Tag: TCPA

TCPA Turnstile: 2022 Year in Review (TCPA Case Update Vol. 17)

As 2022 comes to a close, we wanted to look back at the most significant Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) decisions of the year.  While we didn’t see the types of landscape-altering decisions that we saw in 2021, there’s still plenty to take note of.  We summarize here the biggest developments since our last update, listed by issue category in alphabetical order.

Arbitration: In Kelly v. McClatchy Co., LLC, 2022 WL 1693339 (E.D. Cal.  May 26, 2022), the District Court denied the defendant’s motion to compel arbitration because the contractual relationship between the parties had terminated before the unwanted calls were made. Plaintiffs had originally signed defendant’s Terms of Service which bound them to an arbitration provision for all legal disputes. Plaintiffs then cancelled their subscriptions which subsequently ended the enforceability of the Terms of Service against them. However, plaintiffs then received unwanted calls from Defendant seeking service renewals which the court deemed were not covered by the arbitration clause, even under a theory of post-expiration enforcement.

ATDS: Following Facebook v. Duguid, 141 S. Ct. 1163 (2021), courts are still struggling to define an “automatic telephone dialing system,” and the Third Circuit weighed in through Panzarella v. Navient Sols., Inc., 2022 WL 2127220 (3d Cir. June 14, 2022).  The district court granted defendant’s motion for summary judgment on the grounds that plaintiffs failed to show that an ATDS was used to call their phones. The Third Circuit upheld the summary judgment ruling but did not decide whether the dialing equipment used constituted an “ATDS” under the TCPA. Rather, its ruling hinged on the fact that defendant’s dialer pulled phone numbers from its internal database, not computer-generated tables. As such, the Third Circuit found that even though the system may very well be an unlawful ATDS system under the TCPA, if it is not used in that way, defendants could not be held liable.

In an interesting move, the court in Jiminez v. Credit One Bank, N.A., Nco Fin. Sys., 2022 WL 4611924 (S.D.N.Y. Sept. 30, 2022), narrowed the definition of an “ATDS,” choosing to reject the Second Circuit approach in favor of the Third Circuit’s approach in Panzarella. Here, plaintiff alleged that defendant used a dialing system to send numerous calls without consent. The Second Circuit follows the majority view that, if a system used to dial numbers has the ability to store or generate random numbers, the call made violates the TCPA, even if the random dialing function is not actually utilized. But the court in Jiminez found the Third Circuit’s reasoning persuasive and applied it to the case, finding that plaintiff failed to show the dialing system was actually used in a way that violated the TCPA. It granted summary judgment to defendants on the TCPA claims because the evidence showed the numbers used were all taken from a pre-approved customer list, not generated from random dialing.

Similarly, in Borden v. Efinancial, LLC, 2022 WL 16955661 (9th Cir. Nov. 16, 2022), the Ninth Circuit also adopted a narrower definition of an ATDS, finding that to qualify as an ATDS, a dialing system must use its automation function generate and dial random or sequential telephone numbers. This means that a mere ability to generate random or sequential numbers is irrelevant, the generated numbers must actually be telephone numbers. Given the circuit split on this issue, it seems likely that the Supreme Court will eventually have to weigh in.

Notably, in May 2022, the FCC issued a new order which will target unlawful robocalls originating outside the country. The order creates a new classification of service providers called “Gateway Providers” which have traditionally served a transmitters of international robocalls. These providers are domestic intermediaries which are now required to register with the FCC’s Robocall Mitigation database, file a mitigation plan with the agency, and certify compliance with the practices therein.

Class Certification: In Drazen v. Pinto, 41 F. 4th 1354 (11th Cir. July 27, 2022), the Eleventh Circuit considered the issue of standing in a TCPA class action. Plaintiffs’ proposed settlement class included unnamed plaintiffs who had only received one unsolicited text message. Because the court held in an earlier case (Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019)) that just one unwanted message is not sufficient to satisfy Article III standing, it found that some of the class members did not have adequate standing. The district court approved the class with these members in it, finding that those members could remain because they had standing in their respective Circuit and only named plaintiffs needed to have standing. The Eleventh Circuit held otherwise and vacated the class certification and settlement in the case. It remanded, allowing for redefinition of the class giving all members standing.

Consent: Chennette v. Porch, 2022 WL 6884084 (9th Cir. Oct. 12, 2022), involved a defendant who used cell phone numbers posted on publicly available websites, like Yelp and Facebook, to solicit client leads to contractors through unwanted text messages. The court rejected defendant’s argument that plaintiffs consented to the calls because their businesses were advertised through these public posts with the intent of obtaining new business. Beyond that, the court also found that even though these cell phones were used for both personal and business purposes, the numbers still fell within the protection of the TCPA, allowing plaintiffs to satisfy both statutory and Article III standing.

Damages: In Wakefield v. ViSalus, 2022 WL 11530386 (9th Cir. Oct. 20, 2022), the Ninth Circuit adopted a new test to determine the constitutionality of an exceptionally large damages award. Defendant was a marketing company that made unwanted calls to former customers, soliciting them to renew their subscriptions to weigh-loss products. After a multi-day trial, a jury returned a verdict for the plaintiff with a statutory damages award of almost $1 billion. The Ninth Circuit reversed and remanded to the district court to consider the constitutionality of the award. While the district court’s test asked whether the award was “so severe and oppressive” as to violate defendant’s due process rights, the Ninth Circuit instructed it to reassess using a test outlined in a different case, Six Mexican Workers. The Six Mexican Workers test assesses the following factors in determining the constitutionality of the damages award: “1) the amount of award to each plaintiff, 2) the total award, 3) the nature and persistence of the violations, 4) the extent of the defendant’s culpability, 5) damage awards in similar cases, 6) the substantive or technical nature of the violations, and 7) the circumstances of each .” We are still awaiting that determination on remand.

