New Year, New Rules: FCC Modifies Existing TCPA Exemptions, Adopts New “Call Blocking” Requirements, and Clarifies TCPA Application Over Soundboard Technology

Some welcome the New Year with new goals and new plans while others – the FCC, in particular, welcomes the New Year by wrapping up TCPA rulemakings and issuing other rulings. As expected, a number of TRACED Act items were included in orders issued in late December 2020. As we previewed, the FCC amended nine existing TCPA exemptions, imposing additional restrictions on pre-recorded/artificial voice calls placed to residential lines even for informational calling, and adopted new redress requirements on and safe harbor protections for carriers engaging in network-based call blocking. The FCC also denied two petitions for declaratory rulings, clarifying that “soundboard callers use a prerecorded voice to deliver a message” and that as a result, these calls made using soundboards are subject to TCPA restrictions. In light of these changes, we encourage business callers to carefully assess how they affect any existing calling protocols and compliance practices.

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Timing Is Everything in Eleventh Circuit’s Renewed Consent Case

The Eleventh Circuit recently affirmed the entry of summary judgment in favor of a student loan servicer and its affiliate, finding that their nearly 2,000 calls did not violate the TCPA because the plaintiff had renewed his consent by submitting an online demographic form. See Lucoff v. Navient Sols., LLC, No. 19-13482, 2020 WL 7090315 (11th Cir. Dec. 4, 2020).

The history of this case is somewhat winding. In 2010, the plaintiff was part of a class action against one of the defendants. Id. at *1. As part of the settlement terms, class members who did not submit revocation request forms were deemed to have provided prior express consent to receive calls regarding their student loans. Id. The plaintiff did not submit a revocation request. Id.

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District Court Decertifies TCPA Class Due to Consent Issues

The Central District of California recently decertified a class of TCPA plaintiffs because consent issues were so individualized that the plaintiffs could not satisfy the predominance requirement. Trenz v. On-Line Administrators, Inc., No. 15-8356, 2020 WL 5823565 (C.D. Cal. Aug. 10, 2020). The case highlights that a defendant can defeat certification by showing that class members provided their numbers in different “transactional contexts,” which can give rise to individualized issues regarding the existence and scope of consent.

In 2008, Volkswagen Group of America, Inc. (“Volkswagen”) launched its Target and Retain Aftersales Customers (“TRAC”) program. Id. at *1. Through this program, it paid for over 900 dealerships across the country to retain Peak Performance Marketing Solutions, Inc. (“Peak”) to place service reminder calls to their customers. Id. A class action alleging the use of autodialers and automated voices to make calls without the plaintiff’s consent eventually followed. Id.

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FCC Affirms that Health Plans and Providers Cannot Offer Post-Call Opt-Out in Lieu of “Prior Express Consent”

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.

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FCC Issues Declaratory Ruling Regarding Whether P2P Text Messaging Platforms Are Autodialers

On June 25, 2020, the FCC issued a Declaratory Ruling that granted a Petition that had been filed in 2018 by the P2P Alliance—a “coalition of providers and users of peer-to-peer (P2P) text messaging services.” The Petition had asked the FCC to clarify whether texts sent via its messaging platform were subject to the TCPA restrictions on automated dialing. The FCC did not decide if the Petitioner’s messaging platform is an autodialer, as the record was not sufficient to do so. But it did clarify in the abstract that, “if a texting platform actually requires a person to actively and affirmatively manually dial each recipient’s number and transmit each message one at a time and lacks the capacity to transmit more than one message without a human manually dialing each recipient’s number… then such platform would not be an ‘autodialer’ that is subject to the TCPA.”

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11th Circuit Holds that Consumers Cannot Unilaterally Revoke Contractual Consent to Automated Calls

The Eleventh Circuit recently affirmed the district court’s summary judgment ruling that a defendant’s calls did not violate the Telephone Consumer Protection Act (“TCPA”) because consumers cannot unilaterally revoke consent that was part of a bilateral contract.

In Medley v. Dish Network, LLC, No. 18-13841, 2020 WL 2092594 (11th Cir. May 1, 2020), Medley entered a two-year contract with DISH for satellite television services. As part of the service contract, Medley provided her cell phone number to DISH and expressly authorized DISH “‘to contact [her] regarding [her] DISH Network account or to recover any unpaid portion of [her] obligation to DISH, through an automated or predictive dialing system or prerecorded messaging system.’” Medley, 2020 WL 2092594, at *1. Approximately eleven months later, Medley temporarily suspended her service under an optional provision of the contract, which triggered a $5.00 monthly fee in lieu of service charges. Medley then underwent bankruptcy, which discharged approximately $800 that she owed to DISH. Following this discharge, DISH called Medley to recover outstanding fees accrued as a result of her temporary pause in service. In response to emails from DISH, Medley’s bankruptcy lawyer sent DISH faxes stating that the lawyer represented Medley with regard to her debts.  DISH continued to contact Medley following these faxes.

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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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Serial TCPA Plaintiff Suffers Another Defeat

The United States District Court for the District of Connecticut recently dealt another blow to serial TCPA plaintiff, Gorss Motels, Inc., granting summary judgment to the defendant in Gorss Motels, Inc. v. Lands’ End, Inc., No. 17-cv-00010, 2020 WL 264784 (D. Conn. Jan. 16, 2020). This is the latest in a series of adverse decisions—including from a Court of Appeal—suffered by Gorss Motels.

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Central District of California Grants Motion for Summary Judgment After Finding That Plaintiff Failed to Revoke Prior Express Consent To Be Called

The Central District of California recently granted summary judgment to the defendant on a TCPA claim in Mendoza v. Allied Interstate LLC, SACV 17-885 JVS (KESx), 2019 WL 5616961 (C.D. Cal. Oct. 22, 2019), finding that the plaintiff had not sufficiently proven revocation of consent to be called about two credit card accounts when he had revoked consent to be called about two other accounts serviced by the same card issuer.

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Court Denies Class Certification Due to Individualized Issues Regarding Recipients’ Consent to Receipt of Faxes

In E&G, Inc. v. Mount Vernon Mills, Inc., No. 17-0218, 2019 WL 4032951 (D.S.C. Aug. 22, 2019), the District of South Carolina denied class certification because individualized issues—specifically, whether recipients had consented to receive the fax at issue—predominated.

Plaintiff E&G, Inc. (“E&G”), a hotel franchisee of Wyndham Worldwide Corporation (“WWC”), received a fax from WWC that included advertisements from certain approved WWC vendors, including defendant Mount Vernon Mills, Inc. (“Mount Vernon”). E&G’s franchise agreement with WWC allowed WWC to offer assistance with purchasing supplies and to provide lists of preferred suppliers. E&G provided WWC with its fax number and updated its contact information over the course of several years.

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