Gorss Motels, Inc. v. Lands' End, Inc.
997 F.3d 470
| 2d Cir. | 2021Background
- Gorss Motels operated a Super 8 franchise under a Wyndham franchise agreement that required or encouraged purchasing from Wyndham‑approved suppliers and allowed Wyndham (and its affiliates, including WSSI) to offer purchasing assistance.
- As part of renewal and ongoing franchise administration, Gorss periodically provided Wyndham its fax number and, prior to 2014, had received similar supplier faxes and did not opt out.
- Lands’ End became a Wyndham‑approved supplier, drafted fax advertisements for Wyndham franchisees, Wyndham edited and routed the faxes to contractors for distribution, and Lands’ End’s faxes were sent to Gorss in 2015 and 2016. The faxes lacked a TCPA‑compliant opt‑out notice.
- Gorss sued Lands’ End under the TCPA claiming the faxes were unsolicited; the district court granted summary judgment to Lands’ End, holding Gorss had given “prior express invitation or permission” via its franchise agreements.
- On appeal the Second Circuit affirmed: it held Gorss had Article III standing and that the franchise agreement/relationship constituted prior express permission to receive the category of faxes at issue, and that that permission extended to the faxes here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Article III | No concrete injury because Gorss collected faxes for litigation and didn’t rely on opt‑out notices | Receiving unsolicited faxes causes nuisance, privacy invasion, and consumes fax resources — a concrete injury | Court: Gorss has standing; receipt of unsolicited faxes is a concrete, redressable injury |
| Whether franchise agreement constituted “prior express invitation or permission” under TCPA §227(a)(5) | Providing a fax number in a business relationship is not enough; must affirmatively and explicitly agree to receive fax ads and to receive them by fax | Franchise agreement and disclosure told franchisees WSSI/Wyndham would offer purchasing assistance from approved suppliers and Gorss provided its fax number — clear prior permission | Court: Agreement and course of dealing clearly and unmistakably granted prior express permission to receive such supplier fax advertisements |
| Whether permission to Wyndham extends to Lands’ End (who advertised) | Any permission was only to Wyndham; Lands’ End (whose goods were advertised) is the sender, and consent doesn’t transfer to third parties | Wyndham orchestrated, edited, routed, and benefited from the faxes; Lands’ End acted as an approved supplier working with Wyndham/WSSI, so permission covers these faxes | Court: Permission covered faxes advertising approved‑supplier goods sent on Wyndham’s behalf — Lands’ End’s faxes fall within the consent given |
| Applicability of A‑S Medication (Seventh Circuit) and transferability of consent | Cites A‑S Medication: consent must be affirmative, explicit, ongoing; consent is not transferable | Facts here differ: Gorss expressly agreed to receive purchasing communications from Wyndham/WSSI about approved suppliers (not a purchased database) | Court: A‑S is distinguishable; follows Latner, Third and Eleventh Circuit decisions that consent can be shown by provision of number plus agreement to receive purchasing communications |
Key Cases Cited
- Melito v. Experian Mktg. Sols., Inc., 923 F.3d 85 (2d Cir. 2019) (unsolicited text messages cause concrete privacy/nuisance injuries for standing)
- Palm Beach Golf Ctr.-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th Cir. 2015) (occupation/use of fax machine and supplies are injuries the TCPA targets)
- Latner v. Mount Sinai Health Sys., Inc., 879 F.3d 52 (2d Cir. 2018) (prior express consent can be deduced from provision of contact info plus agreed uses)
- Physicians Healthsource, Inc. v. Cephalon, Inc., 954 F.3d 615 (3d Cir. 2020) (prior express permission may be inferred from voluntary provision of number for related follow‑up)
- Physicians Healthsource, Inc. v. A-S Medication Sols., LLC, 950 F.3d 959 (7th Cir. 2020) (contrasting test: requires affirmative, explicit, ongoing permission and limits transferability)
- Gorss Motels, Inc. v. Safemark Sys., LP, 931 F.3d 1094 (11th Cir. 2019) (similar franchise‑consent facts: franchisees agreed to receive purchasing information from franchisor affiliates)
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71 (2006) (presumption that identical statutory language carries consistent meaning across provisions)