Facebook and U.S. Government Submit Final Briefs in Supreme Court ATDS Fight, Oral Argument to Follow

This week, Facebook and the United States government filed responses to Plaintiff’s brief in Facebook, Inc. v. Duguid, the Supreme Court case that promises to resolve the circuit-splitting uncertainty over what does and does not qualify as an ATDS under the TCPA.  The Plaintiff’s brief—which we covered here—argues that the adverbial phrase “using a random or sequential number generator” modifies the verb “to produce” but not the verb “to store” in the statute’s definition of an ATDS.  See 47 U.S.C. § 227(a)(1).  If the TCPA is interpreted in this fashion, liability could follow from using any device that can store and automatically dial a number—including, among other things, virtually every smartphone in use today.

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District Court Decertifies TCPA Class Due to Consent Issues

The Central District of California recently decertified a class of TCPA plaintiffs because consent issues were so individualized that the plaintiffs could not satisfy the predominance requirement. Trenz v. On-Line Administrators, Inc., No. 15-8356, 2020 WL 5823565 (C.D. Cal. Aug. 10, 2020). The case highlights that a defendant can defeat certification by showing that class members provided their numbers in different “transactional contexts,” which can give rise to individualized issues regarding the existence and scope of consent.

In 2008, Volkswagen Group of America, Inc. (“Volkswagen”) launched its Target and Retain Aftersales Customers (“TRAC”) program. Id. at *1. Through this program, it paid for over 900 dealerships across the country to retain Peak Performance Marketing Solutions, Inc. (“Peak”) to place service reminder calls to their customers. Id. A class action alleging the use of autodialers and automated voices to make calls without the plaintiff’s consent eventually followed. Id.

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Save the Date. The TCPA: The Year Behind and Year Ahead

Please join us on Thursday, December 10 at 12:30 p.m. eastern for a lively roundup of recent developments and hot topics hosted by Faegre Drinker’s Telephone Consumer Protection Act (TCPA) team. Our attorneys will convene government and industry professionals to offer insight and perspective on a variety of issues, including the definition of an autodialer, trends in defending and settling TCPA cases, and the regulatory implications of the election and pandemic, among other much-buzzed-about subjects. We will post more information in the coming week, including a formal agenda for the three panels.

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Despite Absence of Settlement, Unclaimed Funds To Be Distributed To Government Or Charity Rather Than Revert To Dish Network

Last week, the federal judge presiding over a class action against Dish Network (“Dish”) denied a request for reversion of $11 million in unclaimed funds, deciding instead that the funds—which were the product of a trial rather than a settlement—should escheat to the government or be donated to a charity.  See Krakauer v. Dish Network, LLC, No. 14-0333 (M.D.N.C. Oct. 27, 2020).

In denying Dish’s request for reversion, the court explained that “[t]he TCPA is a deterrence statute, and reversion does not support th[at] statutory goal.”  Id. at 10.  It then cited cases for the proposition that unclaimed funds should not revert to a defendant if doing so would undermine the deterrence function of damages.  Id. at 5 (citing In re Lupron Mktg. & Sales Practices Litig., 677 F.3d 21, 32-33 (1st Cir. 2012); Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1307 (9th Cir. 1990)).

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Single Fax Received by E-Mail Deemed Insufficient to Confer Article III Standing

As we have reported here and here, courts throughout the country, including most notably the Eleventh Circuit in Salcedo v. Hanna, have grappled with the question of whether a single unsolicited text message may constitute sufficient injury to satisfy the constitutional standing requirement in Article III. The Salcedo court held that one text message does not suffice.

But what about a single fax? That was the question recently presented to the Middle District of Florida in Daisy, Inc. v. Mobile Mini, Inc., No. 20-0017 (M.D. Fla. Sept. 24, 2020). The court similarly found that, at least under the relatively unique circumstances of the case, a single fax did not confer standing.

