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Archive for July, 2013

TCPA Class Action on Opt-Out Confirmation Text Messages Dismissed

Posted on: July 15th, 2013

By: Matt Foree

A U.S. District Court in California recently dismissed a putative class action under the Telephone Consumer Protection Act (TCPA).  See Holt v. Redbox Automated Retail, LLC, Case No. 11cv3046 (S.D. Cal. 2013).  The matter concerned Defendant Redbox Automated Retail, LLC (Redbox) and its post opt-out confirmation text messages.  The original plaintiff in the matter, Kathleen Holt, who filed the complaint individually and on behalf of all others similarly situated, responded to an unsolicited text message from Redbox with an opt-out text message.  In response to Holt’s text, Redbox sent another text message confirming the opt-out and supplying a link to a website for more information.

In response to the plaintiffs’ putative class action Complaint for violations of the TCPA, Redbox filed a motion to dismiss, raising several arguments, including a challenge to the constitutionality of the TCPA.  Among other things, Redbox argued that prohibiting the confirmation messages would be a restriction on noncommercial speech inconsistent with Congress’s intent, which was to prohibit commercial telemarketing practices considered to be a risk to public safety and an invasion of privacy.  As a result of the constitutional challenge, the United States intervened in support of the constitutionality of the TCPA.

Redbox also relied on the Federal Communications Commission’s (FCC) ruling in the SoundBite Communications, Inc. (SoundBite) matter, which concerned a similar issue as in the Redbox case.  In the SoundBite matter, the FCC held that sending a one-time text message confirming a consumer’s request that no further text messages be sent does not violate the TCPA or the FCC’s rules as long as the confirmation text has certain characteristics, including that it merely confirm the opt-out request and not include marketing or promotional information and is the only additional message sent to the consumer after receipt of the opt-out request.  The SoundBite declaratory ruling is available here.

In analyzing Redbox’s motion to dismiss, the court determined that the plaintiffs failed to state a claim as a matter of law.  In so holding, the court relied on previous precedent, Ibey v. Taco Bell Corp., No. 12-cv-0583-H, 2012 WL 2401972 (S.D. Cal. June 18, 2012), in which the U.S. District Court for the Southern District of California found no violation for a confirming text based solely on its interpretation of the TCPA.  Specifically, that court held that “the TCPA does not impose liability for a single, confirmatory text message,” noting the purpose of the TCPA to “prevent unsolicited automated telemarking and bulk communications.”  Id. at 3.  The Ibey court also held that “[t]o impose liability under the TCPA for a single, confirmatory text message would contravene public policy and the spirit of the statute – prevention of unsolicited telemarketing in a bulk format.”  Id.  The court relied on Ibey to grant Redbox’s motion to dismiss, reasoning that the TCPA does not impose liability for the single, confirmatory text messages at issue, such that the plaintiffs failed to state a claim as a matter of law.

Additionally, the court addressed the plaintiffs’ argument that Redbox’s confirming texts include forbidden marketing and promotional information in the form of links to Redbox’s website.  The court, however, declined to adopt this “‘look through’ approach to liability under the TCPA,” opting instead to view the texts themselves to determine that they did not contain marketing or promotional information for products or services.  As a result, the court held that the texts do not contravene SoundBite and could not form the basis for liability under the TCPA.

Significantly, a large portion of Redbox’s motion to dismiss was devoted to a constitutional challenge to the TCPA.  In response to Redbox’s constitutional challenge, the United States intervened to file a brief in support of the constitutionality of the TCPA.  As such, the stage was set for the court to add to the developing case law regarding such challenges by addressing these arguments.  By relying on SoundBite and Ibey, however, the court avoided analyzing Redbox’s constitutional arguments.




EEOC Sues Over Criminal Background Checks

Posted on: July 12th, 2013

By La’Vonda McLean

The U.S. Equal Employment Opportunity Commission (EEOC) has begun filing lawsuits against employers for their use of criminal background checks.  Last month, the EEOC filed a lawsuit against Dollar General and a BMW manufacturing plant in South Carolina over their use of criminal background checks that resulted in employees being fired and job applicants being screened out for employment.

