TCPA Watch

Business, legal and policy developments under the Telephone Consumer Protection Act.

 

1
Second Circuit Goes Against the Tide; Adopts Broad Definition of Autodialer
2
COVID-19: UPDATED Emergency and Healthcare Calls and Texts
3
COVID-19: NY State of Emergency Imposes Ban on Telemarketing Calls
4
Strength in Numbers: The Seventh Circuit Joins the Third and Eleventh Circuits in Limiting the Definition of an Automatic Telephone Dialing System under the TCPA
5
Eleventh Circuit Holds That a Single, Unsolicited Text Message Does Not Confer Article III Standing Under the TCPA
6
Circuit Court Affirms Holding Reducing TCPA Award by 98%
7
Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders
8
Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams
9
FCC Votes to Create Reassigned Numbers Database
10
District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit

Second Circuit Goes Against the Tide; Adopts Broad Definition of Autodialer

By Joseph C. Wylie IIMolly K. McGinley, and Sarah K. Bauman

In Duran v. La Boom Disco, Inc., the Second Circuit adopted a broad definition of an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  The Second Circuit joined the Ninth Circuit, further deepening the circuit split on the definition of ATDS with the Third, Seventh, and Eleventh Circuit.

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COVID-19: UPDATED Emergency and Healthcare Calls and Texts

Authors: Joseph C. Wylie IIMolly K. McGinley, and Nicole C. Mueller

UPDATE: Since our original publication, the Federal Communication Commission issued interpretive guidance on applicability of the emergency purpose exclusion, discussed below.

In the current environment, companies face a need to communicate with customers and patients about the impact that coronavirus (“COVID-19”) will have on their ability to provide goods and services. Companies should be aware of how the Telephone Consumer Protection Act, 42 U.S.C. §. 447 et seq. (the “TCPA”) may impact their calling and texting practices. This alert discusses certain exemptions to the TCPA that may allow companies to continue to contact clients and customers through automated and prerecorded phone calls and texts regarding the COVID-19 outbreak. Businesses can and should continue to contact clients as needed, with carefully tailored messages, to provide necessary updates regarding the COVID-19 pandemic.

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COVID-19: NY State of Emergency Imposes Ban on Telemarketing Calls

By Joseph C. Wylie IIMolly K. McGinley, and Nicole C. Mueller

On Saturday, March 7, 2020, Governor Andrew Cuomo declared a disaster state of emergency in the State of New York based on the COVID-19 outbreak. One significant consequence is that under a newly-enacted law, unsolicited telemarketing calls to New York residents are now prohibited during a state of emergency.

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Strength in Numbers: The Seventh Circuit Joins the Third and Eleventh Circuits in Limiting the Definition of an Automatic Telephone Dialing System under the TCPA

By Andrew C. GlassGregory N. BlaseJoseph C. Wylie IIMolly K. McGinleyHollee M. Boudreau, and Adam R.D. Paine

The Seventh Circuit recently acted to limit the definition of “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). In Gadelhak v. AT&T Services, Inc., [1] the court ruled that a dialing system that “neither stores nor produces numbers using a random or sequential number generator,” but rather “exclusively dials numbers stored in a customer database,” “is not an ‘automatic telephone dialing system’ as defined by the Act.” In construing the definition of ATDS narrowly, the Seventh Circuit joined the interpretation adopted by the Third and Eleventh Circuits and rejected the Ninth Circuit’s differing interpretation.

ANALYSIS

In Gadelhak, the plaintiff asserted that the defendant impermissibly used an automatic telephone dialing system to text him without his prior express consent. The defendant had texted the plaintiff using a system that drew on a database containing the numbers of existing customers. The district court entered summary judgment for the defendant, ruling that the defendant’s system did not constitute an ATDS under the TCPA.

