On Friday, January 15, 2016, the Federal Communications Commission filed its response to the arguments of the joint Petitioners in the consolidated appeal from its July 10, 2015 Omnibus Ruling. The Commission’s brief addresses the scope of its statutory authority, the definition of an “automatic telephone dialing system” (“ATDS”), the meaning of “called party” and the potential liability for calls to recycled numbers, the ability to revoke consent, healthcare-related calls and the emergency purpose exception, and First Amendment challenges to the Commission’s interpretations of the statute. Its main arguments are summarized below.
In the wake of its Open Meeting earlier today, the FCC issued a press release that promises “a package of declaratory rulings” that will bring “much needed clarity for consumers and businesses” on a variety of topics. Whether the rulings provide more answers than questions remains to be seen, as the Commission has yet to issue its order. What was on full display during the meeting and the subsequent press conferences, however, was how disenchanted Commissioners Pai and O’Rielly were with how the order had been negotiated. Neither they nor Chairman Wheeler were willing to elaborate in response to questions from reporters.
Judge Baylson of the Eastern District of Pennsylvania recently granted Yahoo! summary judgment in a case challenging Yahoo’s automatic email to text alert system because it did not use an automatic telephone dialing system (“ATDS”) when it forwarded emails as text messages. In doing so, he applied the plain meaning of the statutory definition of ATDS, rejected an FCC opinion that had purported to broaden it, and disagreed with Judge Curiel in the Southern District of California, who denied a similar motion by Yahoo! just weeks ago. See Dominguez v. Yahoo!, Inc., No. 13-1887, slip op. (E.D. Pa. Mar. 20, 2014); Sherman v, Yahoo!, Inc., No. 13-0041, slip op. (S.D. Cal. Feb. 3, 2014). The decision is important because it limits the definition of ATDS to those systems that can generate (as opposed to merely dial) a list of numbers on a “random or sequential” basis.
Once again, a defendant has defeated a TCPA class certification motion on the ground that the liability inquiry would require individualized inquiries into class members’ consent to receive calls, precluding a finding of predominance.
In Connelly v. Hilton Grand Vacations Co., LLC, — F.R.D. —-, Case No. 12CV599 JLS (MDD), 2013 WL 5835414 (S.D. Cal. Oct. 29, 2013), plaintiffs sued a resort properties operator alleging that its third party marketer violated the TCPA by using an ATDS to make telemarketing calls to cell phones without obtaining prior express consent. Id. at *1. Plaintiffs sought to certify a sprawling class of all recipients of any of 37 million calls to 6 million different numbers over a four-year period, and sought statutory damages for this would-be class “that could total between $18 and $54 billion.” Id. at *1.
A federal district court judge in Maryland gave a clear endorsement of the FCC’s regulation limiting fax broadcasters’ liability under the TCPA. Asher & Simons, P.A. v. J2 Global Canada, Inc., No. JKB-13-0981, 2013 U.S. DIST. LEXIS 148972 (D. Md. Oct. 16, 2013). FCC regulations limit the liability of so-called fax broadcasters (those who transmit faxes for a fee on behalf of others) to those circumstances in which a broadcaster “demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such facsimile transmissions.” 47 C.F.R. § 64.1200 (a)(4)(vii). The Canadian affiliate of j2 Global asserted the FCC regulation as an affirmative defense, and the plaintiffs challenged this particular defense by a motion for partial summary judgment. The plaintiffs argued that FCC regulatory authority under the TCPA is limited, and could not be read to include the power to limit liability for any transmission of an unsolicited fax.
The Telephone Consumer Protection Act of 1991 (“TCPA”) places certain restrictions on telemarketing calls, text messages, and faxes. It has long been a favorite of the plaintiffs’ bar because it provides for statutory damages of $500 to $1500 per violation, which in the aggregate can lead to substantial windfalls for plaintiffs. TCPA violations (even innocent ones) can place companies at significant risk and TCPA litigation has skyrocketed as a result.
Last year, the Federal Communications Commission (“FCC”) added fuel to the fire by amending its TCPA rules and further restricting telemarketing calls. The most significant of those amendments – which narrow and eliminate key statutory exemptions – will take effect tomorrow, on October 16, 2013.
If you are reading this post, chances are you already know a lot about the TCPA. You don’t need to be told that it stands for “Telephone Consumer Protection Act.” Or that it restricts certain telemarketing calls, texts and faxes by a labyrinthine mosaic of statutory provisions and FCC regulations. Or that its ambiguities and statutory damages have made it a hotbed of litigation, particularly class action litigation. Or that the courts are struggling to bring some sense and clarity to the entire regime, while defendants experience an almost hydraulic pressure to settle cases involving even the most innocent, hyper-technical violations. You already know all of that. And, you probably also know that there will be a major development in the law tomorrow, when the FCC’s new telemarketing rules requiring written consent finally take effect. For a summary of the new rules, see our post here.