Three months after the Supreme Court’s landmark Facebook ruling, a growing number of trial courts have grappled with interpreting and applying the High Court’s directive. One of the more interesting decisions came out of the Eastern District of Michigan recently. In Barry v. Ally Fin., Inc., No. 20-cv-12378, 2021 WL 2936636, at *1-7 (E.D. Mich. July 13, 2021), the district court dismissed a putative TCPA class action on the grounds that the plaintiff failed to allege use of an ATDS. More significantly, the district court interpreted Facebook to hold that to be an ATDS, the dialing system must actually use a random or sequential number generator to call the plaintiff, and not merely have the capacity to do so.
Recently, the Eastern District of Missouri added to the split among courts deciding whether they can hear TCPA claims alleging robocall violations that occurred when the now-invalidated government debt exception was part of the statute. As we have previously reported on here, some district courts have joined Creasy v. Charter Communications, Inc., 2020 WL 5761117 (E.D. La. Sept. 28, 2020), in holding that subject matter jurisdiction is lacking in such cases, but a growing number—now including the Eastern District of Missouri—have disagreed. Miles v. Medicredit, Inc., No. 4:20-cv-001186, 2021 WL 872678 (E.D. Mo. Mar. 9, 2021).
The scenario at issue in this case is a familiar one. Defendant Medicredit is a medical debt collector. Plaintiff Miles contended that Medicredit violated the TCPA’s prohibition on making calls using an ATDS or an artificial or prerecorded voice by placing six such calls to his cell phone, without his consent, in January and February 2018. Not so, Medicredit responded, for the prohibition at issue, 47 U.S.C. § 227(b)(1)(A)(iii), was unconstitutional at the time Medicredit allegedly made the calls to Miles because the provision contained an exception, for calls to collect government debts, that the Supreme Court later invalidated as a content-based restriction on speech that violated the First Amendment. Thus, Medicredit argued in its motion to dismiss that the court, having no statutory basis to enforce the alleged violations, lacked subject matter jurisdiction to hear the suit.
In the aftermath of Barr v. American Association of Political Consultants, Inc.—the Supreme Court decision from July that held the TCPA’s government-debt exception to be an unconstitutional content-based restriction on speech—the country’s district courts cannot agree on whether they may adjudicate TCPA claims alleging conduct that transpired during the life of the exception (i.e., during the period from November 2, 2015 to July 6, 2020). Click here to see our collection of posts on this issue, which we have been following closely. Continue reading
As readers of this blog may recall, the Middle District of North Carolina recently denied Dish Network’s request for reversion of $11 million in unclaimed funds from the jury-awarded damages in a TCPA class action trial. See Krakauer v. Dish Network, LLC, No. 14-0333 (M.D.N.C. Oct. 27, 2020). Noting that the TCPA is a deterrence statute, the District Court held that allowing unclaimed funds to revert to the defendant would undermine the function of the damage award, and it determined that such funds should either escheat to the government or be donated to an appropriate charity whose work is related to the objectives of the TCPA. But the District Court did not decide the ultimate recipient of the unclaimed funds, appointing a special master to identify and evaluate potential cy pres recipients and make recommendations to the court.
The Eastern District of Pennsylvania recently dismissed a serial TCPA plaintiff’s complaint sua sponte because the court concluded that it did not have personal jurisdiction over the defendant. Perrong v. REWeb Real Estate, LLC, No. CV 19-4228, 2020 WL 4924533 (E.D. Pa. Aug. 21, 2020). The case demonstrates that courts are becoming increasingly frustrated with “professional plaintiffs” who repeatedly file TCPA claims against businesses and pressure them “to settle independent of the merits of the case.” Id. at *3.
Another court decision reminds us that conclusory allegations that an agency relationship exists should not be sufficient to impute TCPA liability on the alleged beneficiary of a messaging campaign. Pleadings that lack plausible allegations showing “some degree of control over who sent the text and the manner and means by which it was sent” can lead to dismissal – with prejudice, if the plaintiff has run out of a reasonable number of opportunities to amend.
The FCC’s Consumer and Governmental Affairs Bureau last week issued a declaratory ruling resolving a long-pending Petition on the question of whether certain healthcare-related calls, given their significance and value for consumers, should be entirely exempted from the TCPA’s prior express consent requirement, or at least exempted as long as consumers are allowed to opt out of the calls. The Bureau declined the petitioner’s invitation to create new healthcare exemptions or expand the scope of exemptions already in place for certain types of health-care-related calls.
As readers of this blog know, a robust Circuit split has developed regarding the meaning of an ATDS. The Second and Ninth Circuits have taken one approach, while the Third, Seventh, and Eleventh Circuits have taken another. While we await Supreme Court guidance, lower courts continue to grapple with the ATDS issue. In Eisenband v. Pine Belt Automotive, Inc., No. 17-8549 (FLW) (LHG), 2020 WL 1486045 (D.N.J. Mar. 27, 2020), the District of New Jersey analyzed the definition of an ATDS and concluded that equipment that dials numbers from a manually prepared list does not constitute an ATDS.
The Seventh Circuit recently issued an opinion with significant implications for defendants evaluating the prospects for due process challenges to awards of statutory damages under the TCPA, as well as defendants facing claims of agency liability for the acts of their vendors or contractors. In an opinion by Judge Easterbrook, the Seventh Circuit ordered the District Court to reexamine a “whopping” $280 million penalty against DISH Network, LLC (“DISH”) for violations of the TCPA, the Telemarketing Sales Rule, 16 C.F.R. § 310 (the “Rule”), and related state laws. U.S. v. DISH Network, LLC, 2020 WL 141844, at *8 (7th Cir. Mar. 26, 2020). Although the Seventh Circuit suggested in dicta that the damages award was constitutionally acceptable, it held that the District Court erred because it only considered DISH’s “ability to pay” when calculating the award. Id. The court stated that the analysis should “start from harm rather than wealth, then add an appropriate multiplier.” Id.