On appeal, the Seventh Circuit first concluded (as the Second and Ninth Circuits had done) [2] that receipt of unwanted text messages can constitute a concrete injury-in-fact for Article III standing purposes. The Seventh Circuit then proceeded to examine the statutory definition of an ATDS to determine whether the definition encompassed defendant’s system, concluding that it did not. [3]

The TCPA defines an “automatic telephone dialing system” 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.” [4] The defendant asserted that as a grammatical matter, the phrase “using a random or sequential number generator” modifies both the terms “store” and “produce.” The defendant then outlined how a different form of equipment from its system could store numbers using a random or sequential number generator such that the defendant’s interpretation would not render the term “store” mere surplusage. [5] Under the defendant’s interpretation, dialing systems that draw numbers from an existing database neither store nor produce numbers using a random or sequential number generator and thus cannot constitute an ATDS for TCPA purposes. [6]

After methodically considering the various grammatical interpretations of the definition of “automatic telephone dialing system,” the Seventh Circuit agreed with the defendant, rejecting the Ninth Circuit’s interpretation of ATDS urged by the plaintiff. [7] The Ninth Circuit had previously read the phrase “using a random or sequential number generator” as modifying only a system’s capacity to “produce” telephone numbers. [8] But the Seventh Circuit noted that such a broad interpretation would sweep into the definition of ATDS all equipment with the capacity to store and dial telephone numbers, including “[e]very iPhone today [which] has … capacity [to store telephone numbers and call or text them automatically] right out of the box.” [9] The Seventh Circuit found that this far-reaching result was well outside the intended plain-meaning of the statute.

The emerging trend narrowing the definition of an ATDS follows in the wake the D.C. Circuit’s 2018 decision rejecting the Federal Communications Commission’s broad definition of an ATDS. [10] The FCC issued notices in May and October 2018 inviting public comment concerning the interpretation of an ATDS but has yet to issue a revised definition.

CONCLUSION

The Seventh Circuit’s decision that a system which places calls using an existing database of numbers does not qualify as an ATDS will be of assistance to businesses operating within the Seventh Circuit in defending against TCPA lawsuits. And the split between the Third, Seventh, and Eleventh Circuits, on the one hand, and the Ninth Circuit, on the other, may eventually spur the Supreme Court to provide its own interpretation of the definition of ATDS.

NOTES

[1] — F.3d —, 2020 WL 808270, at *1 (7th Cir. Feb. 19, 2020).

[2] Melito v. Experian Mktg. Sols., Inc., 923 F.3d 85, 92-93 (2d Cir.); Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1042-43 (9th Cir. 2017).

[3] Gadelhak, 2020 WL 808270, at *3.

[4] 47 U.S.C. § 227(a)(1).

[5] Gadelhak, 2020 WL 808270, at *4-5.

[6] Id. at *4.

[7] See Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1050 (9th Cir. 2018), cert. dismissed, 139 S. Ct. 1289, 203 L. Ed. 2d 300 (2019).

[8] See id.Gadelhak, 2020 WL 808270, at *5-6. The Ninth Circuit was recently asked to reconsider the Marks decision to bring its interpretation of an ATDS under the TCPA into accord with the Third, Seventh, and Eleventh Circuits. See Lamkin v. Portfolio Recovery Assocs., No. 19-16947 (9th Cir.).

[9] Gadelhak, 2020 WL 808270, at *6.

[10] ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018).

Eleventh Circuit Holds That a Single, Unsolicited Text Message Does Not Confer Article III Standing Under the TCPA

By Andrew C. Glass, Gregory N. Blase, and Hollee M. Watson

In a recent decision, the Eleventh Circuit held that a plaintiff’s receipt of a single, unsolicited text message does not constitute an injury sufficient to confer standing necessary to pursue a viable claim under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. The holding in Salcedo v. Hanna – F.3d —, 2019 WL 4050424 (11th Cir. Aug. 28, 2019), has created a circuit split on the issue of Article III standing under the TCPA—a split which may cause the Supreme Court to clarify the scope of its decision in Spokeo, Inc. v. Robins (previously discussed here). In Spokeo, the Court addressed the question of what constitutes a concrete injury sufficient to establish Article III standing to pursue a statutory cause of action (there, the Fair Credit Reporting Act). But lower courts have interpreted and applied Spokeo in differing ways. The Eleventh Circuit decision may also have the effect of curbing TCPA class actions. Plaintiffs in that circuit will now have to allege and prove the sufficient concrete harm caused by their receipt of text messages.