The two lawsuits are the first since the agency issued its revised Enforcement Guidance in April 2012 updating its prior position that using such records as an absolute bar for hiring a potential candidate (or making any other employment decision) could limit the employment opportunities of some protected groups and, thus violate Title VII.

In the suit against BMW, the EEOC alleges that BMW disproportionately screened out African Americans from jobs, and that the policy is not job related and consistent with business necessity.  Since 1994, BMW has had a criminal conviction policy that denies facility access to BMW employees and employees of contractors with certain criminal convictions.  BMW’s policy has no time limit with regard to convictions.  The commission claims BMW’s policy is a blanket exclusion without any individualized assessment of the nature and gravity of the crimes, the ages of the convictions, or the nature of the claimants’ respective positions.
In the Dollar General case, the Chicago office of the EEOC filed a nationwide lawsuit based on discrimination charges filed by two rejected African-American applicants.  The EEOC alleges that one of the applicants was given a conditional employment offer even though she disclosed a six-year-old conviction for possession of marijuana.  However, the commission claims her job offer was revoked because Dollar General’s practice was to disqualify an applicant who had this type of conviction within the past ten years.  According to the EEOC, the other applicant was fired by Dollar General despite the fact that the conviction records check report about her was wrong.  The commission claims that even after she advised Dollar General of the mistake in the report, the company did not reverse its decision to fire her.

The EEOC strongly encourages (although does not require) employers to go through an “individualized assessment” to those applicants screened out by the criminal background check process to determine if the criminal record truly should have an impact on the individual’s employment opportunity.

E-Verify: Five Tips for Efficient Use

Posted on: July 12th, 2013

By Kelly Eisenlohr-Moul

E-Verify is now mandatory for every Georgia employer with more than ten employees.  Below are five tips addressing the most frequent mistakes made by E-Verify users:

1. Display the mandatory “Notice of Participation” and “Right to Work” posters. Employers enrolled in E-Verify must display the correct English and Spanish posters in a prominent space, visible to employees.

2. Only E-Verify new hires.  E-Verify may not be used to pre-screen potential employees or before Sections 1 and 2 of the Form I-9 have been completed.  Use only for new employees (unless you are a federal contractor).

3. Understand the tentative non-confirmation process.  Employees whose I-9 information does not match that in federal databases must be given at least eight (8) federal working days to contest the TNC.  They must be allowed to work their regularly scheduled hours during this time.  Failure to follow this protocol may result in an I-9 and E-Verify audit by Immigrations and Customs Enforcement (ICE) or the Office for Special Counsel (OSC).

4. Be wary of E-Verify Photo Matching.  E-Verify contains a photo matching tool that is triggered when a potential employee provides permanent resident card (Form I-551), Employment Authorization Document (Form I-766B), or a US passport or passport card.  This applies only if your employee voluntarily provides these documents.  In January of this year, a South Carolina company paid $250,000 in fines for treating work-eligible non-U.S. citizens different from U.S. citizens through use of E-Verify photo matching.

5. Establish a process to double-check all sections of the Form I-9.  Administrative oversights and errors, such as an employee’s failure to sign Section 1, an employer’s failure to complete the Form I-9 no later than 3 days after hire, and the employer’s failure to sign Section 2 have all been deemed “substantive” violations, resulting in stiffer penalties.  Although an employee may be appropriately e-verified, this does not mean that his or her Form I-9 was completed properly.

New Georgia Court of Appeals Case Sheds Light on the Interplay Between Summary Judgment and Rule 68 Offers of Settlement

Posted on: July 12th, 2013

By: Wayne S. Melnick


Since they came into existence as part of the 2005 Tort Reform Act, Rule 68 Offers of Settlement have become an effective weapon in the defense attorney’s arsenal.  Pursuant to O.C.G.A. § 9-11-68, these offers allow a party to tort litigation in Georgia to make an offer of settlement to the opposing side.  If that Rule 68 Offer is rejected and if the rejecting party does not achieve a judgment in an amount equal to or greater than a certain percentage of that offer, then the rejecting party is responsible for all its oppositions attorney’s fees and expenses of litigation from the date of the rejection.  In the case of an offer made from a defendant to a plaintiff, if the plaintiff rejects the offer, he must obtain a verdict that is equal to or greater than 75% of the offer.

