Although, as we have previously covered, decisions from various courts have already established that a plaintiff must do more than simply allege that a TCPA defendant used an automatic telephone dialing system (“ATDS”) to make calls that allegedly violate the TCPA, two recent decisions help illustrate the level of specificity in pleading required to survive a motion to dismiss. Depending on the District Court, that level does not appear to be exceedingly high.
In Martin v. Direct Wines, the plaintiff alleged that the defendants used an ATDS to make two calls to his cell phone for the purpose of selling wine. No. 15 C 757, 2015 U.S. Dist. LEXIS 89015 (N.D. Ill. July 9, 2015). The plaintiff’s complaint alleged that the defendants used “Five9 or similar dialer technology” and that the technology “constitutes an automatic telephone dialing system . . . because it had the capacity to dial phone numbers without human intervention. The complaint further alleged that “discovery will show precisely what dialer technology was used.” The Northern District of Illinois found these allegations insufficient to survive a motion to dismiss because the plaintiff simply parroted the language of the TCPA and made conclusory allegations that the defendants used an ATDS. The court noted that in order to raise the right to relief above a speculative level, the plaintiff must include facts such as “a description of a ‘robotic sound of the voice on the other line,’ . . . a lack of human response when [the plaintiff] attempted to have a conversation with the caller, having heard a distinctive ‘click and pause’ after having answered the call, or anything else about the circumstances of the call that led him to believe that it was made with an ATDS.
On the other hand, in Isgett v. Northstar Location Services, LLC, the District of South Carolina found that the plaintiff had sufficiently pled that the defendant used an ATDS where the complaint alleged that “[a] number of calls placed to the Plaintiff’s cellular telephone by Defendant were made through the use of an automatic telephone dialing system as defined by 47 U.S.C. § 227” where the plaintiff also plead additional facts that would support a reasonable inference that the defendant used an ATDS. No. 4:14-cv-4810-RBH, 2015 U.S. Dist. LEXIS 89252 (D. S.C. July 2, 2015). The plaintiff alleged that the defendant “made several phone calls within a twenty-four hour period, used six different telephone numbers, placed calls from [a] telephone number . . . using an automated dialer, and made calls to collect an alleged debt.”
Although the plaintiff in Isgett pled more facts regarding the circumstances surrounding the allegedly infringing calls than the plaintiff in Martin, the complaint in Isgett did not contain any of the facts noted by the Martin court as being absent from the Martin plaintiff’s complaint. Thus, while a defendant should be successful in obtaining dismissal of a complaint that only offers a conclusory allegation about the use of an ATDS, the two recent decisions imply that the inclusion of a minimal level of other facts about the calls that could infer the use of an ATDS may be enough to defeat a motion to dismiss.
As we previously noted, three petitions for review were filed in the immediate aftermath of the FCC’s Declaratory Ruling. On Friday, July 24, 2015, the Judicial Panel on Multidistrict Litigation issued a Consolidation Order that consolidated and randomly assigned those three appeals to the United States Court of Appeals for the D.C. Circuit. A copy of the Consolidation Order is available here.
As anticipated, additional challenges to the FCC’s July 10, 2015 Declaratory Ruling and Order are being filed across the country (we reported earlier that ACA International first filed a petition for review on July 10, 2014). PACE (the Professional Association for Customer Engagement, Inc.) filed its petition for review with the United States Court of Appeals for the Seventh Circuit on July 14, 2015. See Prof’l Ass’n for Customer Engagement, Inc. v. FCC, No. 15-2489 (7th Cir. filed July 14, 2015). On the same day, Sirius (Sirius XM Radio, Inc.) filed a virtually identical petition for review with the United States Court of Appeals for the District of Columbia Circuit. See Sirius XM Radio, Inc. v. FCC, No. 15-1218 (D.C. Cir. filed July 14, 2015). PACE and Sirius challenge the FCC’s “expan[sion] [of] the TCPA’s reach by sweeping in calls to wireless numbers made from equipment that lacks the present capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator,’ and ‘to dial such nmbers.’” Pace Petition at 2; Sirius Petition at 2. Both petitioners also challenge the FCC’s definition of the term “‘called party’ for purposes of the TCPA’s consent provisions as the ‘current subscriber (or non-subscriber customary user of the phone)’ rather than the ‘intended recipient.’” Pace Petition at 3; Sirius Petition at 2-3. PACE and Sirius ask the D.C. and Seventh Circuits to hold unlawful and vacate the FCC’s Declaratory Ruling and Order. Pace Petition at 3; Sirius Petition at 3.
Now that petitions have been filed in at least two different courts of appeals, upon notice from the FCC, the Judicial Panel on Multidistrict Litigation will randomly select one court of appeals from among the court of appeals in which petitions have been filed and issue a subsequent order consolidating the petitions for review in the selected venue. See 28 U.S.C. § 2112. Stay tuned as we will continue to provide updates on additional challenges to the FCC’s Declaratory Ruling and Order, as well as the selected venue for these petitions.
