District Court Departs from Supreme Court Plurality to Find Government-Debt Collector Retroactively Liable Under TCPA — But Rejects Statutory Damages

For nearly five years, the TCPA explicitly excluded from liability calls made to collect government-backed debt. Naturally, government debt collectors relied on this exception and called debtors without fear of TCPA liability. In 2020, the Supreme Court ruled that this exception was unconstitutional and severed it from the statute. Now, a federal district court has ruled that government debt collectors may be liable for calls made prior to the Supreme Court Ruling, despite their reasonable reliance on the exception. In doing so, the court brushed aside due process concerns.

As previously reported, the government debt exception was severed from the statute by the Supreme Court’s decision in Barr v. AAPC. The AAPC decision was highly fractured—with the Court issuing four opinions but none commanding a majority.  Since, district courts have been grappling with AAPC means for the statute.

Continue reading   »

TCPA Plaintiff Argues He Wasn’t Injured in Attempt to Dodge Federal Jurisdiction

Usually, it is the plaintiff that argues he or she was injured, not the defendant. But, in an effort to stay in state court, some TCPA plaintiffs have taken the counterintuitive position that they did not suffer an injury in fact under Article III of the U.S. Constitution and, therefore, their claims cannot be heard in federal court.

“[T]o satisfy Article III’s standing requirements, a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of Earth, Inc. v. Laidlaw Environmental Servs. (TOC), Inc., 528 U.S. 167, 180–181 (2000).

Continue reading   »

California District Court Criticizes Creasy, Concluding Barr Decision does not Deprive it of Jurisdiction

A district court from the Central District of California cast its lot against the growing argument that federal courts lack jurisdiction over TCPA claims based on conduct that occurred when the government debt exception was part of the statute. See Shen v. Tricolor California Auto Group, LLC, No. 20-7419, 2020 WL 7705888, at *1 (C.D. Cal. Dec. 17, 2020).

As our regular readers know, the government debt exception—a relatively new addition to the TCPA—was recently severed from the statute by the Supreme Court’s decision in Barr v. AAPC. Since, several federal district courts have questioned whether they may enforce the statute as to claims based on conduct that allegedly occurred while the exception was part of the statute, i.e. from November 2, 2015 through July 6, 2020. Most notably, the Eastern District of Louisiana concluded in Creasy v. Charter Communications that the Barr decision held that the TCPA was unconstitutional in its entirety during the pendency of the exception, that courts lack authority to enforce a constitutional statute, and that courts therefore cannot hear claims based on conduct during that period.

Continue reading   »

Professional Plaintiff Who Manufactured Claims Can Sue But Can’t Represent Class

A recent denial of a professional plaintiff’s motion for class certification shows that, irrespective of whether such plaintiffs have standing to sue on their own behalf, courts are increasingly skeptical that contrived claims are amenable to class treatment. See Hirsch v. USHealth Advisors, LLC, No. 4:18-CV-00245-P, 2020 WL 7186380, at *1 (N.D. Tex. Dec. 7, 2020).

Continue reading   »

A Divided Eleventh Circuit Holds that Incentive Awards are Prohibited

In a decision that may have far-reaching consequences, a divided panel of the Eleventh Circuit ruled that incentive awards to named plaintiffs—which are routine in TCPA and other class action settlements—are improper. See Johnson v. NPAS Solutions, LLC, No. 18-12344, 2020 WL 5553312, at *1 (11th Cir. Sept. 17, 2020). Despite acknowledging that incentive payments are commonplace in modern class action litigation, the majority held that such awards are prohibited under “on-point Supreme Court precedent” from the late 1800s and required reversal of the district court’s approval of a $1.4 million class settlement.

Continue reading   »

The FCC Clarifies that Certain Communications to COVID-19 Patients Fall with TCPA’s “Emergency Purposes” Safe Harbor

In a Public Notice issued July 28, 2020, the FCC confirmed that the TCPA’s safe harbor for calls or text messages made for “emergency purposes” applies to calls and text messages made by or on behalf of health care entities to communicate with individuals who have tested positive for COVID-19 to provide them with information regarding donating their plasma after recovery. As a result, in the FCC’s view, such calls or text messages during the ongoing pandemic do not require prior express consent to be lawful. Continue reading   »

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.

Continue reading   »

Second Circuit Joins Ninth Circuit in Adopting Expansive Interpretation of ATDS, But Carves Out Smartphones

In a decision released on April 7, the Second Circuit joined the Ninth Circuit in adopting an expansive interpretation of what qualifies as an Automatic Telephone Dialing System (ATDS), finding that online texting platforms that use human-generated lists and require a human to click “send” on a screen to initiate the texts falls within the statutory definition. Duran v. La Boom Disco, Inc., No. 19-600, 2020 WL 1682773, at *8–9 (2d Cir. Apr. 7, 2020). In an effort to respond to expected critics of their approach, the court explained its view of why “so-called smartphones” and other modern devices do not qualify as an ATDS despite having similar functionality to the online texting platforms at issue (the ability to store a list of numbers and to dial them by simply clicking “send”). Id. at *8 n.39. The decision deepens the divide between circuit courts on what qualifies as an ATDS.

Continue reading   »

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.

Continue reading   »