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.Read More
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.”
Last week a New Jersey federal district court dismissed a putative Telephone Consumer Protection Act (“TCPA”) class action against Kohl’s Department Stores Inc. (“Kohl’s”), Viggiano v. Kohl’s, Case No. 17-0243-BRM-TJB, because plaintiff Amy Viggiano failed to unsubscribe from Kohl’s text messages in the matter in which Kohl’s instructed.
In her putative class action, Viggiano admitted that she had consented to receiving text messages initially, but claimed that she changed her mind and relayed this message to Kohl’s. Viggiano alleged that she sent multiple messages to Kohl’s expressing that she no longer wanted to receive any messages, including messages like “I don’t want these messages anymore.” However, she acknowledged that she never texted the word “STOP” to the defendant, a point which was the focus of Kohl’s motion to dismiss.
Kohl’s argued that it provided a direct opt-out mechanism for customer messaging in compliance with FCC requirements. The terms and conditions to Kohl’s mobile sales alerts instruct customers to respond with one of several words in order to opt-out of future messaging. The opt-out mechanism is triggered by words like STOP, CANCEL, and UNSUBSCRIBE. Viggiano did not text any of the single-word commands that Kohl’s instructed would terminate the text alerts, but instead sent several sentence-long messages. Kohl’s demonstrated that Viggiano received an automated text in reply to her messages which stated “Sorry we don’t understand the request! Text SAVE to join mobile alerts . . . Reply HELP for help, STOP to cancel.” Even accepting the facts in the complaint as true, the court found that Viggiano did not plausibly allege that she had a reasonable expectation that by sending the messages in question, she effectively communicated a request for revocation. Further, Viggiano did not allege that Kohl’s had “deliberately design[ed] systems or operations in ways that make it difficult or impossible to effectuate revocations.” In fact, the court found that the facts in the complaint suggested Viggiano herself adopted a method of opting out that made it difficult or impossible for defendant to honor her request. In dismissing the case, the court rejected Viggiano’s argument that her messages were “unequivocal written withdrawals of consent.”
This decision follows a case with similar facts from the Central District of California, Epps v. Earth Fare, Inc., No. 16-8221, 2017 WL 1424637, at *6 (C.D. Cal. Feb. 27, 2017), which resulted in dismissal on the same grounds. Taken together, these cases suggest that where subscribers to text message alerts are provided with clear instructions on how to revoke consent, a plaintiff’s failure to follow those instructions may provide an effective defense to a claim under the TCPA.
Last week, a bi-partisan coalition of political groups and the federal government completed briefing cross motions for summary judgment in American Association of Political Consultants, Inc., et al. v. Sessions, Case No. 5:16-cv-00252-D (E.D.N.C.). The case challenges the constitutionality of a portion of the Telephone Consumer Protection Act (“TCPA”). The plaintiffs contend that the TCPA’s prohibition on making auto-dialed calls or texts to cell phones without the requisite consent, 47 U.S.C. § 227(b)(1)(A)(iii) (the “cell phone ban”), imposes a content-based restriction on speech that fails to pass strict scrutiny and is unconstitutionally under-inclusive (the plaintiffs’ complaint is discussed here). The government is defending the statute’s constitutionality (previously discussed here).
In their summary judgment briefing, the plaintiffs argued that content-based exemptions to the TCPA’s cell phone ban, such as an exemption for debt collection calls made on behalf of the government, render the cell phone ban unconstitutional. According to the plaintiffs, these exemptions produce outcomes where certain speech is privileged in violation of the First Amendment. In particular, the plaintiffs asserted that the exemptions fail to withstand strict scrutiny because they are not narrowly tailored to further a compelling governmental interest by the least restrictive means available. Further, the plaintiffs rejected the government’s suggestion of severing the disputed exemptions because such action would not curb the power of Congress or the Federal Communications Commission (“FCC”) to promulgate future content-based exemptions.
The government responded to the plaintiffs’ arguments by asserting that the TCPA’s cell phone ban is a content-neutral “time, place, and manner regulation” concerned with restricting the method of calling cell phones, but not the content of those calls. Alternatively, the government asserted that even if the TCPA was found to be a content-based restriction on speech, it would nonetheless survive strict scrutiny because it serves a compelling governmental interest in protecting consumer privacy, is narrowly tailored, and lacks a comparable alternative. The government also argued that the court should not consider certain FCC orders providing exemptions to the TCPA’s cell phone ban because such orders do not call into question the constitutionality of the TCPA itself. Finally, the government argued that should there be a finding that the government-debt exemption is unconstitutional, the court should sever that provision from the cell phone ban and leave the remainder of the TCPA intact.
Although we cannot predict how the court will decide the cross motions for summary judgment, it is significant that the court is set to rule on a broad challenge to the TCPA’s constitutionality. K&L Gates LLP will continue to monitor the case and post developments as they occur.
On June 22, 2017, the Second Circuit affirmed summary judgment for a defendant in a case of first impression, holding that under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), consent to be contacted by telephone cannot be unilaterally revoked by one party when that consent is provided as bargained-for-consideration in a bilateral contract.
