9th Circuit Finds Standing for Businesses Under the TCPA

On October 12, a Ninth Circuit panel reversed a district court’s dismissal of a lawsuit brought under the Telephone Consumer Protection Act (TCPA) by several home improvement contractors against a home services platform that allegedly sent over 7,500 unwanted text messages to the contractors.  The Ninth Circuit found Article III standing for the businesses’ claims, and held that the contractors had statutory standing because the TCPA allows both persons and entities to pursue damages, and because there is a presumption that numbers used for both residential and business purposes are residential numbers for the purposes of the TCPA.

First, the Ninth Circuit held that the contractors had constitutional standing because they suffered the precise injury identified by Congress in the TCPA—receiving unsolicited phone calls or text messages. The Ninth Circuit rejected the defendants’ argument that the contractors consented to the automated text messages when they posted their phone numbers online in advertisements to potential clients. The court found that the plaintiffs’ advertisements did not amount to express consent to receive text messages from the defendant, who was not a potential client but rather sought to sell information about potential clients.

Second, the court found that the TCPA prohibits autodialed calls to the cellphones of businesses as well as individuals. The court reasoned that the TCPA’s broad language— which allows any “person or entity” to seek monetary damages or obtain injunctive relief—includes business entities, such as the home improvement contractors.

Finally, the court found statutory standing for the plaintiffs who alleged violations of the TCPA’s restriction on calls to residential telephone subscribers who have registered their numbers on the national do-not-call registry, even though the plaintiffs used the numbers for both business and residential purposes.  The court concluded that there could be liability under the TCPA for calls to such numbers, based primarily on a 2003 FCC order declining to exempt “home-based businesses” from the law’s purview.  The Ninth Circuit agreed with the majority of district court holdings on the issue that there is a presumption that mixed-use numbers are residential, but that the presumption may be rebutted on a case-by-case basis, with the burden of proof placed on the caller.