Standing: In Hall v. Smosh Dot Com, Inc., 2022 WL 2704571 (E.D. Cal July 12, 2022), the court addressed whether plaintiff had standing under the TCPA as a cell phone plan subscriber where the text messages were only received by someone else on the plan; in this case, plaintiff was the subscriber and her minor son was the recipient of the unwanted text messages. The court granted defendant’s motion to dismiss for lack of standing because she could not show that status of a subscriber alone could convey adequate standing under Article III.

In Rombough v. State Farm, No. 22-CV-15-CJW-MAR, (N.D. Iowa June 9, 2022), the court evaluated standing under the TCPA based on a plaintiff’s number being listed on the Do Not Call list. It determined that being on the DNC was not an easy ticket into court, plaintiff needed to allege more than just having its number on the list. Rather, the plaintiff need have actually registered their own numbers on the list.

© 2022 Vedder Price
For more Cybersecurity and Privacy Law news, click here to visit the National Law Review.

ANOTHER TRILLION DOLLAR CASE:? TikTok Hit in MASSIVE CIPA Suit Over Its Business Model of Profiting from Advertising by Collecting and Monetizing User Data

Data privacy lawsuits are EXPLODING and one of our country’s most popular mobile app — TikTok’s privacy issues keep piling up.

Following its recent $92 million class-action data privacy settlement for its alleged violation of Illinois Biometric Information Privacy Act (BIPA), TikTok is now facing a CIPA and Federal Wire Tap class action for collecting users’ data via its in-app browser without Plaintiff and class member’s consent.

The complaint alleges “[n]owhere in [Tik Tok’s] Terms of Service or the privacy policies is it disclosed that Defendants compel their users to use an in-app browser that installs JavaScipt code into the external websites that users visit from the TikTok app which then provides TikTok with a complete record of every keystroke, every tap on any button, link, image or other component on any website, and details about the elements the users clicked. “

Despite being a free app, TikTok makes billions in revenue by collecting users’ data without their consent.

“The world’s most valuable resource is no longer oil, but data.”

While we’ve discussed before, many companies do collect data for legitimate purposes with consent. However this new complaint alleges a very specific type of data collection practice without the TikTok user’s OR the third party website operator’s consent.

TikTok allegedly relies on selling digital advertising spots for income and the algorithm used to determine what advertisements to display on a user’s home page, utilizes tracking software to understand a users’ interest and habits. In order to drive this business, TikTok presents users with links to third-party websites in TikTok’s in-app browser without a user  (or the third party website operator) knowing this is occurring via TikTok’s in-app browser. The user’s keystrokes is simultaneously being intercepted and recorded.

“Specifically, when a user attempts to access a website, by clicking a link while using the TikTok app, the website does not open via the default browser.  Instead, unbeknownst to the user, the link is opened inside the TikTok app, in [Tik Tok’s] in-app browser.  Thus, the user views the third-party website without leaving the TikTok app. “

The Tik-Tok in-app browser does not just track purchase information, it allegedly tracks detailed private and sensitive information – including information about  a person’s physical and mental health.

For example, health providers and pharmacies, such as Planned Parenthood, have a digital presence on TikTok, with videos that appear on users’ feeds.

Once a user clicks on this link, they are directed to Planned Parenthood’s main webpage via TikTok’s in-app browser. While the user is assured that his or her information is “privacy and anonymous,” TikTok is allegedly intercepting it and monetizing it to send targeted advertisements to the user – without the user’s or Planned Parenthood’s consent.

The complaint not only details out the global privacy concerns regarding TikTok’s privacy practices (including FTC investigations, outright ban preventing U.S. military from using it, TikTok’s BIPA lawsuit, and an uptick in privacy advocate concerns) it also specifically calls out the concerns around collecting reproductive health information after the demise of Roe v. Wade this year:

“TikTok’s acquisition of this sensitive information is especially concerning given the Supreme Court’s recent reversal of Roe v. Wade and the subsequent criminalization of abortion in several states.  Almost immediately after the precedent-overturning decision was issued, anxieties arose regarding data privacy in the context of commonly used period and ovulation tracking apps.  The potential of governments to acquire digital data to support prosecution cases for abortions was quickly flagged as a well-founded concern.”

Esh. The allegations are alarming and the 76 page complaint can be read here: TikTok.

In any event, the class is alleged as:

“Nationwide Class: All natural persons in the United State whose used the TikTok app to visit websites external to the app, via the in-app browser.

California Subclass: All natural persons residing in California whose used the TikTok app to visit websites external to the app, via the in-app browser.”

The complaint alleges California law applies to all class members – like the Meta CIPA complaint we will have to wait and see how a nationwide class can be brought related to a CA statute.

On the CIPA claim, the Plaintiff – Austin Recht – seeks an unspecific amount of damages for the class but the demand is $5,000 per violation or 3x the amount of damages sustained by Plaintiff and the class in an amount to be proven at trial.

We’ll obviously continue to keep an eye out on this.

Article By Puja J. Amin of Troutman Firm

For more communications and media legal news, click here to visit the National Law Review.

© 2022 Troutman Firm

THE OLD 9999 SCAM?: Plaintiff Alleges Defendant Made 5000 Illegal Phone Calls to his Number–But is it a Set Up?

So ostensiby the case of Mongeon v. KPH Healthcare, 2022 WL 1978674 Case No. 2:21-cv-00195 (D. Vt. 06/06/2022) is simply a case about the definition of “consumer” under the Vermont Consumer Protection Act (“VCPA”), 9 V.S.A. § 2453.

The plaintiff alleges his receipt of 4000 calls from the Defendant after the Defendant promised to stop calling was an act of “fraud” and “deceit” under the VCPA. But since the Plaintiff has not alleged facts establishing he is a “consumer” within the meaning of the Act the Court dismissed the case, without prejudice.

Pretty blasé.

But let’s back up. Why would Defendant–seemingly a local pharmacy–blast the Plaintiff’s number so many times?

Well the Plaintiff’s full number is not set forth in the decision–but the last four digits are “9999.”

