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Posts Tagged ‘ATDS’

Largest Jury Verdict in TCPA History: Defendant Faces $925 Million in Damages

Posted on: April 18th, 2019

By: Jennifer Lee

On Friday, April 12, 2019, a federal jury in Oregon rendered a verdict in a certified class action that could leave ViSalus, Inc. on the hook for $925 million for making more than 1.85 million unsolicited robocalls in violation of the Telephone Consumer Protection Act (“TPCA”). The case is Wakefield v. ViSalus Inc., Case No. 3:15-cv-01857, in the U.S. District Court for the District of Oregon.

The TCPA prohibits prerecorded calls to cell phones and home phones without prior written consent from the recipient. The TCPA also prohibits the use of an automated dialing system (“ATDS”) to place calls to cell phones without prior written consent. This was a non-issue as ViSalus had already conceded that it used an ATDS for the calls at issue.

During the three-day trial, the named plaintiff and class representative Lori Wakefield testified that she had received four prerecorded calls from ViSalus on her home phone even though she did not consent to such calls. The jury believed her and concluded that the four calls received by Wakefield and the 1.85 million calls received by members of the certified class violated the TCPA.

Statutory damages for TCPA violations are $500 per call, and with more than 1.85 million calls at issue, this verdict could translate into approximately $925 million in damages for ViSalus. But there is more. Since the TCPA allows for treble damages for deliberate violations, if U.S. District Judge Michael Simon finds that ViSalus “willfully or knowingly” violated the statute, ViSalus may be subject to $2.775 billion in damages.

This verdict has wide-reaching implications for companies. It shows that jurors are receptive to TCPA class actions and do not view them as nuisance cases. This is in part because consumers are being bombarded by unwanted telemarketing calls, which are at historical highs and increasing every year. It also means that companies will have a harder time settling these cases and will lead to higher settlement amounts as the plaintiffs’ bar becomes more willing to take TCPA class actions all the way to trial.

If you have any questions regarding the TCPA, including compliance and defending against a TCPA class action, please contact Jennifer Lee at [email protected].

Ninth Circuit Compounds ATDS Confusion in TCPA, Causing FCC to Seek Further Comment

Posted on: October 8th, 2018

By: Matt Foree

As we previously discussed in the ACA International decision, the U.S. Court of Appeals for the D.C. Circuit recently rejected the Federal Communications Commission’s (“FCC”) guidance concerning the definition of automatic telephone dialing system (ATDS), one of the key components of liability in the Telephone Consumer Protection Act (“TCPA”).  Among other things, the TCPA prohibits using an ATDS to make calls to a cellular telephone without consent.  Since the D.C. Circuit’s ruling, courts have wrestled with the analysis of what qualifies as an ATDS, which has created a patchwork of decisions.  Some courts determined that the FCC’s pre-2015 guidance on the topic is no longer relevant.  Other courts have relied on that previous FCC guidance in their rulings.

On September 20, 2018, the U.S. Court of Appeals for the Ninth Circuit added to the confusion.  In the Marks v. Crunch San DiegoLLC case, the court analyzed a device called the Textmunication system, which is a web-based marketing platform used to send promotional text messages to a list of stored telephone numbers.  In analyzing whether the device was an ATDS, the court determined that the FCC’s pre-2015 guidance on the definition of an ATDS were no longer binding. Therefore, it determined that only the statutory definition of ATDS remains, such that it analyzed the device at issue under the definition in the TCPA. The statute provides that an ATDS is “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

The court struggled with the statutory language, finding that it is ambiguous on its face, such that it turned to other aids in interpreting it. Among other things, the court looked at the “context and structure of the statutory scheme.”  In doing so, it determined that, although Congress focused on regulating the use of equipment that dialed blocks of sequential or randomly generated numbers, the statutory language extended to equipment that made automatic calls from lists of recipients.  Therefore, reading the ATDS definition in context and with a view to its “place in the overall statutory scheme,” the Ninth Circuit concluded that the “statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator,’ but also includes devices with the capacity to dial stored numbers automatically.”  Accordingly, the court read the statute to provide that ATDS means “equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers.”

In May of this year, the FCC had previously sought comment on the contours of the ATDS definition in light of the ACA International decision.  Significantly, on October 3, 2018, after the Marks ruling, the FCC requested further comment on interpretation of ATDS in light of the Marks decision. Specifically, the FCC sought further comment on how to interpret and apply the statutory definition of ATDS in light of the Marks decision, as well as how that decision might impact the analysis of the ACA International case.  Comments are due October 17, 2018, with reply comments due on October 24, 2018.

If you have any questions regarding the current status of ATDS analysis, the Marks decision, or the FCC’s request for further comment, please contact Matt Foree at [email protected].

 

BREAKING – D.C. Circuit Sets Aside Key Portions of FCC Ruling in Long-Awaited TCPA Decision

Posted on: March 20th, 2018

By: Matthew N. Foree

The United States Court of Appeals for the District of Columbia Circuit has finally issued its decision in the appeal of the Federal Communication Commission’s July 2015 Declaratory Order regarding the Telephone Consumer Protection Act. The industry has been anxiously awaiting this decision for over two years. The decision provides helpful guidance to those defending TCPA claims. The highlights are set forth below.

First, the decision rejects the FCC’s guidance concerning the qualifications of an automatic telephone dialing system (ATDS). Whereas the FCC defined ATDS broadly such that it took into consideration the device’s potential ability to store or produce telephone numbers to be called and to dial such numbers in determining its “capacity” to do so, the D.C. Circuit found that this definition was impermissibly expansive.  Among other things, the D.C. Circuit found that the FCC’s decision “fails to satisfy the requirement of reasoned decisionmaking.”  Therefore, the court set aside the FCC’s treatment of the issue.

Also, the D.C. Circuit considered the FCC’s treatment of reassigned cellular telephone numbers and particularly the issue of consent provided by one user of a cell phone when that number is reassigned to another user.  The FCC determined that callers could have one free call to continue to rely on the previous subscriber’s consent.  The D.C. Circuit questioned why the consent should stop at one call and determined that the FCC did not provide a satisfactory answer to this question.  As such, the court set aside the FCC’s treatment of reassigned numbers as a whole.

Additionally, the D.C. Circuit considered the revocation of consent, an issue that has become particularly active in TCPA litigation. The D.C. Circuit did not set aside the FCC’s determination that consent could be revoked at any time by any reasonable means.

Please join Matt Foree and Jennifer Lee on Thursday, March 29, 2018 at 3:00 PM EST for a webinar entitled “Unpacking the D.C. Circuit’s Decision on the FCC’s 2015 TCPA Ruling.”  We will discuss in more detail the D.C. Circuit’s decision, including the impact of the ruling on the defense of TCPA cases moving forward.

If you have any questions or would like more information, please contact Matthew Foree at [email protected].