The Telephone Consumer Protection Act James P. Berg, partner PIB Law Chad Fuller, partner Troutman Sanders LLP Stuart M. Richter, partner Katten Muchin Rosenman LLP Deborah Solmor, Chief Compliance Officer & Deputy General Counsel, Career Education Corporation
The FCC July 10, 2015 Declaratory Ruling Appeals are underway - 11 companies joined a consolidated appeal to attack key parts of the ruling as unlawful ( ACA Int’l v FCC ) and the D.C. Circuit Court of Appeals heard Oral Argument on October 19, 2016. The appeal focuses on three main issues: 1. The definition of ATDS; 2. Who the called party is for purposes of calls to cell phones and reassigned numbers; and 3. Revocation of consent to call a cell phone. 1
Oral Argument Before the DC Court of Appeals Each side allotted 20 minutes but arguments lasted for more than 3 hours Each of the three judges expressed skepticism at some part of the FCC’s position It is unclear whether the D.C. Circuit would send issues back to the FCC for revisions or make some sort of substantive ruling 2
Automatic Telephone Dialing Systems The TCPA defines an ATDS as: "equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." 47 U.S.C. § 227(a)(1) The key feature of an ATDS is the capacity to dial numbers without “human intervention. ” 3
Human Intervention Some Courts hold that any system where a call or message is triggered by human intervention is not an ATDS. See, e.g., Luna v. Shac, LLC, 122 F.Supp.3d 936 (N.D.Cal. Aug. 19, 2015) Other Courts reject a “but - for” type of analysis. See, e.g., Sherman v. Yahoo! Inc ., 150 F.Supp.3d 1213 (S.D.Cal. Dec. 14, 2015) The FCC has declared that “how the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination. ” In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 , 30 FCC Rcd. 7961, 7977 (2015).
One Response to FCC’s Human Intervention Standard Pozo v. Stellar Recovery Collection Agency , (Case No. 8:15-cv-929-T-AEP) (M.D. Fla. Sept. 2, 2016) A clicker application known as HCI (Human Call Initiator) held not to be an automatic telephone dialing system (ATDS) Even under the standards of the FCC’s July 2015 Declaratory Ruling, the Court stated the application was not an ATDS because, among other reasons, the system lacked the potential capacity to autodial because the system “required its representatives to manually dial all calls” so it lacked the capacity to make any calls without human intervention.
Takeaway from DC Circuit Oral Argument: What is an ATDS? Judges seemed to grasp the issue related to “capacity” and what it means to store or produce numbers to be called Judges appeared concerned about concept that a smartphone could be an ATDS 6
Takeaway from DC Circuit Oral Argument: Wrong Party Calls Judges expressed concern with one free call/text rule – what if you text someone and he or she doesn’t respond – how could that be “constructive notice” of number reassignment 7
Takeaway from DC Circuit Oral Argument: Revocation of Consent ACA argued revocation must be “reasonable” One judge accused the FCC attorney of not understanding how a business works when he suggested that any method of communication of revocation was reasonable 8
Article III Standing and the TCPA Spokeo v. Robins , 136 S.Ct. 1540 (2016) Decided under Fair Credit Reporting Act but applies equally to TCPA claims Congress cannot erase Article III standing requirements by granting the right to sue to a plaintiff who has not suffered “concrete and particularized” harm 9
Spokeo Standing Requirements Anton Ewing v. SQM US, Inc. , 2016 U.S. Dist. LEXIS 143272 (S.D. Cal. Sept. 29, 2016) • The Ewing court reasoned that the plaintiff’s bare procedural violation — i.e., that he “incurred a specific charge for Defendant’s call to his cellular telephone”— was not an injury traceable to Defendant’s alleged usage of an ATDS in violation of the TCPA, and therefore the plaintiff lacked standing. Elisa R. Romero v. Dept Stores Nat’l Bank , 2016 U.S. Dist. LEXIS 110889 (S.D. Cal. Aug. 5, 2016) (same judge as Ewing ) • Plaintiff does not offer any evidence of a concrete injury caused by the use of an ATDS, as opposed to a manually dialed call. • Each alleged violation is a separate claim, meaning Plaintiff must establish standing for each violation, which means that Plaintiff must establish an injury in fact caused by each individual call. • One singular call, viewed in isolation and without consideration of the purpose of the call, does not cause any injury that is traceable to the conduct for which the TCPA created a 10 private right of action, namely the use of an ATDS to call a cell phone.