Many years ago before I became a TCPA class action defense lawyer I–like many out there–had a very low impression of the TCPA. I remember a guy in law school who made tuition bring junk fax cases. And I had a colleague who was locked in mortal battle with some clown who was bringing a series of small claims TCPA suits in Southern California arising out of calls to a “designer phone number”: 999-999-9999.

Hmmmmm.

Much like the old case of Stoops in which the Plaintiff had over 80 cell phones–or the recent case of Barton in which the Plaintiff had a cell phone purchased specifically to set up TCPA suits–a 9999 scammer will pick up a “designer number” like 999-999-9999 and wear it is for a legitimate purpose. “I run a real estate agency, etc.” Looking deeper there is rarely any utility behind the number–although other designer numbers like (800) 444-4444 are very helpful–and the numbers are often just used to net TCPA lawsuits.

The reason it works is rather obvious.

When I walk into my local Sports Clips for my monthly trim there is no way I’m going to give them my private cell phone number. So I give them 999-999-9999. (Of course, I also give them my email of no@no.com.) It works perfectly well for check in, and I never receive any texts or calls from them reminding me to come back to style my luscious used-to-be-black locks.

Apart from folks providing the number 999-999-9999 to a business, many companies will knowingly have their agents enter the number as a default when the customer does not otherwise provide their number. This was the case in the old “small claims bandit” run of suits I mentioned earlier–apparently a local hospital group was engaging in this practice, which lead to an endless number of TCPA suits being filed against them by an enterprising Plaintiff.

Well Mongeon appears to be the same issue. Per the ruling: , Defendant’s representatives advised Plaintiff “that his phone number was attached to multiple other customers who had prescriptions at the pharmacy” because Plaintiff’s phone number, XXX-XXX-9999, is “the ‘default’ number for all new or current customers in [Defendant’s] system without a phone number.” 

Pro tip: the 9999 play is arguably the oldest manufactured lawsuit trick in TCPAWorld. Don’t fall for it. Never use 999-999-9999 (or any other series of numbers) as a “default” setting for customer phone numbers. And if you do, you definitely want to suppress dialing to those numbers.

Stay safe out there TCPAWorld.

Article By Eric J. Troutman of Troutman Firm

For more communications, media, and internet news, click here to visit the National Law Review.

© 2022 Troutman Firm

NCLC Tells FCC “Callers can easily avoid making calls to telephone numbers that have been reassigned….” – But Is it That Simple?

The National Consumer Law Center is at it again.

In response to the Department of Health and Human Services’ recent letter to the FCC seeking clarity on whether the TCPA applies to texts it would like to make to alert Americans of certain medical benefits, the NCLC–an organization that nominally represents consumers, but really seems to represent the interests of the plaintiff’s bar–has filed a comment.

Unsurprisingly, the NCLC takes the position that HHS needs no relief. Government contractors are covered by the TCPA–it says–but the texts at issue in HHS’ letter are consented, so they’re fine. (Although it later clarifies that only “many” but not “all” of the enrollees whom HHS wishes to call have “probably” given their telephone numbers as part of written enrollment agreements–so perhaps not.)

Hmmmm. Feels like a trap. But we’ll ignore that for now.

The critical piece here though is what the NCLC–very powerful voice, for better or (often) worse–is telling the FCC about the effectiveness of the new Reassigned Number Database:

3. Callers can easily avoid making calls to telephone numbers that have been reassigned to someone other than the enrollee

A primary source of TCPA litigation risk has been calls inadvertently made to numbers that are no longer assigned to the person who provided consent. Courts have held the caller liable for making automated calls to a cell phone number that has been reassigned to someone other than the person who provided consent to be called.29

The Commission has implemented the Reassigned Number Database specifically to address that risk of liability, as well as to limit the number of unwanted robocalls:

The FCC’s Reassigned Numbers Database (RND) is designed to prevent a consumer from getting unwanted calls intended for someone who previously held their phone number. Callers can use the database to determine whether a telephone number may have been reassigned so they can avoid calling consumers who do not want to receive the calls. Callers that use the database can also reduce their potential Telephone Consumer Protection Act (TCPA) liability by avoiding inadvertent calls to consumers who have not given consent for the call.31

The database has been fully operational since November 1, 2021. It provides a means for callers to find out before making a call if the phone number has been reassigned. If the database wrongly indicates that the number has not been reassigned, so long as the caller has used the database correctly, no TCPA liability will apply for reaching the wrong party. 32 Thus, as long as HHS’s callers make use of this simple, readily available database, they can be confident that they will not be held liable for making calls to reassigned numbers.

While I steadfastly support both the creation and use of the RND, it also must be observed that there are myriad problems with the RND as it currently exists. Most importantly, the data sets in the RND are only comprehensive through October 1, 2021 and spotty back to February, 2021 (beyond which there are no records!)

So for folks like HHS–and servicers of mortgages, and retailers, and credit card companies–who want to reach customers who provided their contact information before 10/2021 or 2/2021 the RND is simply not helpful.

The NCLC’s over simplification of a critical issue is not surprising. They once told Congress that the TCPA is “Straightforward and Clear” after all.

Full comment here: NCLC Comments-c3

We’ll keep an eye on developments on HHS’ letter and all the FCC goings ons.

Article By Eric J. Troutman of Troutman Firm

For more TCPA and communications legal news, click here to visit the National Law Review.

© 2022 Troutman Firm

WEBSITE LAYOUT PASSES MUSTER: Court Enforces Cruise Line’s TCPA and Arbitration Disclosures Over Objection

Those of you who attended Lead Generation World heard me discuss the big trend from back in 2020 in which Courts were refusing to enforce online disclosures owing to perceived problems with website layout.

Things like “below the button” disclosures and distracting visual elements were often described as defeating a manifestation of assent to disclosure terms in that unfortunate line of cases.

Well, 2022 has brought a couple of cases that have determined website disclosures to be just fine. Yesterday I reported on a big win by Efinancial, and today we have a nice victory by a cruise ship company.

