On Wednesday, a partly divided Ninth Circuit Court of Appeals panel ruled in favor of 51 home improvement contractors who alleged violations of the Telephone Consumer Protection Act (TCPA) by defendants GoSmith Inc., Porch.com Inc., which acquired GoSmith, and three corporate officers.
The appellate tribunal reversed the lower court’s dismissal after finding that the plaintiffs, who used their cell phones for business and personal use, had standing to bring the automatic telephone dialing system (ATDS) use and do-not-call registry TCPA claims.
The 56-page opinion explained that GoSmith’s and Porch.com’s business model involves selling client leads to home improvement contractors for plumbing, landscaping, painting, and other home improvement services. Between 2012 and 2019, GoSmith allegedly scraped websites such as Yelp.com, YellowPages.com, and BBB.org for the contact information of over 10 million home improvement contractors, stored that information in a database, then sent automated text messages to contractors who had cell phone numbers.
Reportedly, and wholly without consent, GoSmith sent over 7,500 text messages to plaintiffs’ cell phone numbers using an ADTS. Though 15 of the plaintiffs had registered their numbers on the national do-not-call registry, they still received 2,754 text messages from GoSmith.
The home contractor plaintiffs sued in the District of Idaho in 2020. The district court dismissed for want of statutory standing and the plaintiffs timely appealed.
This week’s opinion examined the plaintiffs’ constitutional and TCPA standing. As to the former, the decision reasoned that because the plaintiffs did not expressly consent to receiving text messages from GoSmith, which sought to sell information about potential clients, their alleged injuries were particularized.
Turning to the crux of the appeal, whether the plaintiffs had statutory standing under a subsection of the TCPA, the court ruled that because the provision includes not only persons but entities, the plaintiffs qualify as “residential subscribers” because they use their cell phones both for personal calls.
In the absence of Federal Communications Commission (FCC) guidance as to when a mixed-use phone ceases to become a residential phone or a business phone, the panel concluded that the home contractors’ registered cell phones were presumptively “residential” within the meaning of the subsection.
In a partial dissent, Judge Ikuta wrote that the majority was inappropriately stepping into the FCC’s shoes and creating its own regulatory framework for determining whether a cell phone is actually a “residential telephone,” instead of deferring to the agency’s narrower test.
Addressing the dissent in a concurrence, Judge Bress disagreed with Judge Ikuta. Instead, the concurrence ventured that the majority reached the correct decision based on FCC guidance, the conclusions of other courts, and common sense. “The dissent is long on accusations but comes up short in interpreting the very FCC rulings that it uses as its mantle,” Judge Bress commented.
The plaintiff-appellants are represented by LawHQ PC and the defendant-appellees by Manatt, Phelps & Phillips LLP and Greenberg Glusker Fields Claman & Machtinger LLP.
