Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A.

771 F.3d 1274

PALM BEACH GOLF CENTER–BOCA, INC., a Florida corporation, individually and on behalf of all others similarly situated, Plaintiff–Appellant,

v.John G. SARRIS, D.D.S., P.A., a Florida corporation, Defendant–Appellee.

No. 13–14013.

United States Court of Appeals, Eleventh Circuit.

Oct. 30, 2014.

Background: Purported recipient of unsolicited fax advertisement for dental practice filed putative class action in state court against dental practice, alleging violation of Telephone Consumer Protection Act (TCPA) and conversion under Florida law. After removal, the United States District Court for the Southern District of Florida, No. 9:12–cv–80178–KMW, Kathleen M. Williams, J., 981 F.Supp.2d 1239, granted summary judgment to dental practice. Purported fax recipient appealed.

Holdings: The Court of Appeals, Richard K. Eaton, United States Court of International Trade Judge, sitting by designation, held that:

(1) putative fax recipient satisfied injury requirement for Article III standing;

(2) the TCPA, as a bounty statute, provides Article III standing for actions by private individuals;

(3) a person on whose behalf an unsolicited fax advertisement is transmitted can be directly liable under the TCPA;

(4) Federal Communications Commission's (FCC) interpretation of undefined and ambiguous term “to send” in the TCPA was entitled to Chevron deference;

(5) under Florida law as predicted by the district court, the minimal value of the converted property did not preclude conversion claim; and

(6) Florida's strict pleading requirement for a theory of vicarious liability was not applicable in federal court.

Reversed and remanded.

Robert L. Hinkle, District Judge, sitting by designation, filed an opinion concurring in part and dissenting in part.Phillip Andrew Bock, Daniel J. Cohen, Bock & Hatch, LLC, Chicago, IL, Ryan Michael Kelly, David Max Oppenheim, Brian J. Wanca, Anderson Wanca, Rolling Meadows, IL, Gregory S. Weiss, Cohen Milstein Sellers & Toll, PLLC Palm Beach Gardens, FL, for Plaintiff–Appellant.

Michael Resis, Molly Arranz, Eric Samore, SmithAmundsen, LLC, Chicago, IL, Kevin David Franz, William Stuart Reese, Lane Reese Summers Ennis & Perdomo, PA, Coral Gables, FL, for Defendant–Appellee.

Appeal from the United States District Court for the Southern District of Florida. D.C. Docket No. 9:12–cv–80178–KMW.

Before MARTIN, Circuit Judge, and EATON,^* Judge, and HINKLE, ^** District Judge.

EATON, Judge:

On December 13, 2005, Plaintiff Palm Beach Golf Center–Boca, Inc. received an unsolicited one-page fax advertisement, promoting dental services provided by Defendant John G. Sarris, D.D.S., P.A., a Florida dental practice. Thereafter, Palm Beach Golf brought a class action suit against Sarris, D.D.S., claiming that the fax advertisement violated the Telephone Consumer Protection Act of 1991 (“TCPA”), 47 U.S.C. § 227(b)(3) (2006), and gave rise to common law claims for conversion. The District Court granted summary judgment in favor of Defendant by minute entry on August 2, 2013, immediately following oral argument.

Palm Beach Golf filed an interlocutory appeal of the minute entry, and subsequently, the District Court issued its written decision on October 22, 2013 and entered final judgment in favor of Sarris, D.D.S. After careful review, we reverse and remand for further proceedings.

I.

In 2003, Dr. John G. Sarris,¹ owner of Defendant dental practice John G. Sarris, D.D.S., P.A., hired a marketing manager and gave him “free rein” to market the dental practice. Two years later, this marketing manager was solicited by Business to Business Solutions (“B2B”), which offered to send out mass fax advertisements. After receiving payment of $420.00 from Sarris, D.D.S.,² B2B sent 7,085 successful transmissions of an advertisement promoting the dental practice. Among these was the December 13, 2005 transmission to Plaintiff Palm Beach Golf, a golf equipment store. Despite its successful transmission to Plaintiff, no employee of Palm Beach Golf could recall actually seeing or printing the fax advertisement. Rather, the evidence that the advertisement was transmitted by B2B, and received by Palm Beach Golf, is the Expert Report, which confirms the successful fax transmission, taking one minute of connection time, made to Plaintiff's fax machine.

