dismissal requests, Defendants move in the alternative to strike the Complaint's "fail-safe" class definition. The Court will address each argument in turn.

II.

A. Plaintiff's Article III Standing to Maintain this Action

Defendants argue that because the injuries alleged in the Complaint are "less than de minimis ," Plaintiff does not have standing under Article III and the Complaint should be dismissed with prejudice under Rule 12(b)(1). "[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Constitutional standing sufficient to maintain an action in federal court requires, inter alia , that a plaintiff have "suffered an injury in fact." Spokeo, Inc. v. Robins , 136 S.Ct. at 1547. "To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Id. at 1548 (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ).

Defendants' contention that a junk fax transmission results in de minimis harm insufficient to confer standing under Article III has already been considered— and rejected—by the Eleventh Circuit. In Palm Beach Golf Center–Boca, Inc. v. John G. Sarris, D.D.S., P.A. , the Circuit Court concluded that the plaintiff had "Article III standing sufficient to satisfy the injury requirement because it ha[d] suffered a concrete and personalized injury in the form of the occupation of its fax machine for the period of time required for the electronic transmission of the data"—even though the transmission took only one minute, and irrespective of whether the plaintiff had printed or reviewed the fax. 781 F.3d 1245, 1251–53 (11th Cir. 2015). In other words, in this Circuit, the successful transmission of even a single unsolicited fax causes an injury sufficiently concrete and particularized to confer standing under Article III to assert a TCPA claim.²

The Supreme Court's recent Spokeo decision does not compel a different result. That case involved a class-action claim under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. , asserted against an online "people search engine" operator accused of creating inaccurate consumer reports. 136 S.Ct. at 1544. Before the case reached the Supreme Court, the Ninth Circuit had reversed the District Court's finding that the plaintiff lacked standing to assert the FCRA claim, instead holding that because the plaintiff alleged a violation of his "statutory rights," he had adequately pled Article III's injury-in-fact requirement. The Supreme Court vacated that decision, concluding that the Ninth Circuit had performed an incomplete injury-in-fact analysis by considering only whether the plaintiff alleged a particularized harm, not whether he also alleged a concrete one. Spokeo , 136 S.Ct. at 1545 ; see also id. at 1548 ("We have made it clear time and time again that an injury in fact must be both concrete and particularized."). In remanding to the Ninth Circuit to consider "whether the particular procedural violations alleged in th [e] case [were] ... sufficient to meet the concreteness requirement," id. at 1550, the Supreme Court observed that "Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right." Id. at 1549. To the contrary: Article III standing requires a "de facto " injury, that is, one that is "real, and not abstract."³ Id. at 1548 (citations omitted).

Spokeo 's limitation on Article III standing for claims arising out of statutory violations is inapplicable to the instant case for at least two reasons. First, Spokeoinvolved allegations of intangible harm resulting from statutory violations. Id. ; cf. Nicklaw v. Citimortgage, Inc. , 839 F.3d 998, 1003 (11th Cir. 2016) (applying Spokeo to reject the argument that "the intangible harm that occurs when the discharge of a mortgage is not timely recorded constitutes a concrete injury" (emphasis added)). At least some of the particularized harm alleged in Plaintiff's Complaint—loss of toner and paper and the unwanted temporary occupation of Plaintiff's fax machine and telephone line—is tangible in nature. Such tangible harm, as Palm Beach leaves clear, is sufficient for standing purposes, even if de minimis . See Prindle v. Carrington Mortg. Servs., LLC , No. 3:13–CV–1349–J–34PDB, 2016 WL 4369424, at *9 n.11 (M.D. Fla. Aug. 16, 2016) ("Through the TCPA, Congress elevated a tangible, albeit de minimis, injury [of the unauthorized occupation of one's fax machine] to the status of a legally cognizable injury."); see also Fauley v. Drug Depot, Inc. , No. 15 C 10735, ––– F.Supp.3d ––––, ––––, 2016 WL 4591831, at *3 (N.D. Ill. Aug. 31, 2016) (observing that "de minim[i]s harm arguments do not undermine Article III standing" and concluding that the loss of toner and paper is "sufficiently ‘real’ to meet the concreteness requirement under Spokeo ").

Second, the injuries alleged in Plaintiff's Complaint are not mere "procedural" statutory violations; rather, they are precisely the kinds of harm the TCPA aims to prevent. See Palm Beach , 781 F.3d at 1252 (observing that the occupation of one's "fax machine is among the injuries intended to be prevented by the [TCPA]"); see also H.R. REP. 102–317, 10 ("[Fax] telemarketing is problematic for two reasons. First, it shifts some of the costs of advertising from the sender to the recipient. Second, it occupies the recipient's facsimile machine so that it is unavailable for legitimate business messages while processing and printing the junk fax."). The violation of a statutorily-protected substantive right, in turn, causes "real" harm, as opposed to harm that is "hypothetical" or "uncertain."⁴ Church v. Accretive Health, Inc. , No. 15–15708, 654 Fed.Appx. 990, –––– & n.3, 2016 WL 3611543, at *3 & n.3 (11th Cir. July 6, 2016) (per curiam) (not receiving information to which one is statutorily entitled is a "concrete" injury); cf. Guarisma v. Microsoft Corp. , No. 15–24326–CIV, ––– F.Supp.3d ––––, ––––, 2016 WL 4017196, at *4 (S.D. Fla. July 26, 2016) (plaintiff whose sales receipt showed more than last five credit-card digits alleged a concrete harm under the Fair and Accurate Credit Transactions Act (FACTA) since, "in enacting the FACTA, Congress created a substantive right for consumers to have their personal credit card information truncated on printed receipts," not merely a "procedural requirement for credit card-using companies to follow"). Accordingly, dismissal of Plaintiff's Complaint on standing grounds is not warranted.

B. Whether the Complaint Adequately States a Claim Against Banner and William Penn

The Underwriter Defendants alternatively seek dismissal of Plaintiff's suit against them pursuant to Rule 12(b)(6), arguing that the Complaint lacks sufficient factual allegations tying them directly or vicariously to the Fax's creation or dissemination. The TCPA makes it "unlawful for any person... to use any telephone facsimile...