On Friday, the Attorney General of the United States responded to a lawsuit brought by a bi-partisan coalition of political groups challenging the constitutionality of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). In American Association of Political Consultants, Inc., et al. v. Lynch, Case No. 5:16-cv-00252-D (E.D.N.C.) (previously discussed here) the plaintiffs seek a declaration that the TCPA violates the First Amendment. The lawsuit asserts that the statute imposes a content-based restriction on speech that fails to pass strict scrutiny.
The Seventh Circuit recently reaffirmed its holding in Bridgeview Health Care Ctr., Ltd. v. Clark, Nos. 14-3728 & 15-1793 (7th. Cir. 2016), which established that agency principles apply in determining whether a fax was sent “on behalf of” a sender under the TCPA.
On June 16, 2016, the court in Paldo Sign & Display Co. v. Wagener Equities, Inc., No. 15-1267, 2016 WL 3348738 (7th Cir.) held that TCPA fax regulations do not impose strict liability on entities whose products or services are being promoted by third parties. In Paldo, a company sued Wagener Equities under the TCPA after receiving an unsolicited fax promoting Wagener’s services. That same communication allegedly was faxed to over ten thousand recipients via a third party distributor, Marketing Research, also known as B2B, which exposed Wagener to potential damages exceeding five million dollars. Paldo maintained that Wagener was liable for B2B’s transfer of the faxes despite never having approved the ads.
On July 5, 2016, the Federal Communications Commission (the “FCC” or “Commission”) released a Declaratory Ruling clarifying that the Telephone Consumer Protection Act (the “TCPA”) does not apply to autodialed or prerecorded- or artificial-voice phone calls, including text messages, made by the federal government and its contractors who are acting within the scope of their authority. The FCC did not address whether the TCPA continues to apply to state and local governments and their agents.
Last week a California federal court ruled that Twitter, Inc. is liable under the Telephone Consumer Protection Act (“TCPA”) for tweets it sent via text message to the new owner of a recycled cell phone number. The Court found that the online social networking service was the “sender” of the tweets, as that term is defined under the statute, rather than the authors of the tweets or the former owner of the cellphone who opted to receive the text messages. In doing so, the Court reiterated the Federal Communications Commission (the “FCC”)’s previous caution that where autodialers are utilized to make robocalls to a wireless number, it is the caller – and not the wireless recipient of the call – who bears the risk that the call was made without the prior express consent required under the statute. The Court also found that Twitter could not be shielded from liability under the Communications Decency Act of 1996.
On May 18, 2016, the Senate Commerce Committee held a hearing to examine the TCPA’s effects on businesses and consumers, and assess whether the law is ripe for reform. The TCPA will mark its 25-year anniversary this coming December and, according to Senate Commerce Committee Chairman John Thune (R-SD), is “showing its age.” (The hearing transcript may be found here.)
The Committee members who spoke at the hearing were, in general, divided on party lines on the need for reform. Republicans noted the rising tide of TCPA litigation – now the second most filed type of case in federal courts – and the corresponding costs in terms of money outlays, delays in providing consumers with important health, safety, and financial information, and lost innovation opportunities. They also noted that the average payout to plaintiffs’ attorneys in TCPA suits is approximately $2.4 million, while the average consumer award is just $4.12. Senator Roy Blunt (R-MO) observed that Congress needs to figure how to address two very different problems — the problem of scam robocalls being generated from overseas and the problem of legitimate businesses trying to reach people whose numbers have been reassigned.
On Monday, the United States Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins, — U.S. — (No. 13-1339). In rendering its decision, the Court reiterated that to establish Article III standing, a plaintiff must plead an injury-in-fact that is both particular to the plaintiff and concrete. The Court explained that whether a plaintiff has pleaded sufficient facts to allege a concrete injury requires more than just examining whether the plaintiff has pleaded that the defendant violated a federal statute. In particular, the Court held that “a bare procedural violation, divorced from any concrete harm,” does not suffice to “satisfy the injury-in-fact requirement of Article III.” As such, the Spokeo plaintiff’s allegation that the defendant’s actions had violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq., would not, by itself, demonstrate a plausible injury-in-fact. Rather, “Article III standing requires a concrete injury even in the context of a statutory violation.”
In its May 9, 2016, ruling in Siding and Insulation Co. v. Alco Vending, Inc., the Sixth Circuit rejected the application of traditional agency principles to determine whether a company was liable for faxes sent “on its behalf.” Instead, the Sixth Circuit held that the FCC’s 1995 Order, imposing liability on “the party on whose behalf a solicitation is made,” represented the FCC’s decision not to base TCPA liability for fax activity on a vicarious liability analysis. In so holding, the Sixth Circuit joins the Eleventh Circuit in adopting this analysis, and rejects the vicarious-liability analysis recently adopted by the Seventh Circuit for fax activity.
Although the primary target of the TCPA is telemarketing and commercial solicitations, certain TCPA restrictions, including prohibitions on the use of prerecorded voice messages and automatic telephone dialing systems (“ATDS”) for calls placed to cellular phones, 47 U.S.C. § 227(b)(1)(A)(iii); 47 C.F.R. § 64.1200(a)(1)(iii) (hereinafter “the cell phone ban”), apply with equal force to calls made by political campaigns.
On May 12, 2016, several political organizations, American Association of Political Consultants, Inc. (“AAPC”), Democratic Party of Oregon, Inc. (“DPO”), Public Policy Polling, LLC (“PPP”), Tea Party Forward PAC (“TPF”), and Washington State Democratic Central Committee (“WSDCC”) (collectively, “Plaintiffs”), brought a First Amendment challenge to the prohibition on making unsolicited calls to wireless telephone numbers by filing a declaratory judgment action in the United States District Court for the Eastern District of North Carolina against the Attorney General of the United States. American Association of Political Consultants, Inc., et al. v. Lynch, No. 5:16-cv-00252-D (E.D.N.C. May 12, 2016).
The Eighth Circuit Court of Appeals recently reversed a trial court’s decision not to certify a TCPA class on grounds that the proposed class was not ascertainable. In so doing, the Eighth Circuit declined to adopt the Third Circuit’s heightened standard for ascertainability as a “separate, preliminary requirement” for class certification. In the published opinion, the Court articulated its own “rigorous analysis of Rule 23 requirements, which includes that a class ‘must be adequately defined and clearly ascertainable.’”
In Sandusky Wellness Center, LLC v. Medtox Scientific, Inc., Plaintiff alleged that MedTox, a toxicology lab, transmitted a single-page fax to approximately 3,000 fax numbers, all recorded onto a log in the plaintiff’s possession. Plaintiff moved to certify a class that included all people in the four years prior to the action’s filing who received a fax message from Medtox regarding lead testing services that did not display a proper opt-out notice. The district court, in denying class certification, held the plaintiff failed to show ascertainability because it could not establish who was included in the class. The trial court focused on the potential for multiple claimants with respect to individual faxes, noting that the class could be seen as including both the subscriber of the telephone line on which the fax was received, and the intended recipient of the fax.
In the wake of Campbell-Ewald v. Gomez, in which the Supreme Court held that an unaccepted Rule 68 offer of complete relief does not moot a plaintiff’s individual claims, the Third Circuit recently held that an unaccepted settlement offer “has no force” and therefore neither the plaintiffs’ individual claims nor the class claims in the suit were mooted by defendant’s offer of full relief prior to the filing of a motion to certify a class in Weitzner et al. v. Sanofi Pasteur Inc. et al. (Our previous analysis of Campbell-Ewald can be found here.)