FCC Seeks Comment on HHS/CMS Request for Certainty About Communications Critical to Federal and State Health Insurance Programs Post-Pandemic

Reacting quickly to a joint request by the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) (collectively, the Health Agencies) last Thursday, the FCC released a Public Notice on May 3, 2022, inviting comments about how it should clarify “that certain automated calls and text messages or prerecorded voice calls relating to enrollment in state Medicaid and other governmental health coverage programs are permissible under the Telephone Consumer Protection Act (TCPA).” Recognizing the time-sensitive nature of the Health Agencies’ request, the FCC established a short cycle for public comment – comments are due in 14 days on May 17, 2022, and any reply comments are due on May 24, 2022.

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Southern District of New York Denies Motion to Dismiss Because Plaintiff Sufficiently Alleged That He Was a “Residential Subscriber”

The TCPA’s Do Not Call (DNC) regulations prohibit telephone solicitations to “residential telephone subscriber[s]” who have “registered [their] telephone number on the national do-not-call registry.” See 47 C.F.R. § 64.1200(c)(2). However, as we noted in a recent post, several district courts have found that the term “residential telephones,” as used in the DNC regulations, may include cell phones under certain circumstances, such as when cell phones are used primarily for “personal, family, and household” matters. See Hunsinger v. Alpha Cash Buyers, LLC, 3:21-cv-1598-D, 2022 WL 562761, at *2 (N.D. Tex. Feb. 24, 2022) (collecting cases). Nonetheless, other courts have rejected this proposition. See id. at *2 (citing Callier v. GreenSky, Inc., EP-20-CV-00304, 2021 WL 2688622, at *6 (W.D. Tex. May 10, 2021)).

In Rose v. New TSI Holdings, Inc., the Southern District of New York recently held that a plaintiff alleged sufficient facts to survive a motion to dismiss arguing that plaintiff’s cell phone could not qualify as a “residential telephone.” No. 21-CV-5519, 2022 WL 912967 (S.D.N.Y. Mar. 28, 2022).  Specifically, plaintiff alleged that he received twelve unsolicited calls from 2018 through 2021 after he visited Boston Sports Club even though his number had been listed on the DNC Registry since 2004. He alleged that he received the messages even after he told defendant to stop calling/texting him at least five times, and that some of the calls included identical prerecorded promotional messages.

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Internal DNC Policies Not Prerequisite to Using EBR Defense, Ohio Southern District Holds

Earlier this month, the U.S. District Court for the Southern District of Ohio clarified that a TCPA defendant need not maintain an internal do-not-call list and policies in order to invoke the “established business relationship” defense for telemarketing calls to numbers on the national DNC registry.

By way of background, the TCPA prohibits businesses from making “telephone solicitations” to phone numbers on the national DNC registry.  47 U.S.C. § 227(c); 47 C.F.R. § 64.1200(c).  However, telemarketing calls and messages can be sent to such numbers where the caller has an “established business relationship” with the recipient.  47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(15)(ii).  The FCC has defined an “established business relationship” (“EBR”) as a “relationship formed by a voluntary two-way communication” regarding a telephone subscriber’s recent purchase of or inquiry about a product sold by the caller.  47 C.F.R. § 64.1200(f)(5).  A subscriber can terminate the EBR at any moment by making a clear and specific request for the calls and/or messages to stop.  Id. § 64.1200(f)(5)(i).  Separately, 47 C.F.R. § 64.1200(d) requires entities who place telemarketing calls to keep an internal list of individuals who have requested not to receive calls and to maintain policies to ensure that the list is honored.

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Spring Roster of FCC Actions: State-Federal Partnerships, Enforcement Actions, and Reassigned Numbers Database Clarifications and Changes

The FCC’s TCPA dockets did not witness many developments from the beginning of 2022 until February. However, beginning in February and into March, Chairwoman Rosenworcel’s office and the Enforcement Bureau were busy negotiating new robocalling partnerships with state regulators and issuing enforcement orders against suspected or apparent violations. Those activities expanded in April by the issuance of new guidance and a new pricing structure for the Reassigned Numbers Database. We cover each of these topics below.

State-Federal Partnership on Investigations

Since Chairwoman Rosenworcel’s confirmation as the FCC Chair in December 2021, she has put on the top of her agenda building a partnership with state regulators – attorneys general and enforcement agencies. During February, March, and April 2022, Chairwoman Rosenworcel signed memoranda of understanding (MOUs) designed to allow greater cooperation and sharing of information and other investigation intelligence with regard to illegal robocalls and telephone scams. These MOUs also reflect the intention of close collaboration to enforce consumer protection laws concerning robocalls. The FCC currently has MOUs in place with twenty-eight (28) states and more could be in the offing.

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The Losses Mount for a Serial TCPA Plaintiff

In an ever-growing string of losses, the Seventh Circuit affirmed the Northern District of Indiana in denying class certification to serial TCPA plaintiff Gorss Motels, Inc. in Gorss Motels, Inc. v. Brigadoon Fitness, Inc., — F.4th —, 2022 WL 872639 (7th Cir. 2022).

The fact pattern in the present matter is consistent with the other cases Gorss Motels has filed, and the basic fact pattern can be found here. In the present case, Gorss Motels sued a franchisor-approved vendor, Brigadoon Fitness, Inc., for sending a fax advertisement for deals on fitness equipment. Gorss Motels was denied certification for a class of all recipients of this fax, Gorss Motels, Inc. v. Brigadoon Fitness, Inc., 331 F.R.D. 335 (N.D. Ind. 2019), which was denied again on reconsideration, Gorss Motels, Inc. v. Brigadoon Fitness, Inc., No. 1:16-CV-330-HAB, 2019 WL 5692168 (N.D. Ind. Nov. 4, 2019).