In Reyes v. Lincoln Automotive Financial Services, the plaintiff Alberto Reyes, Jr. (“Reyes”) leased a new Lincoln MKZ luxury sedan from a Ford dealership, defendant Lincoln Automotive Financial Services (“Lincoln”). The lease agreement itself provided “express consent” by Reyes for Lincoln to contact him “by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems…. regardless of whether you incur charges as a result.” After the lease agreement was finalized, Reyes ceased making required payments under the agreement. After Lincoln placed multiple calls (using both live and pre-recorded voice messages) to Reyes cellular phone, Reyes allegedly sent a letter to Lincoln revoking his consent to be contacted by Lincoln at that telephone number.
Reyes filed a complaint against Lincoln in the Eastern District of New York, alleging violations of the TCPA and seeking $720,000 in damages. On June 20, 2016, the Eastern District of New York granted summary judgment to Lincoln, holding in part that “the TCPA does not permit a party to a legally binding contract to unilaterally revoke bargained-for consent by telephone.”
In affirming the district court’s ruling regarding revocation of consent, the Second Circuit acknowledged that the Third Circuit and Eleventh Circuit have previously ruled that a party can revoke consent under the TCPA–rulings that were the basis of the FCC’s 2015 Ruling that prior express consent is revocable under the TCPA (discussed here). However, the Second Circuit held that the question presented by the Reyes appeal was different. Unlike the plaintiffs in those cases who gave consent “gratuitously,” in the context of an application process, Reyes’s consent was included as an express provision of his lease agreement with Lincoln.
The Second Circuit rejected Reyes’s argument that under common law, the term “consent” is revocable at any time. While the Second Circuit agreed that the common law definition of “consent” applied to consent in the context of the TCPA, it held that “common law is clear that consent to another’s actions can ‘become irrevocable’ when it is provided in an legally binding agreement.” In such circumstances, any modification to consent must receive the “’mutual assent’ of every contracting party in order to have legal effect.” The Court reasoned “[i]t is black-letter law that one party may not alter a bilateral contract by revoking a term without consent of a counterparty.”
The Second Circuit further deemed “meritless” Reyes’s contention that his consent could be revoked because it was not an “essential term” of his lease. Instead, the Court reasoned that terms of a contract are enforceable even if they are not “essential.” “A party who has agreed to a particular term in a valid contract cannot later renege on that term or unilaterally declare it to no longer apply simply because the contract could have been formed without it.”
The Second Circuit also declined to accept Reyes’s argument that such an interpretation of consent under the TCPA would not further the statute’s remedial purpose of protecting consumers from unwanted telephone calls. Finding “no lack of clarity in the TCPA’s use of the term ‘consent,’” the Court rejected application of the remedial rule of statutory interpretation. In doing so, the Second Circuit recognized that businesses may insert consent clauses into standard sales contracts “thereby making revocation impossible in many instances,” but held that this “hypothetical concern” would be for Congress to resolve, not the Courts.
This ruling may provide a strong defense to revoked-consent claims brought against defendants by those in contractual relationships with those defendants. It remains to be seen whether the reasoning set forth by the Second Circuit will be adopted by other courts.
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.
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.
On Monday, the Grand Chamber of the European Court of Human Rights (ECHR) ruled that an Estonian commercially-run Internet news portal was liable for the offensive online comments of its readers. This was the first case in which the court had been called upon to examine a complaint about liability for user-generated comments on an Internet news portal.
In its grand chamber judgment in the case of Delfi AS v. Estonia (application no. 64569/09), the ECHR held, by 15 votes to two, that there had been no violation of Article 10 (freedom of expression) of the European Convention on Human Rights.
The ECHR has a final say, above any other national jurisdiction, on matters related to the European Convention on Human Rights and its judgments have a huge influence in courts all across the Continent. Read More
By Stephen J. Matzura and Marty Stern
Earlier this week, the FCC released a Report and Order (R&O), adopting new innovative sharing rules for a 150 MHz swath of spectrum in the 3.5 GHz band, including 100 MHz of federal government spectrum. Under the regime adopted by the FCC, dubbed the Citizens Broadband Radio Service (CBRS), much of the spectrum will be available for the provision of broadband services on an unlicensed “General Authorized Access” basis, though some of the spectrum will be set aside for short-term Priority Access Licenses (PALs) awarded via auction for individual census tracts.
By Marty Stern and Stephen J. Matzura
The FCC’s Open Internet order was published today in the Federal Register, kicking off the 60-day deadline to appeal the rules to a federal circuit court of appeals (or seek reconsideration before the FCC). As we previously discussed, some parties have already filed appeals in various circuits, which have been consolidated in the D.C. Circuit.
Significantly, with publication in the Federal Register, key aspects of the rules go into effect in 60 days, on June 12, 2015, including reclassification of broadband Internet access as a Title II service, as well as the no blocking, no throttling, paid prioritization, and enforcement/complaint provisions of the Open Internet order.