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Court Nixes Hired Investigator’s Telephone Consumer Protection Act Claim for Lack of Standing

Posted: March 20, 2020
Industries: Financial Services

While the TCPA often feels limitless in its scope, one New Jersey District Court recently dismissed a putative class action brought by an investigator hired by an attorney to prepare potential TCPA claims.1 The plaintiff, Mark Leyse, was paid $60 an hour to place investigative calls to various companies and gather facts for potential TCPA actions. During those calls, Leyse gave a false name and asked about the number of calls the company placed per day. Leyse secretly recorded the calls and provided them to his attorney who would then file TCPA claims using the information Leyse obtained in his investigations.   

Leyse’s claims against Bank of America arose from a single, prerecorded call he received from DialAmerica Marketing, Inc. on behalf of Bank of America in 2005. Leyse was a Bank of America customer at the time and had been for ten years. DialAmerica did not have a representative available to handle the call after the prerecorded message played, so the call was abandoned. After receiving the initial call, Leyse placed more than 20 calls to DialAmerica inquiring about the services it provided, the dialing system it used to make calls, and the number of recordings it left each day. Leyse gave a false name, secretly recorded the calls, and then provided them to his attorney. Leyse twice declined DialAmerica’s invitation to be added to its do-not-call list. 

Leyse only sought statutory damages from Bank of America, and did not allege that DialAmerica’s initial call was a nuisance, annoyance, or inconvenience—the usual grounds for standing under the TCPA. In its motion for summary judgment, Bank of America argued that Leyse lacked both constitutional standing under Article III and statutory standing. The court agreed, holding that Leyse had not shown an injury in fact because he did not plead that the single call from DialAmerica caused him nuisance, annoyance, inconvenience, wasted time, or invasion of privacy. Nor could he, because he ultimately “welcomed” the calls in his role as a paid investigator helping his counsel prepare TCPA claims. The court held that no other inference could be drawn from the record when Leyse placed 20 plus subsequent calls to DialAmerica, provided a false name and employer, recorded the calls and submitted them to his counsel, and significantly, twice declined to be added to DialAmerica’s do-not-call list. Accordingly, Leyse did not have standing because he asserted only a bare procedural violation of the TCPA that did not result in actual or imminent harm. Leyse lacked statutory standing for the same reasons, because he did not claim to have suffered any nuisance or invasion of privacy, but rather welcomed and consented to the calls. Further, the court held that even if Leyse did have standing, he had an “established business relationship” under a then-existing FCC Order that stated that financial agreements, including bank accounts, constituted an ongoing business relationship that allowed companies to contact consumers.    

In the narrow but surprisingly common case where a plaintiff takes affirmative steps to instigate calls and investigate a cause of action to support a TCPA claim, Leyse confirms that standing remains a viable defense—particularly where the plaintiff is unable to show a nuisance, annoyance, or other concrete harm as a result of the call.

 


1 Leyse v. Bank of America, Civil Action No. 11-7128 (SDW) (SCM), 2020 WL 1227410  (D.N.J. Mar. 13, 2020).