July 2022 - Call Compliance News
A bill has been proposed to the U.S. House of Representatives sponsored by Illinois Congressman Raja Krishnamoorthi entitled the “Robotext Scam Prevention Act”. The bill would amend the Telephone Consumer Protection Act (“TCPA”) to remove the words “random or sequential number generator” from the definition of automatic telephone dialing system (“ATDS”) and specifically add texts to that definition. See [LINK]. If the bill passes, the term ATDS would apply to any system which stores or produces telephone numbers to be called or texted and which dials such numbers.
Comment: It is uncertain whether this bill would return courts to the “human intervention” test used prior to the Supreme Court’s Facebook v. Duguid decision, but it would certainly revitalize TCPA class actions being brought against almost any caller or texter.
Federal Communications Commission
On July 7, the Federal Communications Commission (“FCC”) issued cease and desist letters to specified telephone providers authorizing them to stop providing telephone services to senders of prerecorded auto warranty calls generated by Roy Cox Jr., Aaron Michael Jones, and Sumco Panama Companies. The FCC alleged they have made more than 8 billion unlawful prerecorded telephone calls to consumers since 2018. See [LINK].
A California court has dismissed a purported TCPA class action for texts sent to a telephone owned by the son of the Plaintiff. Hall v. Smosh Dot Com, Inc. The court ruled that the TCPA is designed to protect the actual user of the telephone, and therefore the Plaintiff did not have standing to sue.
A Connecticut court has ruled that Subway is not liable for a text sent to a consumer after she replied “STOP” to unsubscribe from texts. Soliman v. Subway Franchisee Advertising Fund Trust, Ltd. The court ruled that the text was not sent using an ATDS because it was sent to a specific telephone number, not a random or sequentially generated number. It also ruled that the text was not an artificial or prerecorded voice.
A bill has been proposed in the Michigan House (HB 6307), similar to the Florida Telephone Solicitation Act, which would create a “mini-TCPA” regulating systems that automatically select or dial telephone numbers. The bill would ban telephone solicitations using recorded messages and permit calls using an automatic dialing device only with express consent.
A New Jersey court has ruled that an auto warranty company could call a consumer after he cancelled a contract, i.e. cancellation of the contract was not a “do-not-call” request. Rowan v. US Dealer Services, Inc. After cancelling a second contract and making a specific “do-not-call” request, the Plaintiff received no further calls.
The court also rejected the Plaintiff’s attempt to shift his argument to a failure to maintain “minimum telemarketing policies and procedures” under the TCPA, holding that the complaint did not make that argument and the Plaintiff could not switch arguments after the complaint.
Comment: The latter argument is interesting as Plaintiffs often allege multiple “violations” in a given call, e.g. failure to train, failure to maintain a “do-not-call” policy, failure to disclose identity of caller, etc. This court rejected that argument on procedural grounds, because it was brought too late. However, other courts have said the call itself can be a violation but there are no damages available for additional violations in each call.
A bill has been proposed in the New York Senate (SB 6701) titled the “New York Privacy Act”, which would regulate data brokers and impose other restrictions on use of consumer data.
An Ohio court has allowed a TCPA claim against an individual Defendant to continue because the Plaintiff alleged the Defendant oversaw the company’s marketing effort, which allegedly violated the TCPA. Spurlark v. Dimension Service Corp. The case involved sales of third-party auto warranties. See [LINK].
Comment: Whether an individual can be liable for the actions of the corporation is known as “piercing the corporate veil” and is unusual. Plaintiffs, however, will often plead broad facts and these pleadings can allow such claims to continue to the discovery phase. Please contact me if you would like to discuss how to avoid liability under the TCPA, particularly individual liability.
In addition, the state of Ohio has filed suit against Aaron Michael Jones and a host of other businesses and companies doing business under names including Technologic USA, XYSM, Virtual Telecom, Sumco Panama, and others. State of Ohio, ex rel Ohio Attorney General Dave Yost v. Jones et al. The complaint alleged that the Defendants have made billions of illegal robocalls since 2018 in relation to sales for vehicle service contracts. It alleges violations of the TCPA, the Telemarketing Sales Rule (“TSR”), and Ohio law. The complaint claims both statutory damages and injunctive relief. It may be that the Plaintiff will seek an order to shut down the businesses pending the lawsuit.
Comment: Preliminary injunctive relief can also be described as “kicking the door down” and is often reserved for fraud or egregious cases. Billions of illegal prerecorded telephone calls likely fit the bill.
A bill has been proposed in the Pennsylvania House of Representatives (HB 2715) which would create a registration system for data brokers, defined as businesses which knowingly collect or sell personal information of a consumer to a third party. If the bill passes, the state will charge $400 annually for registration and assess penalties for failure to register.
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