Category: Consumer Issues, Privacy & Data Security

1
Your Money Is No Good Here: U.S. Supreme Court Holds That an Unaccepted Rule 68 Offer of Complete Relief Does Not Moot an Individual’s Claims, but Questions Remain
2
Third Circuit Applies FCC’s New TCPA “Autodialer” Interpretation
3
FCC Hits Companies in Latest Wi-Fi Blocking Inquiries, Proposing $718,000 Penalty, Fueling Further Controversy
4
Sixth Circuit Finds No TCPA Liability For Debt Collection Calls Made To Phone Number Provided After Inception of Credit Relationship
5
FCC Confirms Fax to Email Subject to TCPA, Releases Additional Fax Rulings
6
Company Agrees to $750,000 Penalty to Resolve FCC Inquiry into Wi-Fi Network Management Practices at Convention Center Venues
7
EU Data Protection Supervisor Releases Report on Pending Data Protection Reforms
8
New TCPA Order Holds Few Bright Spots For Businesses
9
Court Awards Individual Plaintiff $229,500 in Damages Under TCPA
10
Update: Sixth Circuit Limits Scope of “Unsolicited Advertisement” under the TCPA

Your Money Is No Good Here: U.S. Supreme Court Holds That an Unaccepted Rule 68 Offer of Complete Relief Does Not Moot an Individual’s Claims, but Questions Remain

By Andrew C. Glass, Gregory N. Blase, Jennifer J. Nagle, Jeremy M. McLaughlin, and Matthew Lowe

On January 20, 2016, the United States Supreme Court issued its decision in Campbell-Ewald Company v. Gomez regarding Rule 68 offers of judgment.[1]  The Court held that a defendant cannot moot a case by merely offering complete relief to a plaintiff but left unanswered whether a defendant may do so by actually providing complete relief.  Nor did the Court reach the question of whether a plaintiff can continue to seek to represent a putative class when his or her individual claims are mooted before a class is certified.

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Third Circuit Applies FCC’s New TCPA “Autodialer” Interpretation

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

The Third Circuit recently applied the FCC’s new interpretation of “automated telephone dialing system” under the Telephone Consumer Protection Act (“TCPA”), which the Commission adopted this past summer in its highly controversial Telephone Consumer Protection Act declaratory ruling.  The court in Dominguez v. Yahoo, Inc. vacated and remanded for further proceedings the district court’s order on summary judgment for Yahoo.

According to the Third Circuit, under the FCC’s newly-formulated definition, a system is an autodialer, and, in general, subject to the TCPA’s prohibition on autodialed calls to wireless numbers absent consent of the called party, if it is “able to store or produce numbers that themselves are randomly or sequentially generated ‘even if [the autodialer is] not presently used for that purpose.’”  In adopting this definition and following the FCC, the Third Circuit focused on the “capacity” element that was at the crux of the FCC’s decision.

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FCC Hits Companies in Latest Wi-Fi Blocking Inquiries, Proposing $718,000 Penalty, Fueling Further Controversy

By Stephen J. Matzura and  Marty Stern

On the heels of a consent decree with a services provider imposing a $750,000 penalty for its Wi-Fi management practices at convention center venues, the FCC slammed another services provider earlier this week for allegedly blocking Wi-Fi access at the Baltimore Convention Center.  In a Commission-level Notice of Apparent Liability (“NAL”), the FCC proposed a $718,000 penalty against M.C. Dean, Inc. for allegedly blocking access to third-party Wi-Fi hotspots during at least 26 days in November and December 2014 at the venue, “apparently” in violation of Section 333 of the Communications Act.

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Sixth Circuit Finds No TCPA Liability For Debt Collection Calls Made To Phone Number Provided After Inception of Credit Relationship

By Joseph C. Wylie and Molly K. McGinley

In Hill v. Homeward Residential, Inc., the Sixth Circuit recently held that a plaintiff could not recover under the Telephone Consumer Protection Act for autodialed calls made to a wireless phone number that the plaintiff provided to the creditor.  In so holding, the Court clarified that a consumer is deemed to have provided express consent to be contacted regarding a debt, so long as the consumer provides his or her wireless phone number “in connection with a debt he owes,” even if the phone number is not provided at the time the debt is created or the credit relationship is initiated.

The plaintiff in Hill obtained a mortgage but did not provide his cell phone number to the mortgage provider when the mortgage was first entered into.  After his mortgage was sold, he voluntarily provided his cell phone number to the new mortgage company on a number of occasions, both orally and in writing.  The successor mortgage provider proceeded to contact him at that number on hundreds of occasions, many of which involved use of a device that the plaintiff contended was an automated telephone dialing system under the TCPA.

The trial court denied summary judgment and allowed the case to proceed to trial on two disputed issues of material fact: whether the device in question was an ATDS, and whether the plaintiff had consented to be called via ATDS on his cell phone.  The jury returned a general verdict in the defendant’s favor, and the plaintiff appealed.

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FCC Confirms Fax to Email Subject to TCPA, Releases Additional Fax Rulings

On August 28, 2015, the Federal Communications Commission, through its Consumer & Governmental Affairs Bureau, issued three separate rulings on petitions relating to its fax rules under the Telephone Consumer Protection Act.

