Olivia Hoffman

Eleventh Circuit Rules: Receiving Text Message Was Not Injury Under the TCPA

By: Olivia Hoffman

Text MessageThe Eleventh Circuit recently decided a case that raised the bar for pleading injury under the Telephone Consumer Privacy Act (TCPA), 47 U.S.C. § 227, noting its disagreement with an earlier decision from the Ninth Circuit on the same issue and creating a possible roadblock for future plaintiff classes seeking to assert claims under the TCPA.

In Salcedo v. Hanna, the Eleventh Circuit held that “receiving a single unsolicited text message” in violation of the TCPA was not a “concrete injury” sufficient to confer standing on the plaintiff.[1]  The case arose out of a text message that plaintiff John Salcedo received from his former attorney, defendant Alex Hanna, offering Salcedo a discount on Hanna’s services.  According to Salcedo, receiving the text message “caused [him] to waste his time answering or otherwise addressing the message” and “resulted in an invasion of [his] privacy and right to enjoy the full utility of his cellular device.”[2]  Salcedo filed a class action complaint in the Southern District of Florida on behalf of a class of former clients of Hanna who had received similar unsolicited text messages.  Salcedo demanded statutory damages of $500 per text message and treble damages of $1,500 per text message for knowing or willful violations of the statute.

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Supreme Court to Examine Cy Pres Remedy in Google Privacy Case

SCOTUSBy Olivia G. Hoffman

Last month, the Supreme Court granted certiorari to review a decision of the Ninth Circuit approving an $8.5 million class action settlement in which the majority of the settlement proceeds took the form of a cy pres award.  Cy pres—which comes from a French expression meaning “as near as possible”—is an equitable doctrine that allows a court to direct unclaimed or non-distributable funds awarded as part of a class action settlement “to an entity whose interests lie ‘as near as possible’ to that group,” i.e., to a charity that advances interests related to those pursued by the plaintiff class in the lawsuit.[1]

The case, Frank v. Gaos, No. 17-961, involves a pre-certification settlement of a class action against Google for alleged violations of the federal Stored Communications Act and California privacy laws.  The district court approved the settlement, which allocated approximately $3.2 million to the plaintiffs’ attorneys, administrative costs, and the named plaintiffs, and awarded the remaining $5.3 million to six not-for-profit cy pres recipients that had submitted proposals detailing the ways in which they planned to use the proceeds to promote internet privacy initiatives.[2]  On appeal, the Ninth Circuit affirmed the district court’s decision that the settlement was “fair, adequate, and free from collusion.”[3]  It noted that while cy pres-only settlements are “the exception, not the rule[,]” such a settlement was appropriate here, where there were approximately 129 million class members, each of whom would have been entitled to a mere 4 cents.[4]  Moreover, the panel held that the district court did not abuse its discretion by approving the selection of the cy pres recipients, notwithstanding objectors’ claims that, among other things, defendant Google and class counsel had “significant prior affiliations” with the recipient organizations.[5]  Finally, the Ninth Circuit upheld the reasonableness of the $2.125 million award to class counsel, which the district court had determined to be acceptable under either the percentage-of-recovery or lodestar method.[6]

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The FAA and NLRA Go Head to Head in Epic Systems

AgreementBy Olivia Hoffman and Katie Rosoff

The Supreme Court first approved the use of mandatory arbitration provisions in employment contracts in 1991 in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991), which held that a securities broker could be compelled to arbitrate a federal age discrimination claim against his employer under the Federal Arbitration Act (“FAA”).  In the years since, arbitration agreements have proliferated in employment and consumer contracts, and legal challenges to the validity of these agreements have been largely unsuccessful.  While the general policy in favor of arbitration remains strong, it comes into potential conflict with the National Labor Relations Act (“NLRA”) in the case of Epic Systems Corp. v. Lewis, which the Supreme Court will decide this term. 

The case presents the question of whether mandatory individual (i.e., non-class) arbitration agreements in employment contracts violate the NLRA, which protects the right of workers to bargain collectively.  Three circuit courts have weighed in, with the Seventh and Ninth Circuits holding in Lewis v. Epic Systems Corporation, 823 F.3d 1147 (7th Cir. 2015) and Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), respectively, that a ban on litigating or arbitrating on a class basis violates the NLRA’s collective bargaining guarantee, and the Fifth Circuit coming to the opposite conclusion in Murphy Oil USA, Inc.  v. NLRB, 808 F.3d 1013 (5th Cir. 2015).  Each of these cases arose when employees filed class action lawsuits against their employers based on labor law violations and the employers moved to compel arbitration. 

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On Remand, Ninth Circuit in Spokeo Says Alleged FCRA Violation Is Enough

Supreme Court iStock_000017257808LargeBy Olivia Hoffman

On August 15, 2017, the Ninth Circuit ruled in Robins v. Spokeo[1] (“Spokeo II”) that the violation of a consumer’s statutory rights under the Fair Credit Reporting Act (“FCRA”) was sufficient to constitute “injury-in-fact” for the purpose of establishing Article III standing. The case involved claims brought by a consumer under the FCRA alleging that Spokeo—an online search engine that compiles and publishes data about individuals including their employment information, education, names of family members and marital status—had published false information about him. As discussed previously on this blog, the Supreme Court in 2016 remanded the case after determining that the Ninth Circuit had failed to properly consider the “concreteness” component of the “injury-in-fact” requirement. In its opinion, the Supreme Court emphasized that a procedural statutory violation alone would not necessarily suffice and that a concrete injury must be “real” and not merely “abstract.”[2]

In Spokeo II, the Ninth Circuit zeroed in on the question of whether an FCRA violation represents the type of statutory violation that can itself constitute a cognizable injury, notwithstanding the Supreme Court’s admonition that a plaintiff does not “automatically satisf[y] the injury-in-fact requirements whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”[3]

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