Category: Areas of Law

1
Eleventh Circuit Holds That a Single, Unsolicited Text Message Does Not Confer Article III Standing Under the TCPA
2
Circuit Court Affirms Holding Reducing TCPA Award by 98%
3
Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders
4
Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams
5
U.S. Supreme Court To Rule On Hobbs Act Deference To FCC’s TCPA Rules
6
FCC Seeks Comment on TCPA Following D.C. Circuit’s Decision in ACA International
7
Congress Holds Hearings on Abusive Robocalls and Caller ID Spoofing – Possible Legislative or Regulatory Changes Requires Close Watch
8
District Court Finds No Violation of First Amendment in TCPA Suit Brought By Coalition of Bi-Partisan Political Organizations
9
Court Finds Website Owner Did Not Send Text Messages Initiated by its Users and thus Did Not Violate the TCPA
10
District Court Dismisses TCPA Class Action for Pharmacy Reminder Calls Under “Emergency Purposes” Exception

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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U.S. Supreme Court To Rule On Hobbs Act Deference To FCC’s TCPA Rules

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

             On November 13, 2018 the U.S. Supreme Court granted certiorari in a Telephone Consumer Protection Act (“TCPA”) case in which the Fourth Circuit vacated the district court’s holding that an unsolicited fax sent by a health information provider offering a free e-book must have a commercial goal to be considered an advertisement under the TCPA.  This case presents important questions as to the scope of judicial deference to the Federal Communication Commission’s (“FCC”) rules under the Hobbs Act, which limits the ability of TCPA litigants to challenge FCC rules in private civil litigation.

In February of this year, the Fourth Circuit held that faxes that offer goods and services, even if the goods and services are free, are “advertisements” under the TCPA, and reversed the district court’s dismissal of the suit.  See Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459, 469 (4th Cir. 2018).  In so ruling, the Fourth Circuit took issue with the district court treatment of a 2006 Rule promulgated by the Federal Communications Commission the FCC interpreting certain provisions of the TCPA.  Pursuant to its statutory authority to “prescribe regulations to implement the requirements” of the TCPA, see 47 U.S.C. § 227(b)(2), the FCC promulgated a rule providing that “facsimile messages that promote goods or services even at no cost . . . are unsolicited advertisements under the TCPA’s definition.”  See Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991; Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25,967, 25,973 (May 3, 2006) (the “2006 Order”).  In the district court, plaintiff Carlton & Harris argued that the fax it received was an unsolicited advertisement as defined in the 2006 Order because it promoted a good at no cost.  Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, No. 3:15-14887, 2016 WL 5799301, at *4 (S.D. W. Va. Sept. 30, 2016).  The district court declined to defer to the 2006 Order, holding that the Hobbs Act did not compel the court to defer to “the FCC’s interpretation of an unambiguous statute.”  Id.  The district court further held that even under the 2006 FCC Rule, PDR Network’s fax was still not an advertisement because the rule requires an advertisement to have a “commercial aim,” and no such aim existed.  Id. Accordingly, it granted PDR Network’s motion to dismiss.

The Fourth Circuit disagreed, holding that the jurisdictional command of the Hobbs Act requires a district court to apply FCC interpretations of the TCPA. See Carlton & Harris Chiropractic, 883 F.3d at 469. The district court therefore erred by engaging in Chevron analysis and “declin[ing] to defer” to the FCC rule and issuing a ruling “at odds with the plaining meaning” of the 2006 Order’s text.  Id. at 462.  Thereafter, PDR Network appealed to the Supreme Court asserting that the Fourth Circuit opinion created a circuit split with the Second, Sixth, Ninth, and Eleventh Circuits, all of which require a “commercial” nexus for faxes promoting free goods or services to be considered “advertisements” under the TCPA.

PDR Network’s petition for a writ of certiorari asks the Supreme Court to resolve the Circuit split regarding whether the Hobbs Act prevents courts from engaging in a typical Chevron analysis of FCC Orders interpreting the TCPA and requires automatic deference to the agency’s order where there has been no challenge to the validity of the order.  It also asks the Court to resolve whether the FCC’s 2006 Order creates a per se rule that faxes that “promote goods and services even at no costs” are “advertisements” under the TCPA or whether courts can require a commercial nexus to a firms’ business in order for such a fax to fall within the definition of “advertisement.”  In granting certiorari, the Supreme Court said it is limiting the certiorari to the question of whether the Hobbs Act required the lower court to accept the FCC’s legal interpretation of the TCPA.

