Robocalls a Weapon for Good and Evil in Coronavirus Fight

Chicago partner Brad Andreozzi was quoted in a Law360 article discussing both the need for automated calls and texts to disseminate timely health and safety information about the COVID-19 pandemic and the uptick in robocalls seeking to profit from fears in the face of the pandemic. According to Brad, “There are two strands running through the FCC’s regulatory strategy right now. One is to promote genuine emergency-purposes communications … and the other is to issue a warning shot across the bow to would-be scammers who are looking to exploit the pandemic.”

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FCC Issues Ruling Applying TCPA’s “Emergency Purposes Exception” To Calls Addressing Health and Safety Risks Arising Out Of COVID-19 Pandemic

Acknowledging that “effective communications with the American public” is “a critical component” to efforts to slow the spread of the coronavirus, the Federal Communications Commission (FCC) released on its own motion, a declaratory ruling on March 20, 2020, addressing the applicability of the “emergency purposes” exception to the TCPA’s prohibition against making automated and prerecorded calls without prior express consent. This declaratory ruling is meant to provide “hospitals, health care providers, state and local health officials, and other government officials” peace of mind when sending important COVID-19 information through automated calls or texts.

As readers of the blog are well aware, the TCPA contains an exception to its consent requirements for calls made for “emergency purposes.” 47 U.S.C. §§ 227(b)(1)(A)-(B). The FCC’s rules define “emergency purposes” to mean “calls made necessary in any situation affecting the health and safety of consumers.” 47 C.F.R. § 64.1200(f)(4). The FCC’s declaratory ruling officially acknowledges the undeniable point that the COVID-19 pandemic constitutes an “emergency” under the TCPA. Earlier this month, on March 13, 2020, the White House declared a national emergency in light of the COVID-19 outbreak in the United States. As of March 20, 2020, all fifty states and the District of Columbia had declared states of emergency, which have led to many cities closing schools, workplaces, parks, restaurants, and houses of worship. Public safety organizations and institutions providing healthcare services, in particular, are changing modes of operation and means of handling some public-facing tasks. For example, many health care clinics have broadened their telemedicine programs or have begun conducting new patient intake “virtually” to triage patients with flu-like symptoms. These changes need to be communicated to existing and prospective patients in a timely manner on a large scale.

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Court Denies Class Certification in a TCPA Case for Lack of Numerosity and Predominance Despite Millions of Automated Calls

Recently, the Northern District of California joined other courts in more closely scrutinizing class certification motions in TCPA cases. In a case involving an automated phone call by a loan servicer regarding Plaintiff’s student loans, the district court held that the Plaintiff had failed to present evidence to satisfy Rule 23(a)’s numerosity requirement, even though the defendant had made millions of automated calls to millions of customers. Plaintiff also failed to satisfy Rules 23(b)(3) and (b)(2). The class failed under Rule 23(b)(3) because Plaintiff did not show that common questions predominated as to the consent defense and failed under Rule 23(b)(2) because Plaintiff primarily sought statutory damages rather than an injunction. Silver v. Pennsylvania Higher Education Assistance Agency, No. 14-cv-00652, 2020 WL 607054 (N.D. Cal. Feb. 7, 2020).

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Million-Dollar Settlement of Billion-Dollar Claim Found Reasonable in Light of Due Process Problems Posed By Disproportionate Damages

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.”

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Lack of Widespread Harm Traceable to TCPA Violation Requires Decertification of Class Action, Eleventh Circuit Rules

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.
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Court Finds That Some Soundboard Calls Can Qualify As “Prerecorded Voice” Calls, At Least When They Do Not “Interact With the Customer Except In Preprogrammed And Meaningless Ways”

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.

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The First Amendment Battleground: SCOTUS Asked to Review Two Ninth Circuit Decisions on the Constitutionality of the TCPA

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.

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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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N.D. Ohio Court Dismisses TCPA Claim, Finding Insufficient Allegations Regarding Consent

The Northern District of Ohio recently granted a motion to dismiss a TCPA claim because the plaintiff failed to allege plausibly that he had not consented to receive the calls.  Whiteacre v. Nations Lending Corp., et al., No. 19-CV-809, 2019 WL 3477262 (N.D. Ohio Jul. 31, 2019).  The decision reinforces the requirement that to plead a TCPA claim, the plaintiff cannot rely on conclusory allegations that he never consented (or revoked any consent that was previously provided).  To state a plausible claim, the complaint must provide factual allegations, not mere labels or legal conclusions.

Plaintiff alleged that defendants Nations Lending Corporation and its alleged loan servicer, LoanCare, violated the TCPA when LoanCare called him through an automated voice messaging system.  Id. at *2.  The Plaintiff alleged that he “expressed his lack of consent to automated calls,” but the court noted that “Plaintiff does not describe how he ‘expressed his lack of consent,’ nor does he give any other details about the prerecorded calls.”  Id. at *3 (emphasis added).  Defendants moved to dismiss the TCPA claim, arguing that Plaintiff’s conclusory allegations failed as a matter of law.

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Court Grants Plaintiff’s Motion for Summary Judgment on Vicarious Liability Issues

The Western District of Oklahoma recently granted a plaintiff’s motion for summary judgment against NorthStar Alarm Services, LLC (“NorthStar”) in a certified class action.  The court held, in part, that NorthStar was vicariously liable for telemarketing calls that sales lead generator Yodel Technologies, LLC (“Yodel”) placed on its behalf.  Braver v. NorthStar Alarm Services, LLC, No. 17-cv-0383, 2019 WL 3208651, at *1 (W.D. Okla. July 16, 2019).  The case illustrates the factors that one court found relevant in a particular factual context when assessing vicarious liability issues related to a lead generator’s telemarketing calls. Continue reading   »