Sixth Circuit rejects Creasy line of cases, holding TCPA claims arising between November 2015 and July 2020 are viable

The Sixth Circuit recently became the first federal court of appeals to weigh in on whether plaintiffs can bring TCPA claims for conduct occurring between November 2015 and July 2020—the respective dates on which the unconstitutional government debt exception was passed and the Supreme Court’s decision in Barr v. AAPC declared it unconstitutional and severed it from the statute. Some district courts, such as the District of Louisiana in Creasy v. Charter Communications, Inc., 2020 WL 5761117 (E.D. La. Sept. 28, 2020), have concluded plaintiffs cannot—reasoning that the TCPA was void while an unconstitutional provision was part of it. As covered in our prior posts, district courts have come down on both sides of the issue—leading to significant confusion.

Enter the Sixth Circuit’s decision in Lindenbaum v. Realgy, LLC, No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021), which considered the Chief Judge of the Northern District of Ohio’s decision that dismissed a putative class action arising from prerecorded calls.

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FCC Seeks to Assess a $5.1 Million TCPA Fine from Political Operatives Behind Alleged Anti-Voting Phone Calls

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.

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Private Cause of Action Exists for Violations of Do-Not-Call Rule, North Carolina Federal Judge Says

Last week, Judge James C. Dever III of the U.S. District Court for the Eastern District of North Carolina handed down a decision of first impression for that court: the FCC’s do-not-call rule, 47 C.F.R. § 64.1200(d), creates a private right of action for telephone subscribers who receive calls in violation of that rule’s “minimum standards.” The decision widens the growing split among federal courts as to which provision of the TCPA gives life to the DNC rule.

On its motion to dismiss, the defendant argued that the plaintiff could not maintain an action for alleged violations of § 64.1200(d) because the FCC promulgated that rule under 47 U.S.C. § 227(d), which does not create a private right of action for violations of implementing regulations. Fischman v. MediaStratX, LLC, No. 2:20-CV-83-D, 2021 WL 3559639, at *4 (E.D.N.C. Aug. 10, 2021). In opposition, the plaintiff argued that the rule was actually passed pursuant to 47 U.S.C. § 227(c), which does create a private right of action for such violations. 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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FCC TCPA Actions Mid-Year Review

After adopting orders reflecting the majority of implementation deadlines set by the TRACED Act and the Supreme Court’s highly anticipated TCPA decision interpreting the statutory definition of automatic telephone dialing system in the first half of 2021, all eyes are on what the FCC has planned. Midsummer seems like a good time for a year-to-date review to track where the FCC has been and where it is headed next in its TCPA oversight and enforcement roles.

STIR/SHAKEN Call Authentication Framework

Last week, the FCC adopted its January 2021 proposal and issued a Report and Order establishing what the FCC describes as “a fair and consistent process” that a voice service provider can use to challenge a decision by the STIR/SHAKEN framework Governance Authority to strip that provider of the “digital token” that authenticates calls on that provider’s Internet-Protocol (IP) networks.

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Court denies class certification where question of who is a residential subscriber would predominate litigation

A court in the District of Oregon recently granted a defense motion to deny class certification, largely because the issue of whether the putative class representative’s phone number was “residential”—a prerequisite to TCPA protection—would predominate the litigation.

In Mattson v. New Penn Financial, LLC, the district court considered plaintiff’s objections to the magistrate judge’s findings and recommendation regarding defendant’s motion to deny class certification. No. 3:18-CV-00990-YY, 2021 WL 2888394, at *1 (D. Or. July 9, 2021). The magistrate judge had concluded that plaintiff was an inadequate class representative because questions remained concerning whether he alleged a sufficient injury in fact to bring a TCPA claim, and also because issues individual to the plaintiff would predominate the litigation.

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Does Unused “Capacity” Make a Dialer an ATDS? District Court Says “No” in Ruling on Pleading Requirements After Facebook

Three months after the Supreme Court’s landmark Facebook ruling, a growing number of trial courts have grappled with interpreting and applying the High Court’s directive.  One of the more interesting decisions came out of the Eastern District of Michigan recently.  In Barry v. Ally Fin., Inc., No. 20-cv-12378, 2021 WL 2936636, at *1-7 (E.D. Mich. July 13, 2021), the district court dismissed a putative TCPA class action on the grounds that the plaintiff failed to allege use of an ATDS.  More significantly, the district court interpreted Facebook to hold that to be an ATDS, the dialing system must actually use a random or sequential number generator to call the plaintiff, and not merely have the capacity to do so.

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S.D. Cal. Court Dismisses Claims, Finding Text Messages at Issue Were Not “Telephone Solicitations”

The Southern District of California recently granted (in part) a motion to dismiss in Gross v. GG Homes, Inc., 2021 WL 2863623 (S.D. Cal. 2021), because the text messages at issue were not “telephone solicitations” within the meaning of the TCPA. Notably, the Court found that the text messages did not qualify as solicitations because they were “targeted at procuring services from Plaintiff” (as opposed to selling something to Plaintiff).

Plaintiff alleged that Defendant (a real estate firm) violated the TCPA when it sent text messages (and placed calls) to her cell phone. Defendant filed a motion to dismiss challenging her Article III standing as well as the sufficiency of her factual allegations for her TCPA claims. The Court began by rejecting Defendant’s arguments that Plaintiff lacked standing, that Plaintiff failed to allege facts showing that Defendant might be responsible for the texts at issue, and that Plaintiff failed to allege that Defendant used an ATDS to send the text messages. But the Court agreed with Defendant that Plaintiff’s § 227(c) claims—based on sending the text messages to a number on the national Do-Not-Call Registry—must be dismissed.

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Facebook Decision Upends TCPA Litigation Landscape

TCPA Blog’s Mike Daly co-authored an article for the ABA about the impact of the Supreme Court’s recent ruling in Facebook, Inc. v. Duguid, which clarifies the TCPA’s definition of an ATDS. The article explains that the unanimous decision is a victory for businesses because it limits the scope of the statute’s restriction on autodialing and because it should drastically decrease the volume of litigation arising under that part of the statute, which has been one of the most active areas of litigation in recent years. But the article also predicted that the ruling may cause plaintiffs’ counsel to focus on other calling restrictions, for example its restrictions on artificial or prerecorded voices, Do-Not-Call restrictions, and even faxes.

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