As Courts Grapple With The Severability of The Federal Debt-Collection Exemption, SCOTUS Is Asked to Resolve The Issue

The 2016 amendments to the TCPA—which created an exemption for calls that are made “solely to collect a debt owed to or guaranteed by the United States”—have inadvertently reshaped the way that TCPA claims are litigated. While early decisions in Indiana, Alabama, and Florida rejected claims under the FCC’s proposed implementing rules because they never became effective, more recent decisions have focused on whether the exemption, and by extension the entire statute, violates the First Amendment.  The first of those was the Fourth Circuit’s decision in American Association of Political Consultants v. FCC, which was soon followed by the Ninth Circuit and the Southern District of Florida.

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District Court Denies Class Certification Due to Lack of Ascertainability

Recently, the Middle District of Florida denied a motion for class certification, finding that the plaintiff had not sufficiently shown that the putative classes were ascertainable. Sliwa v. Bright House Networks, LLC & Advanced Telesolutions, Inc., No. 16-0235, 2019 WL 4744938 (M.D. Fla. Sept. 27, 2019).

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Court Finds that Professional Plaintiffs’ Standing “Boils Down to” Purpose of Phone Line

Last year, this blog analyzed whether and when professional plaintiffs have standing to assert TCPA claims. A Massachusetts District Court recently examined that issue and held that a plaintiff’s standing “boils down to” how a plaintiff uses a given phone line.

In Rhodes v. Liberty Power Holdings, LLC, No. 18-10506, 2019 WL 4645524 (D. Mass. Sept. 24, 2019), the Court examined TCPA claims brought by two representatives of a putative class. One of them, Samuel Katz (“Katz”), fits the profile of a professional plaintiff, as he is a “frequent litigant in TCPA cases” who “closely tracks the telemarketing calls he receives.” Katz has served over two dozen TCPA demand letters and has filed at least nine TCPA lawsuits. In the present matter, he alleges that he received thirteen automated calls to a “residential landline that he maintained for emergencies.”

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Court Finds Plaintiff’s ATDS Evidence Insufficient and Grants Summary Judgment for Defendant

The Southern District of Florida recently granted a defendant’s motion for summary judgment on certain aspects of a plaintiff’s TCPA claim because plaintiff could not establish that defendant used an ATDS to call her cell phone. Johnson v. Capital One Services, LLC, No. 18-CV-62058, 2019 WL 4536998, *1 (S.D. Fla. Sept. 19, 2019).  The case illustrates that a plaintiff must present concrete evidence demonstrating that a defendant used an ATDS in order to survive a motion for summary judgment.  See id. at *3-4.  A plaintiff cannot rely on purported “admissions” obtained from a call agent on the phone or plaintiff’s own subjective characterizations of the call.  Id.

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From the Four Corners of the Pleading: Plaintiffs Cannot Rely On Factual Allegations Outside the Pleadings To Defeat a Motion to Dismiss

The Northern District of Texas recently dismissed a TCPA claim because “the Complaint nowhere alleges that he was called or texted using an ATDS.” The Court’s opinion emphasized that simply asserting that “the text messages were ‘automated’” was not sufficient to state a TCPA claim, and that plaintiffs cannot casually add new factual allegations in their oppositions to a motion to dismiss.

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Court Holds That Text-Messaging System Must Be Able to Randomly or Sequentially Generate Numbers to Qualify as an ATDS

The Northern District of Illinois recently entered summary judgment against a group of plaintiffs because it found the system at issue was not an ATDS.

In Smith v. Premier Dermatology, No. 17-3712, 2019 WL 4261245 (N.D. Ill. Sept. 9, 2019), the Defendants used a proprietary “eRelevance” system to send medical marketing communications by text message to their clients’ customers or patients. Defendant eRelevance Corporation would have its clients provide their current and prospective customer contact information, which would be uploaded into the eRelevance system. Based on client-selected criteria, the system would create lists of contacts, and once eRelevance employees built a text-message marketing campaign, they could push a button to have the system automatically send text messages to each contact on the list.

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Court Denies Class Certification Due to Individualized Issues Regarding Recipients’ Consent to Receipt of Faxes

In E&G, Inc. v. Mount Vernon Mills, Inc., No. 17-0218, 2019 WL 4032951 (D.S.C. Aug. 22, 2019), the District of South Carolina denied class certification because individualized issues—specifically, whether recipients had consented to receive the fax at issue—predominated.