In Barney v. Grand Caribbean Cruises, Inc., CASE NO. 21-CV-61560-RAR, 2022 U.S. Dist. LEXIS 8263 (S.D. Fl. January 17, 2022) the Defendant moved to enforce an arbitration provision on its website arguing that the Plaintiff had agreed to the terms and conditions by submitting a sweepstakes entry form.

Predictably, the Plaintiff argued that the disclosures were not enforceable because the website layout was insufficient–specifically that the font was too small and the terms excessively lengthy.

The Court was not impressed.

Noting that the disclosure was plainly readable and above the button–and it required a check box–the Court simply refused to heed the Plaintiff’s argument that he didn’t know he was agreeing to consent and arbitration. Here’s the analysis:

First, in terms of placement, the Website does not tuck away its statement regarding the Terms & Conditions in an obscure corner of the page where a user is unlikely to encounter it. Rather, the statement is located directly between the contact information fields and the “Submit Entry” button. The user is required to check the box indicating assent to the Terms & Conditions before any information is submitted. Id. ¶ 14. Thus, it is impossible that a user would miss seeing the statement regarding the Terms & Conditions or—at the very least—the checkbox indicating assent to them. Second, rather than merely informing the user that the Terms & Conditions exist, the statement directs the user to the precise location where the Terms & Conditions can be accessed—namely, at the “bottom of the page.” Finally, and most significantly, the user is required to check an acknowledgement box to accept the Terms & Conditions before any information is submitted through the Website—an affirmative act indicating [*14] assent. The checkbox accompanies the statement, which specifically includes language indicating that the user “agree[s] to the Privacy Policy and Terms & Conditions.” Thus, there is an explicit textual notice that checking the box will act as a manifestation of an intent to be bound. A reasonable user confronting a statement that “I consent to receive e-mail, SMS/Text messages, and calls about offers and deals from an automatic dialing system and/or pre-recorded voice technology” and “confirm that I am over age 25 [and] agree to the Privacy Policy and Terms & Conditions that are hyperlinked at the bottom of the page” would understand that he or she is assenting to the linked terms, including those pertaining to mandatory arbitration. And the record shows that Plaintiff indeed checked the box before clicking “Submit Entry.” Connolly Decl. ¶ 20. Plaintiff’s objections to the design of the Website hold no water. Plaintiff assails the statement regarding the Website’s Terms & Conditions as “lengthy” with “extremely small font that blends into the background.” Resp. at 9. But as seen in the screenshot of the Website on the day of Plaintiff’s visit, the statement’s text is clearly legible [*15] and not overly long. Indeed, it is roughly the same size and color as the text indicating the fields for “First Name,” “Last Name,” “Email,” and “Phone Number.” Plaintiff also objects to the placement of the link to the Terms & Conditions at the bottom of the page. Id. at 10. But, as discussed supra, that is precisely where the statement directed the user to view them.

As you can see the Court found the layout to be perfectly appropriate and was particularly moved by the presence of the opt in check box. Although many cases have recently enforced disclosures WITHOUT checkboxes, they do remain favored by the Courts.

I think Barney represents a case of a pretty clearly enforceable provision. The above-the-button text coupled with the radial button and the clear articulation of the terms being accepted made this an easy case for the court.

I will note that the TCPA consent is connected to the terms and conditions lingo–I don’t love that since the TCPA disclosure should be “separately signed”. But the agreement by the consumer that they are over 25 is a nice touch–helps to protect against claims that minors are supplying consent illegally.

© Copyright 2022 Squire Patton Boggs (US) LLP
For more articles about TCPA litigation, visit the NLR Litigation section.

Supreme Court “Unfriends” Ninth Circuit Decision Applying TCPA to Facebook

In a unanimous decision, the Supreme Court held that Facebook’s “login notification” text messages (sent to users when an attempt is made to access their Facebook account from an unknown device or browser) did not constitute an “automatic telephone dialing system” within the meaning of the federal Telephone Consumer Protection Act (“TCPA”).  In so holding, the Court narrowly construed the statute’s prohibition on automatic telephone dialing systems as applying only to devices that send calls and texts to randomly generated or sequential numbers.  Facebook, Inc. v. Duguid, No. 19-511, slip op. (Apr. 1, 2021).

The TCPA aims to prevent abusive telemarketing practices by restricting communications made through “automatic telephone dialing systems.”  The statute defines autodialers as equipment with the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers.  Plaintiff alleged Facebook violated the TCPA’s prohibition on autodialers by sending him login notification text messages using equipment that maintained a database of stored phone numbers. Plaintiff alleged Facebook’s system sent automated text messages to the stored numbers each time the associated account was accessed by an unrecognized device or browser.  Facebook moved to dismiss, arguing it did not use an autodialer as defined by the statute because it did not text numbers that were randomly or sequentially generated.  The Ninth Circuit was unpersuaded by Facebook’s reading of the statute, holding that an autodialer need only have the capacity to “store numbers to be called” and “to dial such numbers automatically” to fall within the ambit of the TCPA.

At the heart of the dispute was a question of statutory interpretation: whether the clause “using a random or sequential number generator” (in the phrase “store or produce telephone numbers to be called, using a random or sequential number generator”) modified both “store” and “produce,” or whether it applied only to the closest verb, “produce.”  Applying the series-qualifier canon of interpretation, which instructs that a modifier at the end of a series applies to the entire series, the Court decided the “random or sequential number generator” clause modified both “store” and “produce.”  The Court noted that applying this canon also reflects the most natural reading of the sentence: in a series of nouns or verbs, a modifier at the end of the list normally applies to the entire series.  The Court gave the example of the statement “students must not complete or check any homework to be turned in for a grade, using online homework-help websites.” The Court observed it would be “strange” to read that statement as prohibiting students from completing homework altogether, with or without online support, which would be the outcome if the final modifier did not apply to all the verbs in the series.

