At the Federal Communications Bar Association’s TCPA symposium in D.C. last month, panelists from the Federal Communications Commission (FCC) and private practice expressed uncertainty regarding when the D.C. Circuit would issue its much-anticipated ruling in the appeal of the FCC’s July 2015 Declaratory Ruling and Order (the “2015 Order”). It turns out that that day is today. And the ruling was well worth the wait.
The D.C. Circuit’s ruling upheld the FCC’s approach to revocation of consent (permitting revocation through any reasonable means) and the scope of the healthcare exemption, but it set aside the FCC’s expansive definition of an “automatic telephone dialing system” (ATDS) and its untenable approach to liability for communications to reassigned telephone numbers.
ATDS: Petitioners prevailed in whole as to the interpretation of the ATDS definition, with the Court setting aside that portion of the 2015 Order, which had held that the word “capacity” refers not to equipment’s present capacity today but rather to its potential capacity next month or even next year. The Court agreed with Petitioners that the FCC’s approach was overbroad—so overbroad, in fact, that it would even encompass smartphones. In addition, the Court reached back to prior FCC rulings (dating back to 2003) that had “clarified” the statutory definition to include equipment that dials from a stored list of numbers, such as predictive dialers (while dispensing with the requirement of generating random or sequential numbers); and other notoriously inconsistent FCC pronouncements as to human intervention and other issues. The Court concluded that the FCC’s position was so unclear that its “treatment of those matters” should be set aside.
Reassigned Numbers: The Court also found that the FCC’s one-call safe harbor for calls to reassigned numbers was arbitrary and capricious. It upheld the FCC’s interpretation that “called party” referred to the current subscriber, but it found that the one-call safe harbor was contrary to the “reasonable reliance” standard the FCC had otherwise adopted. The Court noted that the 2015 Order had permitted the caller to rely on consent given by the number’s customary user (e.g., a close relative), whereas the one-call-only approach was inconsistent with that approach. Rather than just redline the safe harbor, the Court set aside the Commission’s treatment of reassigned numbers as a whole. The Court noted in this regard the FCC’s current rulemaking regarding the reassigned numbers database.
Revocation of Consent: While upholding the portion of the 2015 Order that allowed consumers to revoke consent through any reasonable means, the Court highlighted the FCC’s concession that the ruling did not address contractual provisions that specify the means of revoking consent. That is good news, insofar as it preserves other court rulings that have enforced the law of contract in this area.
The FCC will likely go back to the drawing board on the ATDS and the reassigned numbers issues, now under the auspices of Commissioner Pai. Today’s opinion provides some significant guideposts for the agency’s further rulemaking in this area. Given the vigorous dissents to the 2015 Order on these very issues by Chairman Pai and Commissioner O’Rielly, this is a promising development for businesses seeking to communicate with consumers.
The Ninth Circuit Court of Appeals went back to the basics in addressing whether a telemarketing vendor acted as defendant’s authorized agent for purposes of TCPA liability. In Jones v. Royal Admin. Servs., Inc., No. 15-17328, 2017 WL 3401317 (9th Cir. Aug. 9, 2017) (“Jones”), the Ninth Circuit endorsed the time-honored multi-factor test set forth in Restatement (Second) Of Agency, and on that basis affirmed the district court’s grant of summary judgment. The decision provides further reassurance that traditional agency principles apply in assessing potential TCPA exposure related to calls.
Last week, the Second Circuit, in Leyse v. Lifetime Entertainment Servs., LLC, affirmed the denial of class certification in a putative TCPA prerecorded message class action for lack of an ascertainable class. (We previously blogged about this district court decision.) Lifetime, concerned that viewership of its hit show “Project Runway” would suffer due to a channel change, hired a third-party vendor, OnCall Interactive, to contact New York City residents with a prerecorded message from the show’s host informing potential viewers of the channel change. Leyse v. Lifetime Entertainment Servs., LLC, No. 13-cv-5794, 2015 WL 5837897, at *1 (S.D.N.Y. Sept. 22, 2015). OnCall, in turn, purchased a list of phone numbers from an unknown third-party vendor; Lifetime never obtained that list. Id. at *2. Continue reading
A much-anticipated TCPA class action trial was set to begin next week in Birchmeier et al. v. Caribbean Cruise Line Inc., et al., in the United States District Court for the Northern District of Illinois. According to published reports, however, a class-wide settlement was reached yesterday in this protracted litigation with a history of controversial rulings by the District Court.
Under the terms of the agreement, defendants will pay in the range of $56-$76 million, to settle the claims of class including approximately one million people who received robocalls from defendants in 2011-2012. Class members will reportedly receive $500 for each call received, with the total amount paid to be determined based on how many claims are made.
The case has a long history, including controversial decisions by the District Court to certify the class in 2014, and a decision earlier this year to maintain certification despite the United States Supreme Court’s affirmation in Spokeo v. Robins that a mere statutory violation does not support Article III jurisdiction. The upcoming trial, which had been scheduled to begin on September 12, 2016, appeared to mark one of the few instances in which a TCPA class action would be resolved through trial and potential appeal.
While specific details are yet to arrive, this settlement illustrates the very real risks of TCPA class action litigation given the current uncertainty of the law. While the outcome at settlement is perhaps unique to this litigation, in part due to the District Court’s decisions to this point, further clarity on these key issues arising under the statute remains much needed.
In the wake of the Supreme Court’s decision in Campbell-Ewald v. Gomez, the Ninth Circuit has held that an offer tendering complete relief, conditioned on the dismissal of a putative class action, is insufficient to moot the action for purposes of Article III jurisdiction.
In Chen v. Allstate, No. 13-16816 (9th Cir. April 12, 2016), the defendant deposited in escrow an amount exceeding the value of the plaintiff’s individual TCPA claim. The escrow instructions conditioned the payment of the funds on the entry of an order from the district court dismissing the action as moot. The defendant asked the Ninth Circuit to supplement the record on its pending appeal, to hold that the tender had mooted the plaintiff’s claims under Article III, and to direct the district court to dismiss the action. Continue reading
An essential requirement for certifying a class under Rule 23 is a means for presently ascertaining who is or is not a member of the proposed class. A trio of recent district court decisions has applied this ascertainability requirement to proposed TCPA class actions. The cases reach different conclusions as to whether a list of telephone numbers is a necessary or sufficient means of ascertaining class membership.