FTSA Lawsuit Update

Readers of our blog may recall a recent piece in which we discussed a Florida Telephone Solicitation Act ("FTSA") lawsuit pending in the United States District Court for the Middle District of Florida. In Morris v. Lincare, Inc., Defendant moved to dismiss Plaintiff's FTSA lawsuit on the grounds that Plaintiff failed to plead actual damages as required to maintain a class action under Fla. Stat. § 768.734(2). Although the Court granted Defendant's motion in part, significantly, the Court declined to dismiss Plaintiff's FTSA claim. We discuss the Court's decision in further detail below.

FTSA Lawsuit Survives Dismissal

Plaintiff, Janet Morris, filed a class action lawsuit against defendant, Lincare Holdings, Inc., for alleged statutory violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (the "TCPA"), and the FTSA. After Morris amended the complaint twice, Lincare moved to dismiss: (1) the TCPA and FTSA claims; and (2) Morris' request for injunctive relief. In support of its motion to dismiss, Lincare argued that Morris' FTSA class claim must be dismissed pursuant to Florida Statute § 768.734 ("Fla. Stat. § 768.734") because Plaintiff alleged only statutory, not actual, damages. Fla. Stat. § 768.734 states that "in order to maintain a class action seeking statutory penalties under chapters 302, 501, and 521, the class action claimants must allege and prove actual damages." Because Morris failed to allege any damages beyond the statutory damages permitted under the FTSA, Lincare argued that Morris lacked capacity to sue under Fla. Stat. § 768.734.

In opposition to Lincare's motion, Morris argued that Federal Rule of Civil Procedure 23 (the federal rule governing class actions) preempts Fla. Stat. § 768.734 to the extent that it precludes FTSA claims from being brought as a class action. The Court agreed with Morris and allowed Morris' FTSA claims to proceed. After determining that Morris adequately pled the Rule 23 class action requirements, the Court looked to an Eleventh Circuit case for guidance. At issue in Lisk v. Lumber One Wood Preserving, LLC, 792 F.3d 1331 (11th Cir. 2015) was Alabama's Deceptive Trade Practices Act ("ADTPA"). The ADTPA provides for a private right of action, but only allows the Alabama Attorney General or a district attorney to bring a class action. The Eleventh Circuit concluded that the ADTPA's restriction on class actions did not apply in federal court actions and that Rule 23 controlled. In reaching its conclusion, the Lisk court determined that Rule 23 did not alter the substantive rights and obligations of the state substantive law.

Applying the Eleventh Circuit's reasoning in Lisk, the Court denied Lincare's motion to dismiss on the basis that Fla. Stat. § 768.734 prohibits FTSA class actions seeking only a statutory penalty. Similar to Lisk, the Court held that "the FTSA is not substantively modified by Rule 23, and thus, Rule 23 is valid and applies in this action."

Impact of Lincare

Until the Lincare decision, no Florida federal court had addressed the applicability of Fla. Stat. § 768.734 to FTSA class claims. Earlier this year, a Florida State court held that plaintiff could not maintain a class action for statutory damages under the FTSA without both alleging and proving actual damages. That decision offered a pathway to limiting potential FTSA liability. Now, the Court's decision in Lincare forecloses this defense, leaving businesses susceptible to FTSA class claims in which plaintiffs only allege statutory damages.

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