Michael P. Daly, Marsha J. Indych, Author at TCPA Blog

Michael Daly

Mike Daly has spent two decades defending, counseling and championing clients that interact with consumers. His practice focuses on defending class actions, handling critical motions and appeals, and maximizing the defensibility of marketing and enforceability of contracts. Clients large and small have trusted him to protect their businesses, budgets and brands in complex cases across the country.

View the full bio for Michael Daly at the Faegre Drinker website.

Articles by Michael Daly:

Supreme Court Agrees To Review ATDS Definition

Earlier today, the United States Supreme Court granted the petition for certiorari in which Facebook had asked the Court to resolve the growing circuit split regarding the definition of an ATDS. The Court limited its review to the second question presented, namely “whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’” This comes hot on the heels of the Court’s ruling earlier this week on the constitutionality and severability of the government-debt exception to the statute’s restrictions on automated telephone equipment.

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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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Supreme Court Issues Highly Anticipated First Amendment Ruling in Barr v. AAPC

This morning, the United States Supreme Court issued its highly anticipated ruling in Barr v. American Association of Political Consultants. The decisions are fractured, but a majority of the Justices coalesced around finding that the federal debt-collection exception (1) violated the First Amendment but (2) could be severed from the statute such that the restrictions on automated telephone equipment remain in place. Notably, however, Justice Gorsuch filed and Justice Thomas joined a separate opinion that poked holes in the remedy—which is to say, the absence of a remedy—and urged the Court to revisit its approach to severability in general. We are reviewing the various opinions and will report back with a more thorough analysis shortly.

Divided Third Circuit Panel Holds that Offers to Buy Can Qualify as “Advertisements” Under the TCPA

A divided panel of the Third Circuit Court of Appeals recently reversed the dismissal of TCPA claims, finding that the faxes at issue were advertisements within the meaning of the TCPA. Fischbein v. Olson Research Group, Inc., 959 F.3d 559 (3d Cir. 2020). The Court made this finding even though the faxes at issue did not attempt to sell anything, but rather contained offers to buy the recipients’ services.

In Fischbein, the Third Circuit heard two consolidated appeals in which plaintiffs alleged that the defendants had violated the TCPA by sending them faxes that offered money in exchange for responses to market research surveys. Id. at 561. In both cases, the trial court dismissed the claims because the faxes were not an attempt to sell anything, and thus were not “advertisements” such that the sender needed a recipient’s prior express consent. A divided panel of the Third Circuit disagreed because, in its view, an offer to buy products, goods, or services can also qualify as an advertisement under the TCPA. Id. at 561.

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Court Enters Summary Judgment Against Plaintiff, Finds No Triable Issues Regarding Revocation of Consent

The Eastern District of California recently entered summary judgment against a plaintiff because it found that the plaintiff failed to revoke his consent to receive auto-dialed calls on his cell phone. Wright v. USAA Savings Bank, No. 19-0591, 2020 WL 2615441, at *1-5 (E.D. Cal. May 22, 2020). The case illustrates that defendants in the Ninth Circuit can still prevail on consent and other issues even though they may face an uphill battle on ATDS issues.

The plaintiff in Wright applied for a credit card and listed his cell phone number on the application. Id. at *1. He developed terminal cancer in 2018 and failed to make payments on the credit card. Id. Between July 2018 and January 2019, defendants’ agent called Mr. Wright’s cellphone number using the Aspect Dialing System to collect the credit card debt. Id. Evidence established that the Aspect Dialing System is a predictive dialer that does not have and is not capable of using a random or sequential number generator to dial numbers. Id.

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Supreme Court Holds Oral Argument via Teleconference in Barr v. American Association of Political Consultants

On May 6, 2020, the Supreme Court held oral argument via teleconference in Barr v. American Association of Political Consultants. The argument focused on the two questions presented in Barr. First, whether the Telephone Consumer Protection Act’s (TCPA) government debt exception is an unconstitutional content-based restriction on speech. And second, if the government debt exception is unconstitutional, whether the remedy is to sever the exception or instead strike the TCPA’s restrictions on automated telephone equipment in their entirety. A recording of the argument is available below (audio begins at the :30 mark) and a transcript is available on the Supreme Court website.

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D.C. High Court Holds that Businesses Do Not Face Strict Liability for Junk Faxes Advertising Their Products, Agency Principles Apply

FDS Restaurant, Inc. v. All Plumbing, Inc., No. 16-CV-1009, 2020 WL 1465919 (D.C. Mar. 26, 2020)

In a recent TCPA junk-fax case, the District of Columbia Court of Appeals drew the intuitive conclusion that businesses do not incur TCPA liability whenever their products are advertised via fax. The proposition that strict vicarious liability does not apply to advertised businesses is a simple one, but—as the D.C. Court of Appeals noted—courts have diverged as to the proper standard to apply for assessing vicarious liability for faxes sent in violation of the TCPA. In FDS Restaurant, the D.C. Court of Appeals had to decide for itself which standard to apply in this context.

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Attorney Facing Civil RICO Claim Ordered to Produce Attorney–Client Communications Made in Furtherance of Alleged Scheme to Manufacture TCPA Claims

A federal court presiding over a civil RICO action recently ordered prolific plaintiff’s attorney Jeffrey Lohman to produce his firm’s communications with its clients. See Navient Sols., LLC v. Law Offices of Jeffrey Lohman, P.C., No. 19-461, 2020 WL 1172696, at *1 (E.D. Va. Mar. 11, 2020). This decision shows that the crime-fraud exception may overcome the attorney–client privilege where a lawyer allegedly participates in a scheme to manufacture TCPA claims. It also suggests that such conduct might form the basis of a civil RICO claim.

The plaintiff in that case, Navient Solutions, alleged that the defendants, including Lohman, operated a fraudulent scheme to manufacture TCPA lawsuits. The defendants allegedly recruited student-debtors into signing up for a sham debt-relief program and told them to stop making loan payments owed to Navient, to pay defendants instead, and to follow a script to induce telephone calls from Navient that would — and ultimately did — form the basis for TCPA claims that were filed by Lohman and others. After patiently uncovering these facts in discovery in various TCPA cases, Navient went on the offensive by bringing a civil RICO claim predicated on alleged mail and wire fraud involved in the scheme.

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Court Denies Class Certification Due to Plaintiff’s Lack of Objective Criteria and Lack of Evidence

The Western District of Michigan recently denied a motion to certify a class after holding that the class was not ascertainable and the plaintiff had not offered persuasive evidence in support of the motion. Visser v. Caribbean Cruise Line, Inc., No. 13-1029, 2020 WL 415845 (W.D. Mich. Jan. 27, 2020).

The plaintiff alleged that Caribbean Cruise Line had violated the TCPA by using either an ATDS or an artificial or prerecorded voice without his prior consent. Specifically, he alleged that the call began with a prerecorded message that was followed by a live person who told him that he had won a free all-inclusive cruise. The plaintiff stated the caller told him that he had entered his phone number into a website called “leadpile.com.” Not believing this was true, the plaintiff told the caller that he had questions about the cruise. The caller then transferred the plaintiff to an agent who answered Plaintiff’s questions and provided details about the cruise.

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