September 2020 - Call Compliance News
United States Supreme Court
The U.S. Supreme Court has scheduled oral argument in Facebook v. Duguid for December 8, 2020.
Comment: This case involves a challenge to the definition of “automatic telephone dialing system” (“ATDS”) often used by plaintiffs in Telephone Consumer Protection Act (“TCPA”) class actions, i.e. any equipment which can dial without human intervention, or could be modified to dial without human intervention. It seems obvious that anything, e.g. a rock, a wooden desk etc. could be modified with enough hardware and software to be an ATDS under this definition.
Second Circuit Court of Appeals
The Second Circuit Court of Appeals has affirmed a ruling against Todd Bank, which dismissed his TCPA claim against Alarm.com. His claim did not contain any allegation that Alarm.com caused him harm, and the trial court judge dismissed the case without explanation. The appeals court affirmed the ruling, noting that written explanations, while preferred, are not required.
Comment: Bank is a lawyer, but has filed many TCPA suits on his own behalf. He is very litigious, and this ruling shows his home courts are unlikely to give him deference.
Eleventh Circuit Court of Appeals
In another huge case for TCPA class actions, the Eleventh Circuit Court of Appeals has ruled that plaintiffs’ lawyers can no longer pay named plaintiffs extra “incentive payments” in TCPA or other class action settlements. Johnson v. NPAS Solutions. The court noted these payments tend to “promote litigation.”
Comment: As this ruling makes clear, it is the plaintiff’s attorneys who are the real parties of interest in these cases, standing to make one third or more of millions of dollars in settlements, while the class members each receive a small payment.
Federal Communications Commission
On September 16, 2020, the Federal Communications Commission (“FCC”) issued a guide regarding how to stop illegal robocalls and texts. See https://www.fcc.gov/consumers/guides/stop-unwanted-robocalls-and-texts. One tool the FCC is implementing is caller ID authentication, set to be in place by July 2021.
Comment: The TCPA has been a hammer, crushing many legitimate businesses making legal calls and texts. It is refreshing that the FCC is focusing on illegal activity by issuing this guide.
The FCC issued a declaratory ruling on a petition that sought to determine whether messages that are initiated and received in digital form are governed by the TCPA, or whether they should be treated as email. The FCC ruled that “an online service cannot itself print a fax and thus is plainly not ‘equipment which has the capacity … to transcribe text or images (or both) from electronic signal received over a regular telephone line onto paper’ and thus does not meet the statutory definition of a ‘telephone facsimile machine.’” In re Matter of Joseph T. Ryerson & Son, Inc. See https://docs.fcc.gov/public/attachments/DA-20-1038A1.pdf.
Federal Trade Commission
The Federal Trade Commission (“FTC”) and four states have entered a consent decree with a professional fundraiser and its owners barring them from engaging in fundraising for other charities in the future. FTC v. Outreach Calling. The settlement includes a financial penalty of more than $56 million, the vast majority of which was suspended.
The FTC also entered a consent decree with five individuals who allegedly charged illegal upfront fees and made false promises to consumers struggling with student loan debt. The settlement resolves FTC litigation against Arete Financial Group and several related companies and requires defendants comply with the Telemarketing Sales Rule (“TSR”) in the future
A Florida court ruled that spending “one minute” to review a single fax sent by email does not equate to Article III injury-in-fact and dismissed the a junk fax class action complaint. Daisy, Inc. v. Mobile Mini. The court noted that if it had been sent to a regular fax machine, where plaintiff could have incurred printing costs, the outcome may have been different.
A trial judge has ruled that the TCPA does not allow businesses to sue for allegedly illegal texts they received on their cell phones. Chenette v. Porch.com.
Comment: This is a big deal as the TCPA rules on the use of an ATDS does not explicitly exempt calls to businesses. Judge Stephen Bough ruled that Congress did not intend the TCPA to apply to calls to businesses, and these businesses therefore lacked standing to bring this case.
In another loss for Todd Bank, a trial court enforced a settlement he entered with Verde Energy, but attempted to cancel when he allegedly received a call from the defendant on the date of the settlement. Because the settlement released all claims through the date of the settlement, the trial court enforced his own agreement against him.