FCC Seeks Comment on TCPA Following D.C. Circuit’s Decision in ACA International

By Joseph Wylie, Molly McGinley, Andrew Glass, Greg Blase, Pamela Garvie, Amy Carnevale, and Nicole Mueller

The Consumer and Governmental Affairs Bureau of the Federal Communications Commission (the “FCC”) recently issued a public notice seeking comment on issues related to interpretation and implementation of the Telephone Consumer Protection Act (the “TCPA”).  The notice followed the recent decision of the United States Court of Appeals for the District of Columbia in ACA International v. FCC, in which the Circuit Court affirmed and vacated in part a rule previously issued by the FCC.  Our prior coverage of ACA International can be found here.

First, the FCC seeks comment on the TCPA definition of “automatic telephone dialing system.”  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.”  The FCC had previously interpreted the term “capacity” to include a device “even if, for example, it requires the addition of software to actually perform the functions described in the definition.” The ACA International Court set that definition aside—finding that the agency’s “capacious understanding of a device’s ‘capacity’ lies considerably beyond the agency’s zone of delegated authority” and that it would have “the apparent effect of embracing any and all smartphones.”  The FCC seeks comment on how to interpret “capacity” in light of the guidance provided in ACA International, specifically seeking comment on how to more narrowly interpret the word “capacity” to better comport with congressional findings and the intended reach of the statute.

The FCC further seeks comment on the functions a device must be able to perform to qualify as an automatic telephone dialing system.  The FCC seeks comment on whether equipment can be considered an automatic telephone dialing system if the equipment cannot itself dial random or sequential numbers.  And the FCC seeks comment on whether the prohibition on making certain calls using an automatic telephone dialing system should apply to equipment that has the ability to use such technology but does not actually use it in making the call.

Second, the FCC seeks comment on how to treat calls to reassigned wireless numbers under the TCPA where the statute carves out calls “made with the prior express consent of the called party” from its prohibitions.  The FCC seeks comment specifically on the definition of “called party:” does it refer to the person the caller expected to reach (or reasonably expected to reach) or the person that the caller actually reached, i.e., the wireless number’s present-day subscriber?  Further, does it include the “customary user” (e.g., the close relative on a subscriber’s family calling plan)?

Third, the FCC seeks comment on how a called party may revoke prior express consent to receive robocalls.  The ACA International Court found that (1) “a party may revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller,” and (2) such a standard means “callers . . . have no need to train every retail employee on the finer points of revocation” and have “every incentive to avoid TCPA liability by making available clearly-defined and easy-to-use opt-out methods.”  The FCC now seeks input on what, if any, opt-out methods exist that would be sufficiently clearly defined and easy to use such that “any effort to sidestep the available methods in favor of idiosyncratic or imaginative revocation requests might well be seen as unreasonable” for unwanted calls (i.e., saying “stop calling” in response to a live caller, offering opt-out through a website, or responding with “stop” to unwanted texts; and whether callers must offer all or some combination of such methods to qualify).

Fourth, the FCC seeks renewed comment on two pending petitions for reconsideration of the FCC’s Broadnet Declaratory Ruling, in which the FCC determined that the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.  The petitions seek reconsideration of the FCC’s interpretation of “persons” under the TCPA, and clarification of whether federal government contractors, regardless of their status as common-law agents, are “persons” under the TCPA.  The FCC now seeks comment on whether contractors acting on behalf of federal, state, and local governments are “persons” for purposes of the TCPA.

Fifth, the FCC seeks renewed comment on the pending petition for reconsideration of its 2016 Federal Debt Collection Rules, which seeks reconsideration of several aspects of the rules, including the applicability of the TCPA limits on calls to reassigned wireless numbers.  Referring to the holding in ACA International, the FCC seeks renewed comment on “this and other issues” raised by the petition.

