October 2018 - Call Compliance News
Eleventh Circuit Court of Appeals
The Eleventh Circuit Court of Appeals (which includes Florida and other states) is considering oral argument on the issue of whether a single text constitutes sufficient “injury” to give a plaintiff standing to sue under the Telephone Consumer Protection Act (“TCPA”). The defendants argued that the single text did not make plaintiff’s phone inoperable, prevent him from receiving other text messages or phone calls, or cost him anything. Salcedo v. Hanna.
Comment: The same argument would be relevant to unanswered calls which did not deliver a voicemail message.
Federal Communications Commission
The Federal Communications Commission (“FCC”) is expected to issue new regulations regarding the definition of automatic telephone dialing system (“ATDS”) in the very near future.
Comment: A recent Ninth Circuit case interpreted ATDS broadly and ignored the words “random or sequential number generator” in the statute’s definition. However, that case Marks v. Crunch San Diego, LLC, still defers to the statutory definition which requires human intervention and which concludes that if a system lacks the capacity to call without human intervention, it is not an ATDS. A showdown in the Supreme Court between the Ninth Circuit and other courts is likely on this issue.
The FCC has proposed a $37.5 million against an Arizona company for allegedly making spoofed telemarketing calls using caller IDs associated with consumers offering home improvement and remodeling services. FCC v. Affordable Enterprises of Arizona. See https://www.fcc.gov/document/fcc-proposes-375-million-fine-spoofed-telemarketing-calls. The complaint alleges the company made more than 2.3 million calls in a 14-month period beginning in 2016. No caller complaints or notice of apparent liability was provided.
Comment: Normally, a company can only be fined by the FCC after a citation is issued giving notice of the violation. In the past, the citation preceded a notice of apparent liability sometimes by years. In this situation, the FCC issued a citation and notice of apparent liability on the same day, calling into question the validity of the fine.
Federal Trade Commission
The Federal Trade Commission (“FTC”) has settled claims against six individuals and multiple companies which alleged illegal prepaid debt forgiveness programs. FTC v. Alliance Document Preparation, LLC, et al. The FTC alleged the defendants deceptively marketed document preparation services by telephone and affiliation with the Department of Education. The defendants will turn over more than $5 million to the FTC which will then be distributed to consumers.
An Arkansas court has denied a motion to strike allegations for sending illegal faxes. Defendants claimed that the damages provisions of the TCPA were unconstitutional because they were “severe and oppressive” and “obviously unreasonable”. McCall Law Firm, PLLC v. Crystal Clean, Inc.
Comment: Defendants’ counsel moved to withdraw immediately before this motion was filed, pro se. Defendants’ attorneys obviously did not agree with the tactic of claiming these damages were unconstitutional, and proved to be right when the judge denied this motion.
A California court has approved a $3.5 million settlement including more than $800 per class member in a TCPA class settlement. Gergetz v. Telenav, Inc. Because only one percent of class members submitted a claim, the claimants’ share of the class payment was high.
An Illinois court found that the arbitration agreement in Uber’s terms and conditions were binding in a case where plaintiff received an unsolicited text message asking if he wanted to be an Uber driver. Johnson v. Uber Technologies, Inc.
Comment: Arbitration clauses are very useful and you should review your terms and conditions on any consumer express consent document and consider including arbitration to prevent class actions.
An Illinois judge has denied class certification in a TCPA “wrong number” case brought against Citibank. Tomeo v. Citigroup, Inc. Plaintiffs claim Citibank used an ATDS to contact phone numbers after the recipients of calls asked to stop receiving calls or was told that the calls were to a wrong number. Plaintiffs’ expert claimed he could determine which numbers were wrong numbers based on the calling data, but defense experts disagreed. The judge noted Citibank put forth specific evidence showing a significant percentage of the alleged class consented to receiving calls. The judge agreed with the defense experts and held that consent would be an individualized issue, thus prohibiting class certification.
An Indiana court has ruled that Congress’s exemption for collectors of government-backed debt is a complete defense to TCPA claims, despite the fact that the FCC did not complete the process of issuing and implementing regulations. Sanford v. Navient Sols., LLC.
Plaintiffs claimed they received calls after they revoked prior express consent given by the holder of that plan to the insurer. Wilkes v. Caresource Mgmt. Grp. An agent of the insurer called the consumer with a welcome call, mistakenly, after cancellation, but the court ruled these calls did not violate the TCPA as the consumers had earlier provided “prior express consent”.
A Michigan court has denied a motion to compel arbitration in a TCPA case brought against a bank which allegedly made hundreds of unauthorized calls to plaintiff’s cell phone number. His wife had a credit card account with the bank and provided his cell phone number as a secondary contact. Pyciak v. Credit One Bank, N.A. The court ruled that the husband was not an authorized user of the account and therefore was not subject to the arbitration agreement applicable to his wife.
Comment: You should carefully review your terms and conditions, including those found on your websites to include enforceable arbitration language. Such language can be very effective in preventing TCPA claims including class actions.
A Michigan court ruled that a system which sent text messages but did not have the capacity to randomly or sequentially dial numbers was not an ATDS. Gary v. Gershwin A. Drain Trueblue. The judge ruled that the words “random or sequential” could not be read out of the statutory definition and cited the D.C. Circuit case ACA Int’l v. FCC striking down the FCC’s earlier ATDS rulings.
A Wyoming federal court has found that a Wyoming statute which prohibited political robocalls but allowed certain commercial robocalls was unconstitutional. Victory Processing, LLC, et al. v. Wyoming Attorney General.
Comment: This decision could be very important to our challenge to the TCPA’s cell phone call ban currently before the Fourth Circuit Court of Appeals.