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Horton v. Southwest Medical Consulting, LLC

United States District Court, N.D. Oklahoma

July 10, 2017

DR. SAM LEBARRE HORTON, Plaintiff,
v.
SOUTHWEST MEDICAL CONSULTING, LLC, et al., Defendants.

          OPINION AND ORDER

          CLAIRE V. EAGAN UNITED STATES DISTRICT JUDGE

         Now before the Court are defendant Molina Healthcare, Inc.'s (Molina) motion to dismiss (Dkt. # 9) and defendant Southwest Medical Consulting, LLC's (Southwest Medical) motion to dismiss (Dkt. # 29). Defendants ask the Court to dismiss plaintiff's claims for lack of standing pursuant to Federal Rule of Procedure 12(b)(1).[1] Plaintiff responds that he has alleged concrete injuries in his complaint that establish standing. Dkt. # 19, at 1; Dkt. # 31.

         I.

         This case arises from a three-page facsimile (fax) transmission. Plaintiff alleges that, on or about January 23, 2017, he received a fax transmission advertising Molina's healthcare services. Dkt. # 2, at 27. The fax includes contact information for employees of Molina and Southwest Medical. Dkt. #2, at 36-37. Plaintiff asserts that he did not invite or give defendants permission to send him a fax and that there was no preexisting business relationship between plaintiff and either Molina or Southwest Medical. Id. at 28. Plaintiff also asserts that the fax did not include an “opt out” provision that would inform the recipient of the ability and means to avoid future unsolicited faxes. Id.

         Plaintiff filed a class action complaint[2] in the District Court of Rogers County, Oklahoma, asserting that defendants committed common law conversion and violated the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 (TCPA), by sending an unsolicited fax that failed to include an opt-out provision. Dkt. # 2, at 32-34. Plaintiff's complaint asserts that he has “suffered actual injury in that by sending the unsolicited fax transmission . . ., Defendants caused [him] to incur costs such as wasted paper, ink toner, occupied telephone line, and the time and expense incurred in receiving, reviewing, and disposing of the fax transmission[].” Id. at 30. Molina removed the suit to this Court. Dkt. # 2, at 1. Defendants now move to dismiss plaintiff's claims against them for lack of standing.

         II.

         Federal courts are courts of limited jurisdiction and, as the party seeking to invoke federal jurisdiction, plaintiff bears the burden of proving such jurisdiction is proper. See Southway v. Cent. Bank of Nigeria, 328 F.3d 1267, 1274 (10th Cir. 2003). A court lacking jurisdiction “cannot render judgment but must dismiss the case at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). Motions to dismiss under Rule 12(b)(1) “generally take one of two forms. The moving party may (1) facially attack the complaint's allegations as to the existence of subject matter jurisdiction, or (2) go beyond allegations contained in the complaint by presenting evidence to challenge the factual basis upon which subject matter jurisdiction rests.” Merrill Lynch Bus. Fin. Servs., Inc. v. Nudell, 363 F.3d 1072, 1074 (10th Cir. 2004) (internal citation and quotations omitted). Here, defendants have facially attacked the sufficiency of the complaint's allegations as to the existence of subject matter jurisdiction. Where a motion to dismiss is based on a facial attack, courts “apply the same standards under Rule 12(b)(1) that are applicable to a Rule 12(b)(6) motion to dismiss for failure to state a cause of action.” Muscogee (Creek) Nation v. Okla. Tax Comm'n, 611 F.3d 1222, 1227 n.1 (10th Cir. 2010).

         III.

         Defendants argue that this suit should be dismissed because plaintiff lacks standing. Dkt. ## 9, at 1. Article III restricts federal courts to the adjudication of “cases or controversies.” U.S. Const. art. III, § 2, cl. 1. “The standing inquiry ensures that a plaintiff has a sufficient personal stake in a dispute to ensure the existence of a live case or controversy which renders judicial resolution appropriate.” Tandy v. City of Wichita, 380 F.3d 1277, 1283 (10th Cir. 2004). To establish Article III standing, plaintiff must establish that: (1) he has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of defendants; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by the relief requested. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000); Tandy, 380 F.3d at 1283. The party seeking to invoke federal jurisdiction bears the burden of establishing all three elements of standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Defendants argue that plaintiff lacks standing for two reasons. First, defendants assert that plaintiff has not alleged a concrete injury in fact. Dkt. # 9, at 6-9. Second, defendants assert that, even if plaintiff has asserted a concrete injury in fact, it is not fairly traceable to the defendants' alleged actions. Id. at 10-11.

         A.

         The parties' arguments regarding whether plaintiff has stated a concrete injury center on the Supreme Court's recent decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), and lower federal courts' interpretations of that decision in the context of the TCPA. In Spokeo, the plaintiff, Thomas Robins, asserted a claim under the Fair Credit Reporting Act of 1970, 15 U.S.C. § 1681 et seq. (FCRA). Id. at 1544. The FCRA seeks to ensure “fair and accurate credit reporting” by imposing requirements on the creation and use of consumer reports. Id. at 1545 (citing 15 U.S.C. § 1681). The defendant, Spokeo, operates a web site that provides to users detailed information such as addresses, phone numbers, finances, and shopping habits about other individuals based on information Spokeo gathers from a wide spectrum of databases. Id. at 1546. Robins discovered that Spokeo had created a report about him that contained inaccurate information and filed a class action complaint alleging that Spokeo willfully failed to comply with the FCRA. Id. The district court dismissed Robins's suit, finding that he had not properly pled an injury in fact. Id. The Ninth Circuit reversed, holding that Robins asserted a sufficiently particularized injury in fact to confer standing. Id.

         The Supreme Court reversed the Ninth Circuit's decision because it failed to consider whether Robins had asserted a concrete injury in fact. The Supreme Court explained that a plaintiff must show that his injury is concrete and particularized. Id. at 1548. The Ninth Circuit had assumed that Robins's injury was concrete because he stated a violation of a statutory right, but the Supreme Court held that “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. at 1549. Applied to the FCRA, the Supreme Court found that alleging a bare procedural violation of the FCRA was insufficient to show a concrete injury because such a violation may result in no harm. As the Supreme Court explained:

For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency's consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.

Id. at 1550. The Supreme Court remanded the case in order for the Ninth Circuit to address the question of whether Robins's allegations were sufficient to show a ...


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