Sixth Circuit rejects Creasy line of cases, holding TCPA claims arising between November 2015 and July 2020 are viable

The Sixth Circuit recently became the first federal court of appeals to weigh in on whether plaintiffs can bring TCPA claims for conduct occurring between November 2015 and July 2020—the respective dates on which the unconstitutional government debt exception was passed and the Supreme Court’s decision in Barr v. AAPC declared it unconstitutional and severed it from the statute. Some district courts, such as the District of Louisiana in Creasy v. Charter Communications, Inc., 2020 WL 5761117 (E.D. La. Sept. 28, 2020), have concluded plaintiffs cannot—reasoning that the TCPA was void while an unconstitutional provision was part of it. As covered in our prior posts, district courts have come down on both sides of the issue—leading to significant confusion.

Enter the Sixth Circuit’s decision in Lindenbaum v. Realgy, LLC, No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021), which considered the Chief Judge of the Northern District of Ohio’s decision that dismissed a putative class action arising from prerecorded calls.

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Ninth Circuit Vacates Certification of Nationwide Classes, Holding that Defendant Did Not Waive Personal Jurisdiction Challenge by Not Raising It Precertification

On August 10, 2021, a divided Ninth Circuit panel vacated a trial court’s certification of two nationwide classes, finding that the defendant had not waived its personal jurisdiction objection to class certification by not raising the issue at the pleading stage. See Moser v. Benefytt, Inc., No. 19-56224, 2021 WL 3504041 (9th Cir. Aug. 10, 2021).

This case arose as a putative nationwide class action filed by Kenneth Moser in federal court in California against Benefytt Technologies, Inc., formerly known as Health Insurance Innovations, Inc. (HII), alleging that HII was responsible for unwanted sales calls that violated the TCPA. Moser was a resident of California, whereas HII was incorporated in Delaware and had a principal place of business in Florida.

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Court denies class certification where question of who is a residential subscriber would predominate litigation

A court in the District of Oregon recently granted a defense motion to deny class certification, largely because the issue of whether the putative class representative’s phone number was “residential”—a prerequisite to TCPA protection—would predominate the litigation.

In Mattson v. New Penn Financial, LLC, the district court considered plaintiff’s objections to the magistrate judge’s findings and recommendation regarding defendant’s motion to deny class certification. No. 3:18-CV-00990-YY, 2021 WL 2888394, at *1 (D. Or. July 9, 2021). The magistrate judge had concluded that plaintiff was an inadequate class representative because questions remained concerning whether he alleged a sufficient injury in fact to bring a TCPA claim, and also because issues individual to the plaintiff would predominate the litigation.

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District Court Departs from Supreme Court Plurality to Find Government-Debt Collector Retroactively Liable Under TCPA — But Rejects Statutory Damages

For nearly five years, the TCPA explicitly excluded from liability calls made to collect government-backed debt. Naturally, government debt collectors relied on this exception and called debtors without fear of TCPA liability. In 2020, the Supreme Court ruled that this exception was unconstitutional and severed it from the statute. Now, a federal district court has ruled that government debt collectors may be liable for calls made prior to the Supreme Court Ruling, despite their reasonable reliance on the exception. In doing so, the court brushed aside due process concerns.

As previously reported, the government debt exception was severed from the statute by the Supreme Court’s decision in Barr v. AAPC. The AAPC decision was highly fractured—with the Court issuing four opinions but none commanding a majority.  Since, district courts have been grappling with AAPC means for the statute.

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TCPA Plaintiff Argues He Wasn’t Injured in Attempt to Dodge Federal Jurisdiction

Usually, it is the plaintiff that argues he or she was injured, not the defendant. But, in an effort to stay in state court, some TCPA plaintiffs have taken the counterintuitive position that they did not suffer an injury in fact under Article III of the U.S. Constitution and, therefore, their claims cannot be heard in federal court.

“[T]o satisfy Article III’s standing requirements, a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of Earth, Inc. v. Laidlaw Environmental Servs. (TOC), Inc., 528 U.S. 167, 180–181 (2000).

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California District Court Criticizes Creasy, Concluding Barr Decision does not Deprive it of Jurisdiction

A district court from the Central District of California cast its lot against the growing argument that federal courts lack jurisdiction over TCPA claims based on conduct that occurred when the government debt exception was part of the statute. See Shen v. Tricolor California Auto Group, LLC, No. 20-7419, 2020 WL 7705888, at *1 (C.D. Cal. Dec. 17, 2020).

As our regular readers know, the government debt exception—a relatively new addition to the TCPA—was recently severed from the statute by the Supreme Court’s decision in Barr v. AAPC. Since, several federal district courts have questioned whether they may enforce the statute as to claims based on conduct that allegedly occurred while the exception was part of the statute, i.e. from November 2, 2015 through July 6, 2020. Most notably, the Eastern District of Louisiana concluded in Creasy v. Charter Communications that the Barr decision held that the TCPA was unconstitutional in its entirety during the pendency of the exception, that courts lack authority to enforce a constitutional statute, and that courts therefore cannot hear claims based on conduct during that period.

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Professional Plaintiff Who Manufactured Claims Can Sue But Can’t Represent Class

A recent denial of a professional plaintiff’s motion for class certification shows that, irrespective of whether such plaintiffs have standing to sue on their own behalf, courts are increasingly skeptical that contrived claims are amenable to class treatment. See Hirsch v. USHealth Advisors, LLC, No. 4:18-CV-00245-P, 2020 WL 7186380, at *1 (N.D. Tex. Dec. 7, 2020).

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A Divided Eleventh Circuit Holds that Incentive Awards are Prohibited

In a decision that may have far-reaching consequences, a divided panel of the Eleventh Circuit ruled that incentive awards to named plaintiffs—which are routine in TCPA and other class action settlements—are improper. See Johnson v. NPAS Solutions, LLC, No. 18-12344, 2020 WL 5553312, at *1 (11th Cir. Sept. 17, 2020). Despite acknowledging that incentive payments are commonplace in modern class action litigation, the majority held that such awards are prohibited under “on-point Supreme Court precedent” from the late 1800s and required reversal of the district court’s approval of a $1.4 million class settlement.

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The FCC Clarifies that Certain Communications to COVID-19 Patients Fall with TCPA’s “Emergency Purposes” Safe Harbor

In a Public Notice issued July 28, 2020, the FCC confirmed that the TCPA’s safe harbor for calls or text messages made for “emergency purposes” applies to calls and text messages made by or on behalf of health care entities to communicate with individuals who have tested positive for COVID-19 to provide them with information regarding donating their plasma after recovery. As a result, in the FCC’s view, such calls or text messages during the ongoing pandemic do not require prior express consent to be lawful. Continue reading   »

Supreme Court Strikes Government-Debt Exception But Saves Other Restrictions on Automated Telephone Equipment

On July 6, 2020, the Supreme Court issued a highly anticipated—and highly fractured—ruling in Barr v. American Association of Political Consultants. The nine Justices produced four opinions, none of which commanded a majority. But six of the Justices agreed that the TCPA’s government-debt exception violated the First Amendment, and seven agreed that it could be severed from the rest of the TCPA. The result, then, is that the exception was stricken but the restrictions on automated telephone equipment were saved.

Writing for the plurality, Justice Kavanaugh made quick work of the government’s argument that the exception was content-neutral: “A robocall that says, ‘Please pay your government debt’ is legal. A robocall that says, ‘Please donate to our political campaign’ is illegal. That is about as content-based as it gets.” Because the exception was content-based, the plurality applied strict scrutiny—a standard that the government had conceded it could not satisfy.

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