Plaintiff E&G, Inc. (“E&G”), a hotel franchisee of Wyndham Worldwide Corporation (“WWC”), received a fax from WWC that included advertisements from certain approved WWC vendors, including defendant Mount Vernon Mills, Inc. (“Mount Vernon”). E&G’s franchise agreement with WWC allowed WWC to offer assistance with purchasing supplies and to provide lists of preferred suppliers. E&G provided WWC with its fax number and updated its contact information over the course of several years.

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Ninth Circuit Rules Montana’s Ban on Political Robocalls is Unconstitutional

In a unanimous decision earlier this month, the Ninth Circuit ruled that a provision in Montana’s Robocall Statute restricting political messages was unconstitutional. In doing so, the court overturned a district court ruling that found for the state on summary judgment.

In Victory Processing v. Fox, a political consulting firm filed suit against the Attorney General for the State of Montana, alleging that Montana’s prohibition against political robocalls violated its First Amendment rights. The statute at issue, Montana Code section 45-8-216, specifically prohibited five categories of robocalls, including those: “(a) offering goods or services for sale; (b) conveying information on goods or services in soliciting sales or purchases; (c) soliciting information; (d) gathering data or statistics; or (e) promoting a political campaign or any use related to a political campaign.” It was that final provision that Victory Processing alleged was violative of the First Amendment as an invalid content-based restriction on speech.

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New Petition Seeking FCC Clarification That Calls Using Soundboard Technology Are Not “Entirely Prerecorded Calls” Prohibited By the TCPA

The FCC’s TCPA docket now has two pending petitions for declaratory ruling on the question as to whether outbound telemarketing calls made through soundboard technology are prohibited communications if made without prior consent under the TCPA. As we predicted in April 2019, industries using soundboard technology to streamline their telemarketing operations are increasing their efforts before the FCC in seeking review of this very issue.

The FCC recently issued a Public Notice seeking comments on a Petition for Declaratory Ruling filed by Yodel Technologies, a Florida-based company providing other entities with outbound telemarketing services using soundboard technology. The Yodel Petition “fully supports” “a currently pending Petition for Emergency Declaratory Ruling filed by NorthStar Alarm Services, LLC, that sets forth a litany of persuasive reasons why the Commission should rule that use of soundboard technology does not violate the TCPA.” The Yodel Petition also “submits its own justifications” to assist the FCC in reaching this conclusion or, alternatively, in waiving application of any rules prohibiting soundboard technology prior to May 12, 2017.

According to Yodel, as “calls using recorded audio clips specifically selected and presented by a human operator in real-time,” soundboard technology should not be considered “prerecorded voice message.” Yodel argues that the FCC’s 1992 TCPA Report and Order implied that prerecorded voice message only refers to calls and messages that are entirely prerecorded. In support, it observes that the FCC has always been and has only been using examples of fully automated calls when discussing TCPA implementing rules in the past twenty-seven years.Yodel’s Petition emphasizes that a caller’s ability to “ascertain the propriety of proceeding with a message” is an important characteristic in distinguishing between live and prerecorded calls – a view supported by case law in the Ninth Circuit. As such, Yodel advocated that outbound calls using soundboard technology would not be prerecorded calls when live operators would remain “available to interact with every called party from inception.”

After the Supreme Court declined in April 2019 to review a challenge to a Federal Trade Commission decision treating outbound telemarketing calls made through soundboard technology as robocalls, a wave of litigation ensued. Many federal courts, including the Eleventh Circuit (with appellate jurisdiction over Florida), have not examined soundboard technology in the context of TCPA claims in the past. Others have not had a consistent view on soundboard technology. As Yodel put it, clarity is needed because of the “serious reliance interests at stake.”

Interested parties have until October 21, 2019 to submit comments to the FCC on the Petition. Reply comments are due on November 4, 2019. Drinker Biddle’s TCPA team will continue to monitor this docket and related developments.

Florida U.S. District Court Grants Victory for Defendant, Finds its Dialing Equipment Is Not an ATDS

In many TCPA cases, the sufficiency of a plaintiff’s allegations, particularly those concerning the defendant’s alleged use of an automatic telephone dialing system (“ATDS”), are tested at the pleadings stage through a motion to dismiss. No matter which side prevails, a trial court’s ruling at that procedural moment is limited to whether ATDS allegations are plausible—not whether any evidence actually proves that an ATDS was, in fact, used. And because so many lawsuits are resolved through an early settlement, a defendant often does not have a day in court on the question of whether its dialing equipment as configured and used constitutes an ATDS.

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