Another court has observed that a billion-dollar aggregate liability under the TCPA likely would violate due process, adopting the Eighth Circuit’s reasoning that such a “shockingly large amount” of statutory damages would be “so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable.”
Given how often TCPA cases are filed—and how often they push the envelope of the statute’s scope and the courts’ jurisdiction—it should come as no surprise that the Supreme Court is often asked to bring some sanity to the statute’s enforcement. Last year was no exception.
For example, a plaintiff petitioned the Supreme Court to reverse the Third Circuit’s decision that facsimiles that merely ask to confirm contact information are not “advertisements” for purposes of the TCPA. Such facsimiles are advertisements, the plaintiff had argued, because businesses send them “to enhance the accuracy of their database and thus increase their profits.” That may be so, the Third Circuit held, but that does not mean that they qualify as “advertisements” that promote goods or services. “After all,” the court observed, “a commercial entity takes almost all of its actions with a profit motivation.” The Supreme Court declined to review that decision in November. See Robert W. Mauthe, M.D., P.C. v. Optum, Inc., No. 19-413, 2019 WL 6257433 (U.S. Nov. 25 2019).
It can fairly be said that the statutory definition of “automatic telephone dialing system” (“ATDS”) has generated far more questions than answers—for courts and litigants alike. This is especially true in the wake of ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018), where the D.C. Circuit set aside the FCC’s sweeping interpretation of the ATDS definition, and thus handed the baton back to the Commission to provide guidance on what is (and is not) an ATDS. But almost two years later, the FCC has yet to issue its ruling.
In the many TCPA cases that turn on the definition of ATDS, defendants may wish to file a motion to stay the action so that the court can await guidance from the FCC’s anticipated ruling on this issue. Indeed, over the course of the last year, multiple federal judges, at least in Florida, have been willing to grant such motions, particularly because the ATDS definition is also center stage in an appeal pending before the Eleventh Circuit. See Glasser v. Hilton Grand Vacations Co., LLC, No. 18-14499 (11th Cir. filed Oct. 24, 2018).
As predicted, amendments to the TCPA – in the form of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (the “TRACED Act”) – were signed into law by the President of the United States on December 30, 2019. The Chairman of the Federal Communications Commission (FCC) applauded this milestone on Twitter, commenting: “[T]he TRACED Act was signed into law, giving the FCC and law enforcement greater authority to go after scammers.” As the saying goes, with great power comes great responsibility: the enactment started the countdown for a long list of actions that the FCC is required to take during 2020 and beyond. This will add to the already active TCPA dockets at the FCC.
We share below the timeline for these actions to help our readers anticipate and prepare for the regulatory activities that will ensue. We summarized the content of these required FCC actions previously at this post.
Senate Bill 151, now called “the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act” (the “TRACED Act”), has been reconciled with the House of Representatives’ bipartisan bill House Bill 3375 and was passed in the House on December 4, 2019. This revised amendment has been returned to the Senate for a final vote and is expected to become final legislation “if not this week, then next week,” according to the bill’s sponsor, Representative John Thune. Thus, the prospects for passage of TCPA legislation currently look quite positive.
As drafted, the legislation will kick off a number of activities by the FCC, and may, as a practical matter, require the agency to take prompt actions on long-awaited rulings on critical statutory definitions. We highlight below some of the most notable revisions in the TRACED Act made since July 2019.
Does a “call placed in violation of the Telephone Consumer Protection Act, without any allegation or showing of injury—even that plaintiffs heard the phone ring—suffice to establish concrete injury for purposes of Article III [of the Constitution?]” Recently, Dish Network petitioned the Supreme Court to resolve this question and overturn a verdict rendered by a North Carolina federal jury that was later trebled to $61 million and upheld by the United States Court of Appeals for the Fourth Circuit. Briefing on Dish Network’s petition is now complete and we now await the Court’s decision on whether it will review the case.
The Eleventh Circuit last week issued a common-sense ruling vacating class certification in a TCPA case—an area of the law where common sense does not always prevail. In Cordoba v. DIRECTV, LLC, No. 19-12077 (11th Cir. Nov. 15, 2019), the named plaintiff claimed that DIRECTV violated the TCPA when Telecel, the company it had contracted with to provide telemarketing services, failed to maintain an internal “do-not-call list” of individuals who had requested not to receive telemarketing calls on behalf of DIRECTV. Cordoba sought to represent a class of all persons who had received more than one telemarketing call during the period of time that Telecel had failed to maintain a do-not-call list for DIRECTV. The district court certified the class, failing to consider that the class as defined would include many members—mostly members, potentially—who had never asked to be placed on the do-not-call list. Having never made this request, the Eleventh Circuit said, those members lacked standing because their injuries were not traceable to Telecel’s alleged failure to maintain the list. Furthermore, because distributing an award would require the district court to confirm whether a class member had a traceable injury, individualized inquiries predominated over common questions. The district court’s failure to consider these individualized questions of standing and predominance doomed its certification order.
As we previously discussed, the need for clarification as to the TCPA’s treatment of outbound calls made using soundboard technology (“soundboard calls”) is particularly manifest in light of two pending petitions before the FCC and the Supreme Court’s refusal to review the FTC’s decision to treat soundboard calls as robocalls subject to the Telemarketing Sales Rules. [See here and here]. Plaintiffs have sought to exploit the uncertainty; a spate of lawsuits contend that soundboard calls are prerecorded calls prohibited by the TCPA if made without prior consent. Recently, the Western District of Oklahoma attempted to set a standard for the permissibility of these calls, but the decision may only engender more uncertainty. While professing that soundboard calls are not “categorically prohibited,” the court’s ruling fails to provide a roadmap for what types of soundboard calls would be permissible, beyond stating that a “soundboard call which did not interact with the customer except in preprogrammed not to mention meaningless ways” violated the TCPA.
Soundboard technology allows call center agents to interact with consumers on a real-time basis using a combination of audio clips and the agent’s own voice. Because a live agent selects the audio clips to play based on the statements made by the called party, companies using or offering the technology have argued that these calls feature a degree of human interaction that means they should not be considered “prerecorded calls” subject to the consent requirements of the TCPA.
The Central District of California recently granted summary judgment to the defendant on a TCPA claim in Mendoza v. Allied Interstate LLC, SACV 17-885 JVS (KESx), 2019 WL 5616961 (C.D. Cal. Oct. 22, 2019), finding that the plaintiff had not sufficiently proven revocation of consent to be called about two credit card accounts when he had revoked consent to be called about two other accounts serviced by the same card issuer.
In the span of fifteen days, TCPA defendants in two separate cases asked the U.S. Supreme Court to review two distinct but interwoven Ninth Circuit decisions on the constitutionality of the TCPA. Specifically, Facebook, Inc. and Charter Communications, Inc. are each asking the Court to rule that the TCPA’s prohibitions on calls made using an ATDS or an artificial or prerecorded voice contravene the First Amendment because they are “content-based” restrictions on speech and that the Ninth Circuit erred in “remedying” the constitutional violation—by severing the TCPA’s exemption for calls made to collect a government debt—rather than invalidating the entire statute. Facebook, Inc. v. Duguid, Petition for Writ of Certiorari, No. 19-511 (Oct. 17, 2019) (“Facebook Petition”); Charter Commc’ns, Inc. v. Gallion, Petition for Writ of Certiorari, No. 19-575 (Nov. 1, 2019) (“Charter Petition”). The two cases represent the most recent escalation of the growing trend in litigation challenging the TCPA’s ability to withstand First Amendment scrutiny.