Moreover, the Court noted that the statutory context confirmed the autodialer prohibition was intended to apply only to equipment using a random or sequential number generator.  Congress was motivated to enact the TCPA in order to prevent telemarketing robocalls from dialing emergency lines and tying up sequentially numbered lines at a single entity.  Technology like Facebook’s simply did not pose that risk.  The Court noted plaintiff’s interpretation of “autodialer” would, “capture virtually all modern cell phones . . . .  The TCPA’s liability provisions, then, could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses.”

The Court thus held that a necessary feature of an autodialer under the TCPA is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.  This decision is expected to considerably decrease the number of class actions that have been brought under the statute.  Watch this space for further developments.

© 2020 Proskauer Rose LLP.

ARTICLE BY Lawrence I Weinstein and
Anisha Shenai-Khatkhate of Proskauer Rose LLP
For more articles on the TCPA, visit the NLR Communications, Media & Internet section

Happy Thanksgiving TCPAworld!: Here Are the Top 10 TCPA Stories to be Grateful For This Time of Year

I know that many of you have the sense that its all-bad-news-all-the-time around here and feel like there are simply no silver linings to be found– but there is ALWAYS something to be thankful for in life, and TCPAWorld is no exception.

And I know, I know, you’re all very thankful the Czar– and I’m thankful for you too. But this isn’t a hugathon folks, its a learn-all-about-it-athon. So without further adieu, here are the top 10 TCPA stories you should be thankful for this year:

No. 10: There’s a Great Book Out About the TCPA and It is Really Quite Funny

I know most of you spend those long winter nights catching up on old Unprecedented episodes with the family and perusing TCPAWorld stories you may have missed throughout there year, but you can add another festive activity to your eggnog-laden December evenings: reading Dennis Brown’s self-published TCPA masterpiece “Telephone Terrorism– The Story of Robocalls and the TCPA.”

Great book. Great subject matter. Really funny. The only downside is that its too quick of a read– I blew through it in a single afternoon and I was left wanting more.

Maybe 2021 will see the Czar writing his own TCPA novel? We’ll see if holiday wishes really do come true.

No. 9: At Least One Court Has Found that Knowledge of TCPA Violations Alone is not Enough to Hold a Corporate Officer Personally Liable for the TCPA

I’ve said it before and I’ll say it again– the rule holding corporate officers and employees personally liable for TCPA violations by the company is amongst the most unfair rules in the entire legal world. It makes no sense that folks trying to help companies comply with the TCPA might be held personally liable for accidental violations. Gross.

The Seventh Circuit Court of Appeals has pushed back a bit against this rule, however, and determined that mere knowledge of a TCPA violation alone does not trigger personal liability.

Give how disastrous personal liability can be for employees working for companies facing TCPA risk, any ruling ameliorating tis profoundly unfair rule is truly something to be thankful for.

No. 8: Courts Are (Slowly) Catching on to the Idea that Responses to Consumer Requests for Information About a Product or Service Are Not Marketing Messages

The line between marketing and informational messages can sometime be extremely blurry. And when you consider that courts are supposed to apply “common sense” in assessing whether a neutral message might yet have been sent with a “dual purpose” to market, or as a “pretext,” it starts to feel like determining if a message might be marketing is a bit of a crap shoot.

Still the law is slowly trending toward a workable framework in which responses to consumer requests for information are not treated as marketing (requiring WRITTEN consent)– but rather as informational calls (requiring the consumer to have merely supplied their phone number in requesting information.) This is a huge deal for direct mailers or advertisers that field massive numbers of inbound calls from consumers seeking information and then have to return those phone calls–often without express written consent. Its also important for folks whose disclosures don’t quite live up to the letter of the law for marketing purposes. Either way its nice to see “common sense” is slowly starting to be applied with a little common sense.

No. 7: The FCC Clarifies that P2P Texting Does not Violate the TCPA– Sort Of

I remember reading the Marks ruling for the first time and getting extremely excited at the beginning of the ruling– when the Ninth Circuit held that the FCC’s earlier braod TCPA rulings had been set aide by ACA Int’l–only to have my excitement turn to shock and ultimately agony as I read the rest of the opinion.

Reading the FCC’s recent P2P rulings was a similar experience, only a bit watered down. The ruling was seemingly great for businesses and candidates using P2P text solutions, but somehow the language didn’t quite match what the ruling seemed to be saying– if you know what I mean. Read one way the ruling is a huge win authorizing P2P texts across the broad. Read another way the ruling simply confirmed that texts launched by the manual entry of an entire phone number and an entire message didn’t violate the TCPA so long as the system didn’t otherwise have the capacity to act as an ATDS–which is not really very helpful at all.

While courts are struggling with what, exactly, the ruling means– we should all be thankful that the FCC certainly seems to have blessed P2P texting platforms, even if the language of the ruling is somewhat open to interpretation.

No. 6: Some Manufactured TCPA Lawsuits Are Getting the Boot

Ever since my huge win back in Stoops, manufactured TCPA lawsuits should be subject to dismissal. Unfortunately, TCPA defendants have–by and large–not leveraged the case properly, resulting in an avalanche of decisions distinguishing Stoops and allowing repeat TCPA litigators to continue to thrive in the courtroom.

But as two recent court decisions prove, leveraging Stoops properly can lead to big wins– such as where a Plaintiff engages in conduct designed specifically to attract more TCPA violations, or uses a business number specifically to set a trap for marketers. 

No. 5: TCPA Filings are Flat Year Over Year–And Declining

TCPA filings are up a meager 4% year to date over last year. But there were a huge number of early-year filings but they have mostly dwindled as the year has run on.

Indeed the last couple of months have seen a sharp decline in TCPA filings as Plaintiff’s lawyers keep their powder dry and await the big SCOTUS ATDS ruling. In fact, I have talked to a number of TCPA plaintiffs lawyers who openly admit they are holding on to TCPA suits that will be filed, if at all, only after the Supreme Court hands down its big Facebook ATDS ruling (more on that below).