In a declaratory ruling, CGAB clarified that:

  • faxes sent and received over telephone lines are subject to TCPA regulation even if those faxes are “converted to and delivered to a consumer as an electronic mail attachment.”
  • “the consumer to whom the content of a fax or efax is directed,” and not the company hosting the fax servers that receive the faxes over a telephone line and re-send the faxes to the subscriber of the service, is the recipient of the fax under the TCPA.
  • the act of sending a previously-faxed document by email is not subject to TCPA regulation.

CGAB also declined to provide “safe harbor” fax opt-out language, noting that the TCPA rules and orders already set forth the required content for opt-out notices.  Finally, CGAB declined to issue a blanket rule as to whether “third parties, including fax broadcasters, who are retained to accept opt-out requests” are subject to TCPA liability, and instead noted that the question of whether a third party has sufficient involvement in the sending of faxes to create liability is an individualized inquiry.

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Company Agrees to $750,000 Penalty to Resolve FCC Inquiry into Wi-Fi Network Management Practices at Convention Center Venues

By Stephen J. Matzura and Marty Stern

The FCC’s Enforcement Bureau entered into a consent decree with a company (Smart City Holdings, LLC and two of its subsidiaries) to end an investigation into whether the company’s use of enabling technologies for managing and protecting Wi-Fi networks unlawfully blocked personal Wi-Fi access at several convention center venues in Ohio, Indiana, Florida, and Arizona, where the company  provides managed network services.

According to the Bureau, the investigation focused on whether the company’s use of certain network management equipment which automatically deauthenticated personal mobile “hotspots,” used to access the Internet via users’ wireless data plans, complies with Section 333 of the Communications Act, which prohibits willful or malicious interference with the radio communications of any licensed or authorized station.

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EU Data Protection Supervisor Releases Report on Pending Data Protection Reforms

By Marlena Wach

The European Union Data Protection Supervisor, Giovanni Buttarelli, recently released his non-binding recommendations on the draft EU General Data Protection Regulation, which is the subject of a so-called “trilogue” consultative process among officials of the European Commission, European Parliament and Council of Ministers to agree on final language of the regulations.  It is largely expected that once finalized, the GDPR will be adopted before year end 2015, which will require approval by both the European Parliament and the Council of Ministers.   As reflected in an annex to Mr. Buttarelli’s recommendations, the European Parliament and Council of Ministers have differed in their approach to various aspects of the regulations, particularly as to enforcement and sanctions, necessitating the trilogue discussions.

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New TCPA Order Holds Few Bright Spots For Businesses

As originally published in Law360

By Martin L. Stern, Andrew C. Glass, Gregory N. BlaseJoseph C. Wylie and Samuel Castic

On Friday, July 10, 2015, the Federal Communications Commission issued its much-anticipated Declaratory Ruling and Order clarifying numerous aspects of the Telephone Consumer Protection Act. The commission had adopted the order at a particularly contentious June 18, 2015 open meeting (see earlier post), which one commissioner called “a farce” and another described as “a new low … never seen in politics or policymaking.”

In an unusual move, the commission made the order effective on its July 10 release date, rather than following publication in the Federal Register as is typical, providing companies with no opportunity to digest the order and adjust business practices accordingly.

As expected, the order largely brushes aside legitimate business concerns and a sensible approach to TCPA regulation in favor of findings that potentially increase risk for businesses in a variety of circumstances, including the possibility of increased class action litigation. In addition, beyond clarifying that carriers may offer call-blocking technologies to consumers, the order offers little to actually protect consumers from scam telemarketing schemes, including offshore “tele-spammers” that use robocalling or phone-number spoofing technologies.
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Court Awards Individual Plaintiff $229,500 in Damages Under TCPA

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

A recent decision by a New York federal court serves as a stark reminder of the need for companies to adopt and follow robust “do not call” procedures in order to minimize the risk of rapidly escalating statutory damages under the Telephone Consumer Protection Act.  The case appears to be the first to rely on the Federal Communications Commission’s recently-announced but at the time, unreleased TCPA declaratory rulings (previously discussed here).  (The order has just been released, but as of this writing, the link was down.)

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Update: Sixth Circuit Limits Scope of “Unsolicited Advertisement” under the TCPA

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

The Sixth Circuit recently held that a facsimile which lacks commercial components on its face does not constitute an advertisement under the Telephone Consumer Protection Act and ruled that the possibility of remote economic benefit to a defendant is “legally irrelevant” to determining whether the fax violates the TCPA.  The Sixth Circuit’s narrow rule stands out among decisions from other courts that have adopted an expansive interpretation of “advertisement” under the TCPA, and demonstrates that the scope of the TCPA is indeed subject to limitations.

In Sandusky Wellness Center, LLC v. Medco Health Solutions, Inc., the defendant, a pharmacy benefits manager, sent two unsolicited faxes to the plaintiff, a chiropractor.  The faxes informed plaintiff that medications covered by defendant’s health plans could help lower costs for plaintiff’s patients, and directed plaintiff to a complete list of “plan-preferred medications” on defendant’s website.  The faxes, however, did not promote defendant’s services or solicit business from plaintiff.  Nor did the faxes contain pricing, ordering or sales information.  Notably, defendant did not offer for sale any of the identified medicines, either in the faxes themselves or on defendant’s website.

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