Archive: May 2016

1
Senate Commerce Committee Calls Up the TCPA for Review
2
Supreme Court Decision on Article III Injury-in-Fact in Spokeo Potentially Impacts Class Certification
3
Sixth Circuit Rejects Application of Agency Principles to Fax Broadcast Liability Under TCPA
4
Political Organizations Mount First Amendment Challenge to TCPA’s Cell Phone Ban Restricting Autodialed and Prerecorded Voice Calls to Constituents
5
Eighth Circuit Articulates New Ascertainability Standard in TCPA Class Actions

Senate Commerce Committee Calls Up the TCPA for Review

By Pamela J. Garvie and Peter V. Nelson

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.

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Supreme Court Decision on Article III Injury-in-Fact in Spokeo Potentially Impacts Class Certification

By Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, Molly K. McGinley, Roger L. Smerage, and Eric W. Lee

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.”

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Sixth Circuit Rejects Application of Agency Principles to Fax Broadcast Liability Under TCPA

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller, Courtney E. Torres

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.

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Political Organizations Mount First Amendment Challenge to TCPA’s Cell Phone Ban Restricting Autodialed and Prerecorded Voice Calls to Constituents

By Joseph C. Wylie II, Molly K. McGinleyCourtney E. Torres

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).

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Eighth Circuit Articulates New Ascertainability Standard in TCPA Class Actions

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller, Courtney E. Torres

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.

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