By statute, Rule 68 offers must remain open for thirty days to be valid.  The offer can be revoked prior to the thirty days, but if it is, then the party that made the offer cannot later seek to recover attorney’s fees and litigation expenses under that Code section.  If the offer remains open for the full thirty days but is not accepted during that time, then the offer is deemed rejected by operation of statute.

A recent case highlights the importance of the defense understanding the status and timing of its offers relative to other action in the case.  In Graham v. HHC St. Simons, Inc., 2013 WL 3358030 (Ga. Ct. App. Case No. A13A0454, decided July 5, 2013), the Georgia Court of Appeals was faced with a situation where competing Rule 68 Offers were made and summary judgment was granted.  In Graham, while the defense’s summary judgment motion was pending, the defense made a Rule 68 Offer of $100,000.00.  Plaintiff then made a counter-Rule 68 offer of $200,000.00, which, by operation of statute, automatically rejected the defense’s $100,000.00 Rule 68 Offer.  The defense then rejected plaintiff’s counter-Rule 68 Offer and sent a fax to plaintiff that “reiterate[d its] previous offer of $100,000.00.”  Twenty days after that fax was sent, the trial court granted summary judgment to the defense. The next day, the plaintiff faxed a purported acceptance of the $100,000.00 offer and later filed a motion to enforce settlement.

The Georgia Court of Appeals affirmed the trial court’s denial of the motion to enforce settlement. In doing so, the appellate court found the “reiterated” $100,000.00 offer was not a Rule 68 Offer but merely a common law settlement offer that was revoked upon the granting of summary judgment because the granting of summary judgment concluded the “reasonable time” the offer was required to remain open under common law.

Graham is important to all defendants, insurers and defense counsel because it highlights the importance of being aware of the status of the case with regard to any Rule 68 Offers of Settlement.  Had Graham determined the offer in question was a Rule 68 Offer, then the offer would have been required to have remained open for thirty days unless explicitly revoked by the offering party.  See O.C.G.A. § 9-11-68(c).  If that were the case, then the granting of summary judgment would not have acted to revoke the offer and the defense would have been stuck paying the settlement that was timely accepted by the plaintiff.

It is incumbent upon the defense to ensure that if a Rule 68 Offer is outstanding when summary judgment is granted, that the Rule 68 Offer immediately be revoked in writing as required by Rule 68(c).  If no revocation is quickly and timely made, then plaintiff still has the full thirty days to accept the offer even if summary judgment is granted against it.

Contractors are Under Greater Scrutiny for Compliance with Davis Bacon Requirements

Posted on: July 9th, 2013

By: Kamy Molavi


Recently, we at FMG’s construction law group have seen several cases involving the Davis Bacon Act.  Davis Bacon is the federal law that requires all workers to be paid the “prevailing wages” on federal contracts.  The law also applies to a non-federal contract if the project is at least partially paid for from certain federal funds.

Our clients in the recent cases are either general contractors or subcontractors.  The Department of Labor claimed our clients’ first-tier or second tier subcontractors had failed to pay the prevailing wages, and sought to collect the shortfall from our clients even though the unpaid or underpaid workers were not employees of the clients.

This indirect liability is not new.  What seems to be new is the prevalence of DOL investigations in the past two years.  Some attribute the recent focus to the political climate, and others blame unions for instigating the investigations.  We do not know what is causing the recent investigative vigilance, but the trend is undeniable.

If the Davis Bacon Act applies, contractors and subcontractors cannot rely on certified payrolls from downstream employers.  They should take steps to understand the wage requirements of their projects, especially the classification of workers needed on the job, and the proper rate for each classification.  It is also prudent to make sure all employers on the project maintain good time records, and to the extent feasible, also to monitor payments to all workers.