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Court Rejects Healthcare Facility’s Use of Emergency Purpose Exception

The Middle District of Florida recently held that a defendant cannot invoke the “emergency purposes” exception to the TCPA if the defendant continues to send messages after the plaintiff has instructed the defendant to stop.  In Farhat v. Unique Healthcare Systems, Inc., the Plaintiff claimed that her healthcare provider had sent her four messages within a four-week period with regard to free COVID-19 testing at the Defendant’s locations.

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Eighth Circuit Finds That System That Sends Texts to Stored Numbers is Not an ATDS, Rejects Plaintiffs’ Interpretation of Footnote 7 in Facebook v. Duguid

Last week, the Eighth Circuit affirmed a finding that a dialing system does not qualify as an ATDS if it randomly selects numbers from a stored list. See Beal v. Truman Road Dev. (8th Cir. Mar. 24, 2022). The decision explains that dialing equipment is not an ATDS if it does not produce those numbers (either randomly or sequentially) in the first place, and is notable for flatly rejecting a misreading of Facebook v. Duguid that plaintiffs have been peddling for nearly a year now.

The court’s analysis turns on the mechanics of the dialing system and plain language of the statute. The defendants were drinking establishments that use the “Txt Live” platform to send promotional text messages to numbers that were manually entered by the defendant’s employees. Specifically, the platform allowed employees to filter down to a target list of recipients based on demographic factors, select the number of potential customers to receive the message, draft or select the content of the message, and then send messages to designated recipients. To do so, it “shuffles the target contacts using a numerically based randomizer. If the number of people who meet the filtered criteria exceed the number of people to whom the message will be sent, Txt Live selects the recipients at the top of the randomized list first.” Id. at 3.

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Texts Regarding COVID Vaccine Eligibility Are Not Actionable Under TCPA, Texas Northern District Holds

The U.S. District Court for the Northern District of Texas recently held that unsolicited text messages that simply inform recipients of the availability of a free COVID-19 vaccine are protected by the “emergency purposes” exception to the TCPA’s prior express consent requirement and also do not qualify as telephone “solicitations” prohibited by the FCC’s do-not-call (DNC) rules.

In Horton v. Tarrant County Hospital District, No. 4:22-CV-9-P, 2022 WL 702536 (N.D. Tex. Feb. 4, 2022), the plaintiff alleged that he received a single unsolicited text message from the defendant, a public hospital district, announcing that “everyone ages 12 and up is eligible for the COVID vaccine.” Mr. Horton alleged that the text was sent without his consent in violation of the TCPA’s prohibition on autodialed calls as well as the rule against solicitations to telephone numbers on the national DNC list.

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Personal Cell Phones May Qualify as “Residential Telephones” Subject to DNC Rules, but Calls Made to a Pre-produced List Are Not ATDS Calls, Texas Northern District Holds

Last week, the U.S. District Court for the Northern District of Texas held that mobile phones may qualify as “residential telephones” when used (as the Complaint alleged) primarily for “personal, family, and household use,” and thus be subject to the TCPA’s do-not-call rules (47 C.F.R. §§ 64.1200(c) & (d)).  This issue has sewn disharmony among federal district courts and may draw attention from higher courts.  But the court also joined the growing number of courts following Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), that have agreed that calls specifically directed to persons on a pre-produced list (like plaintiff) are not calls made using a “random or sequential number generator” and thus are not subject to the TCPA’s prior express consent requirement for calls made using an ATDS.

In Hunsinger v. Alpha Cash Buyers, LLC, 3:21-cv-1598-D, 2022 WL 562761 (N.D. Tex. Feb. 24, 2022), the plaintiff alleged that, over the course of last year, he received eight unsolicited phone calls and six SMS text messages on his cell phone from a number he didn’t recognize.  Hunsinger picked up one of the calls and spoke with a representative for the defendant, to whom Hunsinger gave his email address.  Hunsinger subsequently received several calls and texts from the defendant referring to Hunsinger’s conversation with the representative and asking if he was still interested in a transaction.  These calls and texts were sent using an ATDS, Hunsinger alleged.  At all relevant times, Hunsinger’s number was on the national DNC list.  Id. at *1.

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Second Circuit Diverges from Third, Holds that an Unsolicited Invitation to Participate in a Survey is Not Actionable Under the TCPA

The Second Circuit recently addressed whether a faxed invitation to participate in a market research survey is an “unsolicited advertisement” actionable under the TCPA.  In Bruce Katz, M.D., P.C. v. Focus Forward LLC, 22 F.4th 368, 374 (2d Cir. 2022), the Court of Appeals held that under the plain text of the TCPA, an offer to participate in a survey, without more, is not an advertisement because it does not communicate the “availability or quality of any property, goods, or services.”  Id. at 372.

The dispute arose from defendant Focus Forward LLC’s two faxes to plaintiff Bruce Katz, M.D., P.C., a medical services company.  Id. at 370.  The faxes offered $150 in exchange for participation in a market research study.  Id.  Plaintiff initiated a putative class action lawsuit in the Southern District of New York alleging violations of the TCPA, but the federal district court dismissed the complaint, agreeing with Defendant that an invitation to participate in a market research survey was not an unsolicited advertisement within the bounds of 47 U.S.C. § 227.  Id.

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