The Federal Communications Commission has proposed to slap a Virginia political firm and two of its principals with a $5,134,500 fine for placing over one thousand prerecorded phone calls to cell phones across the country without prior consent from recipients, in violation of the TCPA and Commission rules. The action is the FCC’s first big enforcement matter under the recently enacted Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act and demonstrates the Commission’s willingness to use that statute to assess hefty penalties against noncompliant entities.
Under the 2019 TRACED Act, the Commission may issue a “Notice of Apparent Liability for Forfeiture” to an entity that violates the TCPA’s prohibitions on prerecorded voice messages and autodialing systems, without first having to issue a warning to the entity. See Pub. L. No. 116-105, 133 Stat. 3274, Sec. 3(a). The defendant then has an opportunity to challenge the allegations before the Commission issues a final decision on liability and fines. See FCC, Enforcement Primer (“FCC-Initiated Investigations”). Prior to the TRACED Act, FCC rules required the Commission to issue a citation to an alleged violator of § 227(b) before it could seek to impose a forfeiture penalty upon them.
According to the Commission after an investigation, John Burkman and Jacob Wohl of J.M. Burkman & Associates LLC (together, the “Defendants”) directed dialing-service providers to place calls to individuals living in certain targeted U.S. zip codes. See Notice of Apparent Liability for Forfeiture at ¶ 4, Burkman et al., FCC 21-97 (Aug. 24, 2021). These alleged calls contained a prerecorded message stating that individuals who voted by mail relinquished certain personal information that could be used by credit card companies and police departments to follow up on old arrest warrants and debts. Id. The Commission’s investigation determined that 1,141 calls were made to mobile phones pursuant to this scheme and that all of the calls were made without prior express consent from the recipients. Id. at ¶ 5.
Based on these facts, the Commission concluded that the Defendants’ scheme violated the TCPA’s ban on artificial and prerecorded voice messages (47 U.S.C. § 227(b)(1)(A)) as well as the FCC’s implementing rule (47 C.F.R. § 64.1200(a)(1)(iii)). Although none of the Defendants placed the calls themselves, the Commission found that they were “so involved in placing the calls as to be deemed to have initiated them” because Defendants organized the scheme, composed the prerecorded messages, and paid dialing platforms to place the calls. See id. at ¶¶ 8-9. Additionally, the prerecorded messages identified Defendants by name, and one of the Defendants’ personal phone numbers appeared as the calling party on recipients’ caller ID. Id. at ¶ 8.
Having found Defendants liable for making the calls, the Commission proceeded to assess the amount of a proposed civil fine. The TCPA currently allows the Commission to assess a forfeiture of up to $20,731 for each violation (47 U.S.C. § 503(b)(2)(D)). However, the Commission decided to apply a “base forfeiture” of $4,500 per call for Defendants’ alleged violations of § 227(b), in line with prior enforcement actions under that subsection. Id. at ¶¶ 13-14. The Commission multiplied this figure by the number of calls made to cell phones (1,141) to determine the total proposed forfeiture of $5,134,500. Id. at ¶ 15. The Commission also proposed to hold the Defendants individually and collectively liable for the entire forfeiture due to their “joint and several” involvement in the scheme. Id. at ¶ 16.
The Commission emphasized that the content of the calls played no part in its finding of liability. See id. at ¶ 4 n.10. Defendants now have the opportunity to challenge the Commission’s allegations against them. The Commission will rule on liability and either affirm or modify the amount of a forfeiture once it has heard from the Defendants.
This enforcement action comes amid a pending suit against Defendants in New York federal court over the same call scheme. Last year, a non-profit launched a suit alleging that Defendants’ call campaign was designed to mislead Black voters about mail-in voting in order to discourage them from casting ballots. See Nat’l Coal. on Black Civic Participation v. Wohl, 20-cv-8668 (S.D.N.Y. 2020). The district court ordered the calls to stop pending a hearing on plaintiffs’ request for a preliminary injunction. Id.
The FCC action constitutes its first large enforcement matter under the TRACED Act and demonstrates the Commission’s willingness to use that law to impose stiff fines upon entities that violate the TCPA’s ban on prerecorded voice messages and autodialing systems used to place calls without prior consent. Enforcement actions brought under the TRACED Act now represent yet another TCPA enforcement and litigation threat, in addition to private civil suits, that entities must seek to avoid with strong compliance programming.