Spokeo Standing Requirements Gerardo Aranda v. Caribbean Cruise Line , 2016 WL 4439935 (N.D. Ill. Aug. 23, 2016) • It does not matter whether plaintiffs lack additional tangible harms like loss of cell phone battery life, actual annoyance, and financial losses; Congress has identified that such unsolicited telephonic contact constitutes an intangible, concrete harm, and plaintiffs have alleged such concrete harms that they, themselves suffered. Their injuries are concrete and particularized, traceable to defendants' conduct, and judicially redressable. A.D. v. Credit One Bank , 2016 WL 4417077 (N.D. Ill. Aug. 19, 2016) (same judge as Aranda) • [The TCPA] directly forbids activities that by their nature infringe the privacy-related interests that Congress sought to protect by enacting the TCPA. There is no gap — there are not some kinds of violations of section 227 that do not result in the harm Congress intended to curb, namely, the receipt of unsolicited telemarketing calls that by their nature invade the privacy and disturb the solitude of their recipients. 11
The Professional TCPA Plaintiff Courts Dismissing Claims • Stoops v. Wells Fargo , 2016 WL 3566266 (W.D. Pa, June 24, 2016) (Professional Plaintiff lacked constitutional and prudential standing) • Telephone Science Corporation v. Asset Recovery Solutions, LLC , 2016 WL 4179150 (N.D. Ill August 8, 2016) (Professional Plaintiff had constitutional but lacked statutory standing under TCPA) • Kinder v. Allied Interstate, Inc ., 2010 WL 2993958 (Super Ct. Cal. August 2, 2010) ( unpublished decision ) (upholding dismissal of claims against 75 defendants when vexatious litigant failed to post $1.5 million security bond) 12
The Professional TCPA Plaintiff Courts Finding Standing • Fitzhenry v. ADT Corp. , 2014 WL 6663379, at *5 (S.D. Fla. Nov. 3, 2014) (plaintiff who acquired several different numbers to get a higher volume of auto-dialed calls had standing based on allegations he received “unwanted” telemarketing calls) • Martin v. Comcast Corp., 2013 WL 6229934, at *2 (N.D. Ill. Nov. 26, 2013) (refusing to dismiss claims “merely because [plaintiff] files lots of these cases ”) • Martin v. Bureau of Collection Recovery, 2011 WL 2311869, at *4 (N.D. Ill. June 13, 2011) (“Characterizing Plaintiff as a ‘professional plaintiff’ does not boost [Defendant’s] argument in this discovery motion or any arguments in response to Plaintiff’s motion for class certification ”) 13
Challenging Standing: A Double Edged Sword Its not always about whether a Plaintiff can sue, but where. Medallin v. Ikea, No. 15-55174 (9 th Cir. January 13, 2017)(not for publication) • Ninth Circuit reversed district court order decertifying class based on lack of standing and ordered dismissal of Zip Code case without prejudice at Plaintiff’s request. • Mocek v. AllSaints USA, No. 1:16-cv-08484 (N.D. Ill.) Defendant removed FACTA case and then sought dismissal based on lack of standing. District court remanded case and assessed over $50,000 in fees. The TCPA provides for Concurrent Jurisdiction. 14
Future TCPA Trends: Makeup of the FCC • The FCC is directed by five commissioners appointed by the president of the United States and confirmed by the U.S. Senate for five-year terms, except when filling an unexpired term. The president designates one of the commissioners to serve as chairman. Only three commissioners may be members of the same political party, and none can have a financial interest in any commission-related business. • Democratic Chairman Tom Wheeler has announced his intention to resign on Jan. 20, 2017. • The Senate has failed to reconfirm Democratic Commissioner Jessica Rosenworcel for another term. 15
Future TCPA Trends: Makeup of the FCC • President Trump will likely tap Ajit Pai as his pick to lead the FCC in the new administration, elevating the sitting GOP commissioner to the top spot overseeing the nation's communications industry, according to four industry sources familiar with decision. • Pai could take the new role immediately and wouldn't require approval by the Senate because he was already confirmed to serve at the agency. • There will likely be an immediate shift in power. That may have a dramatic impact on key aspects of the July FCC ruling if the DC circuit upholds the ACA challenges and returns the issues back to the FCC. 16
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