January 2006 - Call Compliance News
The FCC has published its initial request for comments regarding regulations implementing the Junk Fax Prevention Act of 2005. Comments regarding the required fax opt-out notice as well as other aspects of the junk fax compliance rule are due thirty (30) days after this notice is published in the federal register with reply comments due forty-five (45) days after that publication. The Notice is likely to be published in the Federal Register in the coming month. Class actions have already been filed under the new statute despite the fact that the FCC has not yet published and adopted the regulations necessary to enforce the law’s terms.
The FCC has also announced receipt of another preemption petition with regard to state law. In this petition, a coalition of groups have asked the FCC to preempt state fax laws which differ from the TCPA, and to end the practice of hearing preemption petitions on a case-by-case basis. Comments are due January 13, 2006 and can be filed electronically at the FCC website. Preemption is an important question as uniformity helps consumers, regulators, and businesses so you should file comments if this issue affects your business.
The Federal Trade Commission has sworn in William E. Kovacic as the FTC’s newest commissioner. Mr. Kovacic replaces Commissioner Thomas B. Leary whose term ended.
The FTC has filed suit against a marketer of adjustable beds alleging violation of the national “do-not-call” list. The suit claims the company made more than 900,000 illegal calls including calls to persons on the national “do-not-call” list, “abandoned” calls, and failed to pay for the national do-not-call list. The company’s calls purported to survey consumer desires. The suit also named the company’s chief executive officer.
The Canadian Radio Television and Telecommunications Commission (CRTC) will establish a Canadian “do-not-call” registry applicable to unsolicited telecommunication in that country. There will be a good faith defense and violations by individuals will be payable by fines of $1,500 while corporations violating the list will be liable for fines of $15,000. The list will contain an exemption for calls 18 months from a purchase or 6 months from an inquiry to consumers.
A Georgia federal court has heard a challenge to the FCC’s rule making that faxes are permitted to established customers of the sender absent a “do-not-fax” request. The Court ruled that the Eleventh Circuit Court of Appeals is the proper entity to handle this challenge. This will be a very important test of the TCPA’s exemption of faxes sent to established customers. The Supreme Court has ruled that agency rules like this one are entitled to deference from court review unless unreasonable or contrary to the express directions of Congress. Under this standard, these regulations will likely survive court review.
A bill has been proposed in the Missouri Senate which would add businesses to the state “do-not-call” list. Because state “do-not-call” lists are permissible based on the right of privacy, and because the right of privacy applies only to individuals, businesses can not constitutionally be included on state or federal “do-not-call” lists. If this bill were passed, it likely would be struck down as unconstitutional. Missouri’s legislature is also controlled by the Republican party and has been at odds with Missouri’s Democrat Attorney General on “do-not-call” list, and other issues, for the past legislative sessions.
A bill has been proposed which would add political calls to those regulated under the state “do-not-call” list. This bill has little chance of passage.
Nevada has ruled that state courts can hear TCPA cases. Every state court which has decided this issue has held, ultimately, that states can hear TCPA claims absent some state action denying state courts this authority.
The New York Court of Appeals has affirmed a lower court ruling that the TCPA can not be used for class actions in the State of New York. State law does not allow class actions in cases where damages are set by the statute. The TCPA provides for damages of $500.00 and more for unsolicited facsimiles.
A federal judge in Manhattan has rejected a class action lawsuit against Clear Channel which alleged that prerecorded calls sent by radio stations to consumers violated the TCPA. The judge deferred to the FCC’s ruling that these types of calls were permitted.
The Ohio Court of Appeals has upheld a judgment against a plaintiff’s firm who has filed many TCPA actions. The Court ruled that the TCPA does not provide a private right of action for many of the “violations” alleged in TCPA cases. Failure to include disclosures, identifying information, etc. is not subject to the private cause of action which does apply to the actual sending of the fax. Thus, private plaintiffs can not “lump on” many additional violations to their claim (thus increasing settlement value of the case). It is standard practice for a TCPA private plaintiff to claim many additional “violations” besides the call or fax itself, and claim that damages for each should be trebled for knowing violations. Using this method, I have seen a plaintiff claim damages of more than $20,000 for a statute intended by Congress to result in $500 per call in damages. An attorney who attended the hearing noted that at least one appellate judge was very critical of the plaintiff’s counsel in this case. While TCPA plaintiffs, especially those who are not represented by counsel, often get deference from courts, this case shows that abusive plaintiffs eventually will lose. Most of these plaintiffs count on quick settlements from businesses they threaten.
A Bill has been pre-filed in the Pennsylvania House which would bar telemarketing on legal holidays. Several other states have similar rules. Please call or email if you would like a copy of our current curfew chart. The issue of differing state curfews (from the federal 8 a.m. to 9 p.m. standard) is one part of the preemption dispute currently before the FCC.
The Texas Public Utilities Commission has proposed an amendment to its regulation regarding the electric “do-not-call” list. Texas is the only state which has “do-not-call” lists applicable solely to entities which call consumers regarding change of electric utility provider. The amendment would limit registration on the electric list to non-residential electric consumers.