In Telephone Science Corporation v. Asset Recovery Solutions, the United States District Court for the Northern District of Illinois recently held that Telephone Science Corporation (“TSC”), a telecommunications company, did not have standing to pursue its Telephone Consumer Protection Act claims against Asset Recovery Solutions, LLC (“ARS”), a debt collection company.
TSC operates a service called “Nomorobo” designed to help consumers avoid incoming robocalls. In addition to providing this service to consumers, TSC also maintains a “honeypot” group of telephone numbers from which TSC is able to gather information related to inbound calls. The “honeypot” is comprised of thousands of telephone numbers to which TSC subscribes. According to TSC, ARS began calling telephone numbers in the TSC honeypot using a predictive dialer. Between March 2014 and February 2016, ARS allegedly placed more than 12,000 robocalls to these numbers. TSC filed suit against ARS in June 2015 under the TCPA.
In August 2016, the Court granted ARS’ motion to dismiss, finding that TSC’s Second Amended Complaint failed to satisfy the “zone-of-interests” test under the TCPA and, accordingly, TSC lacked statutory standing to pursue its claims. The Court concluded that “the sole reason TSC subscribes to ‘thousands’ of honeypot numbers is to gather a ‘large quantity of data.’” The calls were therefore not “unwanted and unwelcome.”
TSC subsequently moved to alter the Court’s opinion under Rule 59(e) and sought leave to file a third amended complaint. TSC wanted to argue that the ARS robocalls at issue “serve no useful purpose to TSC and are, therefore, unwanted and a nuisance.” On January 5, 2017, the Court denied TSC’s motion, reiterating that “a telecommunications service provider interested in commercial data collection for its customer-service offerings – does not fall ‘within the class of plaintiffs whom Congress has authorized to sue’ under the TCPA.”
TSC is expected to appeal the decision. We will continue to monitor the case for developments.