Melito v. Experian Mktg. Solutions, Inc.
923 F.3d 85
| 2d Cir. | 2019Background
- Plaintiffs received unsolicited promotional text messages sent from or on behalf of American Eagle Outfitters (AEO) and sued under the Telephone Consumer Protection Act (TCPA), alleging no injury beyond receipt of the texts.
- Plaintiffs and AEO reached a class settlement: $14.5 million fund for ~618,300 unique phone numbers; notices sent and opt-outs/objections allowed.
- Experian Marketing Solutions (third-party defendant) objected to class certification, arguing Plaintiffs lacked Article III standing under Spokeo because they alleged only a bare statutory violation.
- Class member Kara Bowes objected to the settlement as inadequate and complained about notice, releases, incentive awards, and withheld discovery.
- The district court approved the settlement, certified the settlement class, held that receipt of unsolicited texts constitutes a concrete injury under Spokeo, and found the settlement fair; Experian and Bowes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's/ Objector's Argument | Held |
|---|---|---|---|
| Standing — Article III injury-in-fact under Spokeo | Receipt of unsolicited spam texts is the concrete privacy/nuisance injury Congress identified in the TCPA | Experian/Bowes: a bare statutory violation without additional harm is not a concrete injury | Held: Receipt of unsolicited texts is a concrete, particularized injury; Plaintiffs have standing |
| Experian's standing to appeal as nonsettling third-party defendant | N/A (Plaintiffs sought settlement approval) | Experian: as third-party defendant it can appeal certification because it may be prejudiced in indemnity/third-party claims | Held: Experian lacks standing to appeal the settlement approval now; may challenge in a later appeal from a final third-party judgment |
| Class certification / ascertainability | Plaintiffs: class is ascertainable and satisfies Rule 23; notice adequate | Experian: class unascertainable; not all class members received ATDS texts | Held: District court correctly found class ascertainable; Experian lacked standing to press the objection here |
| Fairness of settlement (Grinnell factors, notice, releases, incentive awards) | Plaintiffs: settlement reasonable given litigation risks; notice adequate; incentive awards appropriate | Bowes: settlement fund too small; notice omitted trial payout; releases overbroad; incentive awards improper; transcripts withheld | Held: District court did not abuse discretion—notice adequate, settlement fair under Grinnell factors, releases permissible, incentive awards permissible, and transcript request irrelevant |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (articulates Article III injury-in-fact test for intangible harms; history and Congress weigh in)
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (texts qualify as "calls" under the TCPA)
- King v. Time Warner Cable Inc., 894 F.3d 473 (2d Cir. 2018) (describes TCPA scope and purpose)
- Bhatia v. Piedrahita, 756 F.3d 211 (2d Cir. 2014) (nonsettling defendants generally lack standing to appeal settlement approval absent formal legal prejudice)
- Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037 (9th Cir. 2017) (receipt of unsolicited texts constitutes concrete harm under TCPA)
- Susinno v. Workout World Inc., 862 F.3d 346 (3d Cir. 2017) (same: TCPA statutory violation is a concrete privacy/nuisance injury)
- Grinnell Corp. v. City of Detroit, 495 F.2d 448 (2d Cir. 1974) (nine-factor test for evaluating fairness of class settlements)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (distinguishes statutory cause of action versus subject-matter jurisdiction in standing analysis)