Even if the low TCPA count this year might be a bit of a mirage–and TCPAWorld might be facing a huge surge next year–the brief respite is still something to be thankful for.

No. 4: The Eleventh Circuit Court of Appeals

One of the things callers should be MOST thankful for this year is that the entire Eleventh Circuit Court of Appeal woke up some sleepy Tuesday in September, went to its toolshed, found a flamethrower, and decided to torch TCPA class actions in the jurisdiction.

For about a year now the Eleventh Circuit has systematically dismantled the TCPA machine that had built up in Florida. It was a remarkable turn of events–worthy of its own TCPA novel– as the once-friendliest jurisdiction for TCPA suits flipped on a dime and became the ultimate Defense paradise.  

No. 3: Facebook Looks Like a Heavy Favorite to Win Its SCOTUS ATDS Appeal

Hopefully I didn’t just jinx them, but Facebook is really looking strong headed into oral argument on December 8, 2020. With Justice Barrett–the former Seventh Circuit Court of Appeals judge that wrote the defense-friendly Gadelhak decision— installed at the Supreme Court, Facebook is playing with a stacked deck. But the incredibly persuasive work by the U.S. Government (i.e. the Solicitor General’s office) is the real ace in the hole here.

The TCPAWorld.com probability dial–which once showed Duguid as a slight favorite following the AAPC ruling–is now suggesting an 85% chance of victory for Facebook. That’s a big swing in our analytic simulation model, which doesn’t actually exist.

And remember, if Facebook pulls it off it was all thanks to TCPAWorld.com convincing the Supremes to take the appeal in the first place. That’s how I remember it anyway.

No. 2: All Robocalling Sins Have Been Wiped Away for a Long Four Years –According to Some Courts Anyway 

Undoubtedly the biggest TCPA story of 2020 is the Supreme Court’s big ruling in AAPC and the profound impact it (may have) had on liability for calls made prior to July 6, 2020. 

Like so much else in TCPAWorld, the impact of AAPC turns on your point of view. From one perspective the Supreme Court ruling was a ho-hum decision isolating a single exemption for First Amendment review and severing it when things didn’t line up for it. From another perspective–mine–it was a free-speech-killing first-of-its-kind ruling that turned the First Amendment into an ironing board. But from another–critical–perspective it was a ruling in which the U.S. Supreme Court determined the entire TCPA was unconstitutional and had to save the enactment by severing a content-specific exemption.

This later perspective is what animates two huge district court rulings that have determined that all calls made between November, 2015 and July, 2020 are simply not actionable. This is so because the TCPA was unconsttutional during that entire timeframe. This remarkable ruling means that the vast majority of calls made during the height of the Robocall epidemic of the 20teens are simply beyond the reach of plaintiff’s lawyers.

As I have suggested previously, by wiping out TRILLIONS in TCPA exposure the rule of Creasy and Lindenbaum amount to one of the largest wealth transfers (or at least, risk write downs) in human history. These are remarkable rulings, that are truly worth giving thanks for.

No 1: TCPAWorld.com Keeps Cranking out the Must-Read Content– and the VIDEOS

Rather obviously the thing TCPAWorld denizens should be most thankful for this year-and every year–is the hard working team here at Squire Patton Boggs and TCPAWorld.com. Not only do we deliver great first-in-the-nation wins, we break down every TCPA story as it happens, virtually in real time. And we’re not going to stop any time soon.

Plus, when COVID hit we moved to VIDEO podcasts to better engage with you folks and have been pumping out free webinars and learning sessions to make sure that YOU are armed with the information you need to protect yourself in the turbulent TCPA world.

And of course, we do it all for free. With no barriers to content. No unnecessary sign ups. No advertising. No pop up adds. No data sales. No nothing.

So when you raise your glass of cider over that delectable Thanksgiving feast on Thursday, you’ll be forgiven if TCPAWorld.com enters into the discussion of the list of things you’re most thankful for this year.

And we, of course, are endlessly thankful for each of you as well.

I guess this was a hugathon after all.

Stay grateful TCPAWorld.

© Copyright 2020 Squire Patton Boggs (US) LLP

Spooktacular Severability Ruling Raises Barr From The Dead, Buries TCPA Claims Arising Between November 2015 and July 2020

A few weeks ago, the Eastern District of Louisiana held that courts cannot impose liability under Sections 227(b)(1)(A) or (b)(1)(B) of the TCPA for calls that were made before the Supreme Court cured those provisions’ unconstitutionality by severing their debt collection exemptions.  The first-of-its-kind decision reasoned that courts cannot enforce unconstitutional laws, and severing the statute applied prospectively, not retroactively. Plaintiffs privately panicked but publicly proclaimed that the Creasy decision was “odd” and would not be followed.

So much for that. Yesterday, the Chief Judge of the Northern District of Ohio followed Creasy and dismissed another putative class action.  The new case—Lindenbaum v. Realgy—arose from two prerecorded calls, one to a cellphone and another to a landline. The defendant moved to dismiss, arguing that “severance can only be applied prospectively,” that Sections 227(b)(1)(A) and (b)(1)(B) were unconstitutional when the calls were made, and that courts lack jurisdiction to enforce unconstitutional statutes. The plaintiff opposed the motion, arguing, among other things, that a footnote in Justice Kavanaugh’s plurality opinion in Barr v. AAPC suggests “that severance of the government-debt exception applies retroactively to all currently pending cases.”

The court sided with the defendant. It began by agreeing with Creasy that this issue “was not before the Supreme Court,” and the lone footnote in Justice Kavanaugh’s plurality opinion is “passing Supreme Court dicta of no precedential force.” It then surveyed the law and found “little, if any, support for the conclusion that severance of the government-debt exception should be applied retroactively so as to erase the existence of the exception.” It reasoned that, while judicial interpretations of laws are “given full retroactive effect in all cases still open on direct review and as to all events,” severance is different because it is “a forward-looking judicial fix” rather than a backward-looking judicial “remedy.” In short, severance renders statutes “void,” not “void ab initio.”