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Spooktacular Severability Ruling Raises Barr From The Dead, Buries TCPA Claims Arising Between November 2015 and July 2020

A few weeks ago, the Eastern District of Louisiana held that courts cannot impose liability under Sections 227(b)(1)(A) or (b)(1)(B) of the TCPA for calls that were made before the Supreme Court cured those provisions’ unconstitutionality by severing their debt collection exemptions.  The first-of-its-kind decision reasoned that courts cannot enforce unconstitutional laws, and severing the statute applied prospectively, not retroactively. Plaintiffs privately panicked but publicly proclaimed that the Creasy decision was “odd” and would not be followed.

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Senators, State AGs, and Consumer-Protection Groups File Amicus Briefs Advocating Broad Interpretation of ATDS Definition

Last Friday, various elected officials and consumer-protection groups filed amicus briefs urging the Supreme Court to adopt the expansive interpretation of the ATDS definition for which Plaintiff Noah Duguid had advocated in a brief he filed the week before.  The recent briefs and other filings in the case can be found here.

The Facebook case arises from a security-alert text message that was sent to an individual who had not consented to automated calls, and at long last presents the Court with the critical question of what is and is not an ATDS.  (Recall that the FCC has said, and courts have either held or assumed, that text messages should be deemed “calls” for purposes of the TCPA.)

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Plaintiff in Facebook v. Duguid Files Supreme Court Brief Supporting Broad Interpretation of ATDS Definition

The Plaintiff in Facebook, Inc. v. Duguid—the case that promises to resolve the growing circuit split over the TCPA’s definition of an ATDS—has filed his merits brief in the Supreme Court.

Recall that the TCPA defines an ATDS as equipment that has the capacity “(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”  47 U.S.C. § 227(a)(1).  With help from noted grammarian Bryan Garner, who signed the brief as his new co-counsel, Duguid argues that the language of the statute and the canons of construction make clear that the adverbial phrase “using a random or sequential number generator” modifies the verb “to produce” but not the verb “to store.”  For example, he argues that the “distributive-phrasing canon” requires that modifying phrases apply only to words “which, by context, they seem most properly to relate.”  Brief at 20.  Because the verb “to store” does not in his view relate to the phrase “using a random or sequential number generator,” he argues that the Court need not interpret the phrase as modifying “to store.”  Id.; see also id. at 15 (calling this outcome a “semantic mismatch between a modifier and a verb”).  He similarly argues that the “last-antecedent canon”—which provides that a modifying phrase “should ordinarily be read as modifying only the [verb] that it immediately follows”—counsels in favor of construing the adverbial phrase as modifying only the adjacent verb “to produce” and not the other verb “to store.”  Id. at 20-21.

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First-of-its-Kind Decision Rejects Liability for Calls Made Before Supreme Court Cured TCPA’s Unconstitutionality by Invalidating Debt-Collection Exception

Charter Communications may have just helped literally thousands of TCPA defendants snatch victory from the jaws of defeat.

As our regular readers know, the Supreme Court recently held in Barr v. AAPC that a recent addition to the TCPA—specifically, an exemption for calls to collect federal debts—was a content-based regulation of speech that violated the First Amendment. It then severed that exception from the rest of the statute, and in doing so dashed the hopes of defendants that had advocated for invalidating all of the statute’s restrictions on automated telephone equipment.

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FCC Proposed Rulemaking Presents an Opportunity to Reshape Some Existing TCPA Exemptions

Over the years, one of the biggest challenges many businesses face when assessing TCPA risks posed by a new calling or texting campaign has been determining whether the proposed use case can defensibly rely on one of the exemptions adopted by the Federal Communications Commission (FCC). That is because the FCC has repeatedly cautioned that any exemptions it adopts apply only to the specific set of facts considered by the agency. Sometimes the jigsaw puzzle pieces align, but other times they do not perfectly fit together, making exemptions less useful than they might otherwise be.

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