In granting summary judgment for Defendant, the District Court held that Palm Beach Golf could only prevail under the TCPA on a theory of vicarious liability. That is, the District Court held that Sarris, D.D.S. was liable, if at all, only for the acts of its marketing manager, and then only if it were established that he was an employee acting within the scope of his employment. The District Court reached this conclusion by interpreting a Federal Communications Commission (“FCC”) declaratory ruling to mean that “a party is not directly liable for a TCPA violation unless it actually transmits a fax, but the party may be vicariously liable under federal common law principles of agency for the actions of a [third party].” In addition, the District Court determined that, because Palm Beach Golf had failed to plead a theory of vicarious liability in its complaint, a heightened pleading requirement under Florida law, its claim was defective.³

Despite reaching the merits of Palm Beach Golf's TCPA claim, the District Court further held that Palm Beach Golf lacked Article III standing, because it was unable to demonstrate that it had suffered an injury in fact. The District Court concluded that “nowhere in the statute does Congress express an intent to circumvent the requirement that a plaintiff have Article III case-or-controversy standing to bring a claim, which requires that the plaintiff demonstrate a distinct and palpable injury to himself.” Because there was no evidence that any employee of Plaintiff's saw or printed the transmitted fax, the District Court concluded that Palm Beach Golf was unable to demonstrate that it had suffered a sufficiently concrete injury to establish standing under Article III.

Moreover, the District Court considered the three theories of vicarious liability (actual approval, apparent approval, and ratification), and concluded that, even if Palm Beach Golf had specifically pled vicarious liability, none of these theories were supported by facts on the record.

As to Palm Beach Golf's state law conversion claim, this was dismissed by the District Court upon finding (1) that the property allegedly converted (i.e., toner, ink, paper, and employee time) was de minimis, (2) that Plaintiff could not show that any property was converted because it had failed to provide any evidence that the fax was printed by its machine, and (3) that, here, too, Palm Beach Golf had failed to satisfy Florida's pleading requirements, having omitted a claim of vicarious liability from its complaint.

II.

A.

Because the question of Palm Beach Golf's Article III standing “implicates our subject matter jurisdiction, [it] accordingly must be addressed as a threshold matter” prior to the merits of its underlying claims. Nat'l Parks Conservation Ass'n v. Norton, 324 F.3d 1229, 1242 (11th Cir.2003) (citing Juidice v. Vail, 430 U.S. 327, 331, 97 S.Ct. 1211, 1215, 51 L.Ed.2d 376 (1977)).

Palm Beach Golf insists that it was error for the District Court to hold that, because it failed to prove that the fax was printed or seen, it lacked Article III standing. For Plaintiff, the specific injury targeted by the TCPA is the sending of the fax and resulting occupation of the recipient's telephone line and fax machine, not that the fax was actually printed or read. We agree.

“Article III of the Constitution confines the reach of federal jurisdiction to ‘Cases' and ‘Controversies.’ ” Alabama–Tombigbee Rivers Coal. v. Norton, 338 F.3d 1244, 1252 (11th Cir.2003) (quoting U.S. Const. art. III, § 2). In order “[t]o establish Article III standing, an injury must be ‘concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.’ ” Clapper v. Amnesty Int'l USA, ––– U.S. ––––, 133 S.Ct. 1138, 1147, 185 L.Ed.2d 264 (2013) (quoting Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149, 130 S.Ct. 2743, 2752, 177 L.Ed.2d 461 (2010)). Although Congress may not convert a generalized grievance “into an ‘individual right’ vindicable in the courts,” Lujan v. Defenders of Wildlife, 504 U.S. 555, 576–77, 112 S.Ct. 2130, 2144–45, 119 L.Ed.2d 351 (1992), “Congress may create a statutory right or entitlement[,] the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute.” Warth v. Seldin, 422 U.S. 490, 514, 95 S.Ct. 2197, 2213, 45 L.Ed.2d 343 (1975) (citing Linda R.S. v. Richard D., 410 U.S. 614, 617 n. 3, 93 S.Ct. 1146, 1148 n. 3, 35 L.Ed.2d 536 (1973)). In other words, “[t]he actual or threatened injury required by Art[icle] III may exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing.’ ” Id. at 500, 95 S.Ct. 2197, 95 S.Ct. at 2206 (citation omitted) (quoting Linda R. S., 410 U.S. at 617 n. 3, 93 S.Ct. at 1148 n. 3).

We review de novo a dismissal for lack of Article III standing, CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1268 (11th Cir.2006) (citing Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.2005)), and “[t]he party invoking federal jurisdiction bears the burden of establishing these elements.” Lujan, 504 U.S. at 561, 112 S.Ct. at 2136 (citations omitted). Palm Beach Golf has two bases for Article III standing, either of which is sufficient to satisfy the injury requirement. First, it has suffered a concrete and personalized injury in the form of the deprivation of the use of its fax machine for the period of time required for the electronic transmission of the data (which, in this case was one minute).

Generally, a legal interest sufficient to...