Defendants are now two-for-two in seeking dismissal of claims based on the now-undeniable unconstitutionality of the debt-collection exceptions in Section 227(b)(1)(A) or (b)(1)(B). With more such motions pending in courts across the country, this may become a powerful weapon against whatever claims remain after the Supreme Court’s decision in Facebook v. Duguid.

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.
For more articles on the TCPA, visit the National Law Review Litigation / Trial Practice section.

Grin and Barrett– Judge that Wrote Ruling Narrowly Interpreting TCPA’s ATDS Definition Sworn In to SCOTUS Ahead of Big Facebook TCPA Challenge

Well, its official

Former Judge Amy Coney Barrett– previously of the Seventh Circuit Court of Appeals– is now Justice Amy Coney Barrett of the US Supreme Court.

Whatever you may think of the GOP moving forward with this nomination in the shadow of the election, this is a great day for callers and advocates of a narrow TCPA read.

You already know the headline: in her previous role on the Seventh Circuit Court of Appeals, then-Judge Barrett had written a critical opinion addressing the TCPA’s ATDS definition and determined that the TCPA only applies to random or sequential number dialers, thus legalizing the vast majority of so-called “robocalls” in the Seventh Circuit footprint and freeing callers from one of the worst-written statute in American history.

Now as a Supreme Court Justice, one of Barrett’s first challenges will be to decipher the precise same portion of the precise same statute as part of Facebook’s huge SCOTUS appeal of the TCPA’s ATDS definition.

At issue, of course, is whether the TCPA applies to any call made “automatically” from a list of stored numbers or only those dialers that have the capacity to dial randomly or sequentially.  As I have explained recently, this is a classic “pathos vs logos” situation-– the statute plainly seems to require random or sequential number generation, yet the near universal disdain for robocalls might lead to a results-based analysis (of the sort the Supremes just engaged in to save this same statute a mere three months ago)

In our latest episode of the insanely popular Unprecedented [VIDEO] Podcast I had the opportunity to ask Plaintiff’s lead counsel- Sergei Lemberg–how he felt about arguing this critical issue back to the exact same Judge who ruled on this very issue in Gadelhak.  You’ll get to hear his answer TOMORROW right here.

The ascension of Justice Barrett is just the latest in a string of seesaw developments in the TCPA ATDS saga, with momentum swinging wildly in favor of one side or the other these last three months. The latest big development was the arrival of Bryan Garner– co-author with Justice Scalia (Justice Barrett’s mentor) of Reading Law, one of the most persuasive works on statutory interpretation– onto the consumer lawyer’s team urging an expansive read of the TCPA. And, of course, just last week nearly 40 state AGs likewise joined the fray in favor of an expansive TCPA read.

But with Justice Barrett arriving on the bench is Facebook now playing with a stacked deck? Certainly Justice Barrett–having already spoken on this issue–has a clear and obvious lean. Yet the trendy Beltway mistrust for “Big Tech” coupled with the fact that the Conservative wing of the Court (now its majority) previously split on whether to keep the TCPA on the books, suggest that this result might not yet be baked.

It all adds up to high drama in the high stakes TCPAWorld ATDS battle.

© Copyright 2020 Squire Patton Boggs (US) LLP
For more articles on the TCPA, visit the National Law Review Communications, Media & Internet section.

Clash of Consumer Protection Goals: Does the Text of the TCPA Frustrate the Purposes of the CPSA?

“Hello.  This is an automated call from Acme Manufacturing. Our records indicate that you purchased Product X between December 2019 and January 2020. We wanted to let you know that we are recalling Product X because of a potential fire risk. Please call us or visit our website for important information on how to participate in this recall.”

When companies recall products, they do so to protect consumers.  In fact, various federal laws, including the Consumer Product Safety Act (CPSA), the Federal Food, Drug, and Cosmetic Act (FDCA), and National Highway and Motor Vehicle Safety Act (MVSA), encourage (and may require) recalls. And the agencies that enforce these statutes would likely approve of the hypothetical automated call above because direct notification is the best way to motivate consumer responses to recalls.[1]

But automated calls to protect consumers can run into a problem: the Telephone Consumer Protection Act (TCPA).

Are Recall Calls a Nuisance or an Emergency?

The TCPA seeks to protect consumers from the “nuisance and privacy invasion” of unwanted automated marketing calls.[2] The TCPA prohibits any person from making marketing calls to landlines, or any non-emergency calls or text messages[3] to wireless lines, using automated dialers or recorded messages unless the recipient has given prior written consent. The Act includes a private right of action and statutory per-violation damages – $500, trebled to $1,500 if a court finds the violation willful and knowing.[4] These penalties can add up quickly: In one case, a jury found that a company violated the TCPA nearly two million times, exposing the company to minimum statutory damages totaling almost $1,000,000,000.[5]

There is an important exception to the TCPA’s prohibition on automated calls. The TCPA allows autodialed calls for emergency purposes,[6] but the Act does not define that phrase. While the FCC has interpreted emergency purposes to mean “calls made necessary in any situation affecting the health and safety of consumers,”[7] recalls are not explicitly identified within this definition. As a result, aggressive plaintiffs have demanded millions in damages from companies that use automatic dialers to disseminate recall messages.[8]

For example, a grocery chain – Kroger – made automated calls to some purchasers of ground beef as part of a recall stemming from salmonella concerns. A plaintiff responded with a purported class action that did not mention the recall [9] but was based on consumers alleging that they had received “annoying” “automated call[s] from Kroger.”

Moving to dismiss, Kroger observed that the plaintiff – who had not listened to the call beyond its initial greeting[10] and thus could not comment on the call’s text – had “cherry-picked”[11] portions of consumers’ online comments to support the case, omitting text that clearly demonstrated that the calls were made for health and safety purposes.[12] Kroger argued that the online comments did not support the plaintiff’s allegations that Kroger had made any marketing calls.