While the July 10, 2015 Declaratory Ruling and Order (our summary of which can be found here) was released after the close of business on Friday, one petitioner has already filed a petition for review of the Declaratory Ruling: ACA International (the Association of Credit and Collection Professionals) (“ACA”). ACA filed its petition for review with the United States Court of Appeals for the District of Columbia Circuit on July 10, and filed an amended petition on July 13. See ACA Int’l v. FCC, No. 15-1211 (D.C. Cir. filed July 10, 2015). ACA challenges the FCC’s “treatment of ‘capacity’ within the definition of an automatic telephone dialing system,” the FCC’s “treatment of predictive dialers,” and the FCC’s interpretation of the term “‘prior express consent’ (including its treatment of reassigned numbers.” Amended Petition for Review at 2-3, ACA Int’l v. FCC, No. 15-1211 (D.C. Cir. filed July 13, 2015), Doc. No. 1562251. ACA asks the DC Circuit to hold unlawful the FCC’s treatment of “capacity” and compel the FCC to “treat ‘capacity’ in a way that comports with a caller’s right of due process and free speech;” hold unlawful the FCC’s treatment of “predictive dialers” and compel the FCC to “treat them in a way that does not expand the statutory definition . . . beyond the definition that Congress enacted;” and hold unlawful the FCC’s treatment of “prior express consent, including the Commission’s treatment of reassigned numbers,” and compel the Commission to establish either a “viable safe harbor for autodialed ‘wrong number’ non-telemarketing calls to reassigned wireless numbers” or “define ‘called party’ as a call’s intended recipient.” Id. at 4-5.
More than three weeks after its contentious June 18th open meeting, the FCC has finally issued its Declaratory Ruling and Order. Our TCPA team is reviewing its 138 pages (including separate statements from each Commissioner) and will report back shortly.
In June, the Internet Association (“IA”)—which represents Internet giants such as eBay, Facebook, Google, Amazon, LinkedIn and Twitter, among others—suggested that the FCC clarify that Internet companies which “facilitate their users to communicate” are not “not caller[s] or sender[s] (or the initiator[s] of a call or text) for purposes of the TCPA.” In a letter dated June 11, 2015, the IA addressed what it viewed as an uncertainty under TCPA law: namely the extent to which any email and/or social media platform may potentially be liable under the TCPA for the calls or messages initiated by any one of the enormous number of users of the platform.
We previously advised that the FCC’s Enforcement Bureau, in an unusual move, on June 11 published a letter it sent to PayPal warning that PayPal’s proposed changes to its User Agreement that contained robocall contact provisions might violate the TCPA. These proposed revisions conveyed user consent for PayPal to contact its users via “autodialed or prerecorded calls and text messages … at any telephone number provided … or otherwise obtained” to notify consumers about their accounts, to troubleshoot problems, resolve disputes, collect debts, and poll for opinions, among other things. The Bureau’s letter highlighted concerns with the broad consent specified for the receipt of autodialed or prerecorded telemarketing messages and the apparent lack of notice as to a consumer’s right to refuse to provide consent to receive these types of calls.
On June 29, prior to the revisions coming into effect, PayPal posted a notice on its blog stating: “In sending our customers a notice about upcoming changes to our User Agreement we used language that did not clearly communicate how we intend to contact them.” PayPal clarified that it would modify its User Agreement to specify the circumstances under which it would make robocalls to its users, including for important non-marketing reasons relating to misuse of an account, as well as to specify that continued use of PayPal products and services would not require users to consent to receive robocalls.
The FCC’s Enforcement Bureau immediately put out a statement commending PayPal for its decision to modify its proposed contact language, noting that these changes to the User Agreement represented “significant and welcome improvements.” The Bureau’s very public actions on this matter signal to businesses everywhere of the need to review existing “consent to contact” policies. Certainly the FCC’s yet to be released Declaratory Ruling on TCPA matters that was voted on during a contentious FCC Open Meeting on June 18 may also invite that opportunity.
The District of South Carolina recently rejected the argument that TCPA claims must be dismissed if a plaintiff does not specify the telephone number that was allegedly called. See Williams v. Bank of America, No. 14-4809-RBH (D.S.C. June 19, 2015).
Bank of America moved to dismiss on the grounds that the complaint parroted the elements of the TCPA rather than alleging facts that would establish a TCPA violation. Specifically, Bank of America argued that the plaintiff failed to (1) specify the telephone number it allegedly called, (2) plead facts showing that she received the calls from an ATDS, and (3) plead facts showing that it placed the alleged calls without her consent. With respect to the first issue, Bank of America relied on the Western District of Michigan’s decision in Strand v. Corinthian Colleges, Inc., No. 13-1235 (W.D. Mich. Apr. 17, 2014), which as we discussed last year dismissed the claim of a plaintiff who refused to plead her telephone number. The Strand court agreed with the defendant’s argument that “if a plaintiff is not required to provide her cellular telephone number,” defendants could not “reasonably determine if a violation occurred” and plaintiffs could “extort settlements from defendants by imposing asymmetric discovery costs on them, contrary to the policy aims of Iqbal and Twombly.”
The Williams court disagreed. It noted that the Fourth Circuit has yet to address the question of whether Rule 8 requires plaintiffs to include their phone number in their complaints, and then rejected Strand and held that a mere “allegation that [d]efendant called her cellular telephone provides adequate notice to [d]efendant of its conduct alleged to have violated the TCPA. Defendant may obtain information regarding the telephone number it allegedly called through discovery; the phone number is not necessary to put [d]efendant on notice of its alleged conduct.”
Also noteworthy is that the Williams court permitted plaintiff to move forward with a seemingly redundant state law claim for failure to train and supervise that is “premise[d] [on the argument] that [d]efendant owed her a statutory duty of care under the TCPA.” The court explained that plaintiff’s “claims indicate that the TCPA is designed to prevent automated telephone calls made without the recipient’s consent and that she belongs to the broad class of citizens the federal statute is designed to protect.” Accepting the truth of plaintiff’s allegations for purposes of the motion, the court found that “[p]laintiff’s complaint includes plausible factual statements that reasonably support the existence of a statutory duty of care owed by [de]fendant to [p]laintiff.”
The FCC has posted the video of and statements from yesterday’s Open Meeting. A compilation of the Commissioners’ written statements on TCPA issues is also available here. We will report back when the Commission issues its ruling.