Comments are due by June 13, 2018 and reply comments are due by June 28, 2018.

This public notice, along with recent congressional hearings considering legislation applicable to telephone calls (previously discussed here), demonstrates that in the wake of ACA International, the laws and regulations applicable to outbound calling will continue to evolve.

 

Congress Holds Hearings on Abusive Robocalls and Caller ID Spoofing – Possible Legislative or Regulatory Changes Requires Close Watch

By Pamela Garvie and Amy Carnevale

The Senate Commerce Committee and House Energy and Commerce Committee held back-to-back hearings late last month on abusive robocalls and caller ID spoofing and how to combat them. Committee members and witnesses both highlighted the fact that robocalls and ID spoofing have “exploded in recent years” and several noted that “over 3 billion calls were placed [in March] alone” and “about a quarter of these calls are scam calls.”  Further, because the technology used to place robocalls and to spoof are evolving technically, the number of calls continues to grow.  There was broad agreement on both committees that consumer education, aggressive Federal Communications Commission (“FCC”) and Federal Trade Commission (“FTC”) enforcement actions, and the use of new ID verification and robocall-blocking technologies are important tools in combating these calls.  However, Republicans and Democrats and business and consumer witnesses are generally split on the question of whether legitimate businesses are part of the problem and whether the Telephone Consumer Protection Act (“TCPA”) needs to be reformed or conversely expanded through new legislation and regulations.  This focus on abusive/illegal robocalls and split on the TCPA presents both risks and potential opportunities for businesses and, consequently, requires close watch.

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District Court Finds No Violation of First Amendment in TCPA Suit Brought By Coalition of Bi-Partisan Political Organizations

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, Michael R. Creta, and Elma Delic

The U.S. District Court for the Eastern District of North Carolina recently rejected a First Amendment challenge to a portion of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b)(1)(A)(iii). In American Association of Political Consultants, Inc., et al. v. Sessions, et al., Case No. 5:16-cv-00252-D (E.D.N.C.), a bi-partisan coalition of political groups sued the federal government.  The coalition asserted that the TCPA’s prohibition on making auto-dialed calls or texts to cell phones without the requisite consent (the “cell phone ban”) imposes a content-based restriction on speech that does not pass strict scrutiny and is unconstitutionally under-inclusive.  (The plaintiffs’ complaint was previously discussed here.) The government defended the TCPA’s constitutionality.

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Court Finds Website Owner Did Not Send Text Messages Initiated by its Users and thus Did Not Violate the TCPA

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Matthew T. Houston

In a recent decision, the U.S. District Court for the Northern District of Illinois found that the host of an automobile website did not violate the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), by providing its users a platform to send automated text messages regarding car listings.  In Serban v. CarGurus, Inc., Case No. 1:16-cv-02531 (N.D. Ill. Mar. 12, 2018), a user of the defendant’s website mistyped her telephone number when attempting to send herself a car listing.  In doing so, the user performed a multi-step process—including selecting the “Send to Phone” option, entering the telephone number, and clicking a “Send” button—to generate a text message automatically created by CarGurus based on the car selected.  As a result of the mistyped telephone number, the text message was transmitted to the plaintiff rather than the user.

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District Court Dismisses TCPA Class Action for Pharmacy Reminder Calls Under “Emergency Purposes” Exception

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

A federal district court recently dismissed a putative Telephone Consumer Protection Act (“TCPA”) class action against CVS Health Corporation (“CVS”) Lindenbaum v. CVS Health Corp., Case No. 17-CV-1863 (N.D. Ohio Jan. 22, 2018), because the reminder calls to renew prescriptions fell within the “emergency purposes” exception of the TCPA.

Plaintiff Shari Lindenbaum alleged that CVS made at least six prerecorded prescription reminder calls to her cellphone in early 2017. She claimed that she received these calls because she had a “recycled” cell phone number — a number that once was used by an individual from whom the caller obtained consent but had since been reassigned to a different individual — and that she had never provided “prior express written consent” to receive the calls.  CVS asked the court to dismiss Lindenbaum’s claims, primarily arguing that the calls fell within the TCPA exception for “emergency purposes.”

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