The court granted Kroger’s motion and dismissed the complaint without leave to amend. Even so, Kroger was compelled to spend time and money defending the claim.

In light of this type of lawsuit, one communications firm involved in automotive recalls has petitioned the FCC to “clarify . . . that motor vehicle safety recall-related calls and texts are ‘made for emergency purposes.’”[13] The Association of Global Automakers and the Alliance of Automobile Manufacturers commented in support of the petition, arguing that the “[l]ack of clarity regarding TCPA liability for vehicle safety recall messages has had a chilling effect on these important communications.”[14] The Settlement Special Administrator for the Takata airbag settlements also wrote in support, commenting that automated “recall-related calls and texts serve an easily recognizable public safety purpose.”[15]

The TCPA’s emergency exception offers protection in litigation. The FCC’s definition – “calls made necessary in any situation affecting the health and safety of consumers” – neatly encapsulates the entire function of a recall, namely acting to protect consumers’ health and safety. Moreover, in developing the emergency exception, Congress broadened initial language that excepted calls made by a “public school or other governmental entity” to the enacted “emergency purposes” phrasing precisely to ensure the exception encompassed automated emergency calls by private entities.[16] One of the seminal emergency purposes for which a private entity might seek to make automated calls is a product recall.

Even with such sound arguments that TCPA claims related to recall calls are without merit within the statute, however, aggressive plaintiffs have brought such claims. These efforts compel companies to spend finite resources defending claims that should not be brought in the first place. An express statutory or regulatory statement that recalls are squarely within the definition of emergency purposes would give companies greater confidence that not only would they be able to successfully defend against any effort to pit the TCPA against consumer-protection values, but that the claims are so unlikely to be brought that the companies need not even fear to have to defend.

Protecting Against Recall-Call Complaints

Until the FCC or Congress expressly instructs plaintiff’s counsel not to try to litigate against automated recall calls, there are steps companies that want to use automated dialers to drive recall responses can take to minimize any risk of a court misinterpreting their calls or finding TCPA liability where it should not attach.

For example, companies may (as some already do) ask for customers’ consent to be autodialed in connection with the products they have purchased – e.g., by including consent language on product warranty cards or registration forms. In fact, the Consumer Product Safety Improvement Act of 2008 (CPSIA)[17] already requires manufacturers of durable infant and toddler products to include registration cards for recall-communication purposes.[18] Companies in some other industries (like the on- and off-road motor vehicle industries) typically have robust registration systems that can incorporate auto dialing consent, and more companies in other spaces may want to consider using registration to facilitate recalls.

Further, automated recall calls should focus on the recall. If calls extend to marketing messaging, that could undermine both a future TCPA defense and the efficacy of that and future recall communications.

Optimally, companies would be less likely to need these defenses if the statute more clearly signaled to would-be litigants that they should not even bother. If the FCC grants the pending petition and plainly states that product recalls are emergencies for TCPA purposes, courts’ deference to agency interpretations might deter at least some complaints. A statutory amendment would be the surest guarantee, though, and manufacturers may wish to ask Congress to amend the TCPA to clarify that recall messages are emergency messages.

[1] See, e.g., Joseph F. Williams, U.S. Consumer Prod. Safety Comm’n, Recall Effectiveness Workshop Report, 5 (Feb. 22, 2018).

[2] Pub. L. No. 102-243, § 2(12), 105 Stat. 2394, 2395 (Dec. 20, 1991).

[3] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Report and Order, 18 FCC Rcd 14014, 14115, para. 165 (2003)

[4] TCPA at § 3(a), 105 Stat. at 2399 (codified at 47 U.S.C. § 227(c)(5)).

[5] Wakefield v. ViSalus, Inc., No. 3:15-cv-1857-SI (D. Or.).

[6] See, e.g., TCPA at § 3(a), 105 Stat. at 2395-96 (codified at 47 U.S.C. § 227(b)(1)(A)).

[7] 47 C.F.R. § 64.1200(f)(4).

[8] See, e.g., Compl., Ibrahim v. Am. Honda Motor Co., Inc., No. 1:16-cv-04294, Dkt. #1 (N.D. Ill. Apr. 14, 2016).

[9] Compl., Brooks v. Kroger Co., No. 3:19-cv-00106-AJB-MDD, Dkt. #1 (S.D. Cal. Jan. 15, 2019) (“Brooks”).

[10] Pl. Opp. to Mot. to Dismiss at 5, Brooks, Dkt. #9 (Apr. 4, 2019).

[11] Reply in Supp. of Mot. to Dismiss at 7, Brooks, Dkt. #10 (Apr. 11, 2019).

[12] The plaintiff quoted one complaint as “Automated call from Kroger.” Compl. at 3-4, Brooks. As the defense noted, that complaint continued, “requesting that you return ground beef . . . due to the threat of salmonella.” Mem. in Supp. of Mot. to Dismiss at 6, Brooks Dkt. #7 (Mar. 21, 2019).

[13] IHS Markit Ltd. Petition for Emergency Declaratory Ruling, CG Docket No. 02-278, Petition, ii (Sept. 21, 2018).

[14] IHS Markit Ltd. Petition for Emergency Declaratory Ruling, CG Docket No. 02-278, Comments of Association of Global Automakers, Inc. and Alliance of Automobile Manufacturers, 9 (Nov. 5, 2018).

[15] IHS Markit Ltd. Petition for Emergency Declaratory Ruling, CG Docket No. 02-278, Comments of Patrick A. Juneau, 3 (Nov. 5, 2018).

[16] S. Rep. No. 102-178, 5 (Oct. 8, 1991).

[17] Pub. L. No. 110-314, 122 Stat. 3016 (Aug. 14, 2008) (codified as amended at 15 U.S.C. § 2056a).

[18] 15 U.S.C. § 2056a(d).

© 2020 Schiff Hardin LLP

For more on CPSA, FDCA, MVSA & other recalls, see the National Law Review Consumer Protection law section.