Proposed Federal TCPA Legislation Offers a New and Broad ATDS Definition

On July 12, 2022, Representatives Raja Krishnamoorthi, D-Ill., and Katie Porter, D-Calif. introduced H.R. 8334 in the U.S. House of Representatives, which was referred to the Committee on Energy and Commerce. The bill would amend the Telephone Consumer Protection Act (the “TCPA”), 47 U.S.C. § 227, to, among other things, “prohibit the use of automated telephone equipment to send unsolicited text messages.”

The TCPA presently defines “automatic telephone dialing system” (or “ATDS”) as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator . . . to dial such numbers.”  The law generally prohibits any person from making nonconsensual telemarketing or other types of telephone calls to a cell phone number using an ATDS.

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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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Supreme Court Asked to Review Retroactivity of Barr v. AAPC

The retroactivity of the Supreme Court’s decision in Barr v. AAPC is back before the Supreme Court to decide—if, that is, it grants the petition for certiorari that was just filed by the Defendant in Lindenbaum v. Realgy.

Some background may help. As our regular readers know, Barr v. AAPC held that the TCPA’s exemption for federal debt-collection calls—and only federal debt-collection calls—was a content-based regulation of speech that violated the First Amendment. But rather than strike down all of the statute’s restrictions on automated equipment, the Court saved them by severing that one exemption from the statute.

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California Court Enters Summary Judgment Against Plaintiff Who Failed To Prove Vicarious Liability

A court in the Northern District of California recently granted a defense motion for summary judgment, finding that the defendants were not vicariously liable for a subcontractor’s supposed TCPA violations because the record showed that they had neither given the subcontractor authority to violate the TCPA nor ratified its acts.

In Schick v. Caliber Home Loans, Inc., defendant Caliber hired defendant NextLevel to generate leads for its home loan refinancing business. No. 20-CV-00617-VC, 2021 WL 4166906, at *1 (N.D. Cal. Sept. 14, 2021). Their contract mandated that NextLevel “perform or provide” its services “in full compliance with … all applicable federal, state, and local laws, regulations and ordinances.” Id. The contract further required that NextLevel “not allow any subcontractor … to perform or provide” services “without … prior written consent.” Id. Without Caliber’s consent, in violation of the subcontractor provision, NextLevel hired subcontractor Driving Force to provide leads. Id. After allegedly receiving two calls on a number on the national “Do Not Call” Registry, Plaintiff filed suit and sought to hold the defendants vicariously liable. Id.

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Ninth Circuit Vacates Certification of Nationwide Classes, Holding that Defendant Did Not Waive Personal Jurisdiction Challenge by Not Raising It Precertification

On August 10, 2021, a divided Ninth Circuit panel vacated a trial court’s certification of two nationwide classes, finding that the defendant had not waived its personal jurisdiction objection to class certification by not raising the issue at the pleading stage. See Moser v. Benefytt, Inc., No. 19-56224, 2021 WL 3504041 (9th Cir. Aug. 10, 2021).

This case arose as a putative nationwide class action filed by Kenneth Moser in federal court in California against Benefytt Technologies, Inc., formerly known as Health Insurance Innovations, Inc. (HII), alleging that HII was responsible for unwanted sales calls that violated the TCPA. Moser was a resident of California, whereas HII was incorporated in Delaware and had a principal place of business in Florida.

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Telemarketers’ Alleged Conduct Establishes Personal Jurisdiction over Principal with No Direct Forum Ties, Seventh Circuit Holds

The Seventh Circuit has reversed a decision from last year by the U.S. District Court for the Northern District of Illinois dismissing a TCPA claim for lack of personal jurisdiction over an alleged principal of the caller.  That decision, which we covered here, concluded that the plaintiff had not established an agency relationship between defendant Health Insurance Innovations, Inc. (“HII”) and the unnamed “lead generators” that had made the allegedly unsolicited calls.  Bilek v. Fed. Ins. Co., No. 19-8389, 2020 WL 3960445, at *5 (N.D. Ill. July 13, 2020).  As a result, the Northern District held that it lacked specific personal jurisdiction over HII, which had no connection to the forum state beyond its alleged relationship with the telemarketers that called the plaintiff in Illinois.  Id.

On appeal, the plaintiff argued that he had plausibly alleged an agency relationship and that the district court should therefore have imputed the caller’s conduct to HII when assessing whether it could exercise specific personal jurisdiction over the latter.  Bilek v. Fed. Ins. Co., No. 20-2504, 2021 WL 3503132, at *6 (7th Cir. Aug. 10, 2021).

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Supreme Court’s Facebook Decision Upends TCPA Litigation Landscape

TCPA Blog’s Michael Daly will be participating in a webinar titled “Supreme Court’s Facebook Decision Upends TCPA Litigation Landscape.” This webinar on Thursday, April 22, 2021, will delve into the Supreme Court’s decision in Facebook v. Duguid, which resolved a split among the lower courts over how to interpret the TCPA’s definition of an “automatic telephone dialing system.”  The panelists from the Consumer Litigation Committee of the American Bar Association’s Litigation Section will analyze the decision and discuss the future of TCPA litigation.

For more information and to register, please click here.

Auto Service Contractor Not Subject to Court’s Jurisdiction in Texas Resident’s TCPA Claim, Holds State’s Federal Northern District

The Northern District of Texas handed down a decision exploring the jurisdictional limitations on TCPA plaintiffs’ ability to hale out-of-state defendants into a plaintiff’s local federal court.

The case, Horton v. Sunpath, Ltd., involved a Texas resident (Lucas Horton) who launched a TCPA suit against a Massachusetts-based corporation (Sunpath).  Horton alleged that Sunpath’s agent, Northcoast Warranty Services, placed several calls to his cell phone using an automatic telephone dialing system and pre-recorded messages, despite the number’s listing on the National Do-Not Call Registry.  No. 3:20-cv-1884-B-BH, 2021 WL 982344, at *1 (N.D. Tex. Feb. 16, 2021).  On the calls, Horton stated, Northcoast encouraged him to purchase an auto service policy administered by Sunpath.  Id.  The calls continued for about three months until Horton purchased a policy from Sunpath in May 2020.  Id.  Horton filed suit against Sunpath about a month later in the Northern District of Texas.  Id.

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Senescence and Sensibility: Will the Supreme Court Mothball the TCPA?

TCPA Blog’s Mike Daly authored an article for the American Bar Association’s Consumer Litigation Committee titled, “Senescence and Sensibility: Will the Supreme Court Mothball the TCPA?” that discusses developments around TCPA’s autodialer restriction.The article addresses the dispute between courts over what qualifies as an ATDS and the impact the dispute has had on businesses trying to comply with the statue when its scope varies between circuit courts.The article also highlights how what constitutes an ATDS may finally be resolved in Facebook v. Duguid and what the case’s decision could mean for pending cases.

The full article is available for American Bar Association’s Consumer Litigation Committee subscribers.

Another Court Rejects Threadbare Allegations of So-Called Vicarious Personal Jurisdiction

The District of Arizona recently dismissed Winters v. Grand Caribbean Cruises, Inc., No. 20-0168, 2021 WL 511217 (D. Ariz. Feb. 11, 2021), for lack of personal jurisdiction, finding that the plaintiffs had failed to establish that the caller’s contact with Arizona could be imputed to Grand Caribbean.

The plaintiffs alleged that Grand Caribbean violated the TCPA by using a prerecorded voice to initiate calls to numbers on the Do-Not-Call Registry.  Grand Caribbean moved to dismiss for lack of personal jurisdiction, among other things.

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