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Circuit Court Affirms Holding Reducing TCPA Award by 98%

By Joseph C. Wylie II, Molly K. McGinley, and Nicole C. Mueller

In Golan v. FreeEats.com d/b/a ccAdvertising et al., the Eighth Circuit recently affirmed a trial court’s decision to reduce a TCPA judgment by approximately 98% on the grounds that an aggregate award of approximately $1.6 billion was unreasonable and disproportionate to the offense, and therefore unconstitutional.  In so holding, the Eighth Circuit deviated from long-standing case law rejecting constitutional challenges to the amount of statutory damages allowed under the TCPA.  If the Eighth Circuit’s analysis is adopted more widely, it could bring a needed measure of rationality to awards under the TCPA.

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Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders

Authors: Joseph C. Wylie, Molly K. McGinley, Nicole C. Mueller

Last week, in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., Case No. 17-1705 (2019), the Supreme Court declined to decide the level of deference that courts must afford the Federal Communications Commission (the “FCC”), finding that the answer may depend on resolution of two preliminary issues that had not been decided by the lower courts. The matter has been remanded to the Court of Appeals for the Fourth Circuit. In declining to reach the issues presented, the Supreme Court leaves open the crucial question of whether courts are bound by the FCC’s interpretation of the Telephone Consumer Protection Act (“TCPA”).

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Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams

By Pamela Garvie, Amy Carnevale, Andrew Glass, Gregory Blase, Joseph Wylie, Molly McGinley, and Hollee Watson

Sen. John Thune (R-SD), member of the Senate Commerce Committee and chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet, and Sen. Ed Markey (D-MA), also a member of the Commerce Committee and author of the Telephone Consumer Protection Act (“TCPA”), recently reintroduced the Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act, S. 151. The TRACED Act is identical to the version as originally introduced in November 2018 (and previously discussed here). The bill seeks to prevent illegal robocall scams and other intentional violations of the TCPA.

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FCC Votes to Create Reassigned Numbers Database

By: Joseph C. Wylie, Molly K. McGinley, and Nicole C. Mueller

            The Federal Communications Commission (the “FCC”) has adopted new rules (set forth in its Second Report and Order) to establish a single, nationwide database with information provided by phone companies that will allow callers to determine whether a number has been permanently disconnected and is therefore eligible for reassignment. The FCC also voted to provide a safe harbor from liability for any calls to reassigned numbers caused by database error. The database will be administered by a private company to be determined through a competitive bidding process. The FCC also voted to provide a safe harbor from liability for any calls to reassigned numbers caused by database error.  The database will be administered by a private company to be determined through a competitive bidding process. 

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District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit

By Joseph C. Wylie II, Molly K. McGinley, and Lexi D. Bond

A district court in Illinois recently dismissed a lawsuit against Yahoo!, Inc. (“Yahoo”) alleging violations of the Telephone Consumer Protection Act (“TCPA”), reversing its previous decision denying summary judgment. In Johnson v. Yahoo! Inc., Case No. 14-cv-2028 (N.D. Ill. Nov. 29, 2018), the court granted Yahoo’s motion for reconsideration based on recent interpretations of the definition of an automatic telephone dialing system (“ATDS”) under the TCPA, particularly the decision in ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018) (previously discussed here).  In its ruling, the district court rejected prior Federal Communication Commission (“FCC”) pronouncements and adopted a narrow interpretation of ATDS, holding that only a system that actually dials randomly or sequentially generated numbers can be an ATDS.

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