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Posts Tagged ‘TCPA’

Supreme Court to Hear Arguments Remotely, Including TCPA Constitutional Challenge

Posted on: April 16th, 2020

By: Matthew Foree

This week, the United States Supreme Court announced that it would hear oral arguments remotely for the first time in its history.  The Court will hear oral arguments by telephone conference on certain dates in May in a limited number of cases that had previously been postponed.  The cases are to be assigned dates for argument after confirming counsel’s availability.

The Court’s press release provides that “[i]n keeping with public health guidance in response to COVID-19, the Justices and counsel will all participate remotely.”  Interestingly, the Court stated that it “anticipates providing a live audio feed of these arguments to news media” and that “[d]etails will be shared as they become available.”

Among the cases the Court is set to hear in May is Barr v. American Association of Political Consultants, Inc., which concerns a constitutional challenge to the Telephone Consumer Protection Act (“TCPA”).  The Court has just scheduled argument in the Barr case for Wednesday, May 6, 2020.The TCPA generally prohibits calls to a cellular telephone using either an “automatic telephone dialing system” (ATDS) or an “artificial or prerecorded voice,” unless the call is made with the prior express consent of the recipient.  In a 2015 amendment to the TCPA, Congress exempted from this prohibition calls “made solely to collect a debt owed to or guaranteed by the United States.” 

In 2016, the Respondents in Barr initiated a declaratory judgment action against the Federal Communications Commission (“FCC”) and the Attorney General, arguing that the TCPA’s content-based ban on protected speech violated the First Amendment.  They sought declaratory relief and an injunction restraining the Government from enforcing the ban against them.  The case made its way to the U.S. Court of Appeals for the Fourth Circuit, which found a First Amendment violation and determined that the government-debt exception was severable from the rest of the TCPA.    

As we have discussed previously, TCPA litigation often centers around whether calls were made using an ATDS.  The current litigation landscape concerning the interpretation of the definition of ATDS has caused a split in the Circuit Courts and generated significant confusion that continues to this day.  In Barr, Respondents argue that the TCPA’s automated call restriction, not just the government-debt exception, violates the First Amendment.  Accordingly, practitioners in this area are anxious for the ruling on this matter, particularly as it relates to how far the Supreme Court will go to resolve the constitutional issue, which can have a major impact on the statute and TCPA litigation moving forward.  

Additional Information:

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Breaking – Eleventh Circuit Holds No TCPA Standing For Receipt of Single Unsolicited Text Message

Posted on: August 29th, 2019

By: Matthew Foree

In Salcedo v. Alex Hanna, the U.S. Court of Appeals for the Eleventh Circuit has just issued a major decision holding that receipt of a single unsolicited text message does not establish standing under the Telephone Consumer Protection Act (“TCPA”). A copy of the opinion is available here.

In this case, the plaintiff, who was a former client of the defendant law firm, received a multimedia text message from the defendant offering a 10% discount on his services. Plaintiff filed suit as a representative of a putative class of former clients who received unsolicited text messages from the defendant in the past four years alleging violations of the TCPA.

In reaching its decision, the court considered Eleventh Circuit precedent in the Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D. D. S., P. A. case, in which it found standing for a plaintiff who alleged that receiving a junk fax in violation of the TCPA harmed him because, during the time that it took to process the fax message, his fax machine was unavailable for legitimate business. The court distinguished that case based on differences between faxes and text messages.  Among other things, it found that a fax message consumed the fax machine entirely while a text does not consume a cellular phone.  It noted that, unlike a cellular phone, a fax machine is unable to receive another message while processing.

The court also looked to the judgment of Congress as to whether plaintiff’s allegations were treated as a concrete injury-in-fact. Among other things, the court recognized that “Congress’s legislative findings about telemarketing suggest that the receipt of a single text message is qualitatively different from the kinds of things Congress was concerned about when it enacted the TCPA. In particular, the findings in the TCPA show a concern for privacy within the sanctity of the home that do not necessarily apply to text messaging.” The court determined that Congress’s “privacy and nuisance concerns about residential telemarketing are less clearly applicable to text messaging.” Significantly, it noted that a single unwelcome text message will not always involve intrusion into the privacy of the home in the same way that a voice call to a residential line necessarily does.  As part of its analysis, the court also found the Ninth Circuit decision in the Van Patten v. Vertical Fitness Group, LLC case, which dealt with the same issue, unpersuasive.  It distinguished that case by noting that it stopped short of examining whether isolated text messages not received at home come within the judgment of Congress.

The Eleventh Circuit also found that history and the judgment of Congress do not support finding concrete injury in plaintiff’s allegations. It noted that the plaintiff did not allege “anything like enjoying dinner at home with his family and having the domestic peace shattered by the ringing of the telephone.” The court  summed up its position by stating that the “chirp, buzz, or blink of a cell phone receiving a single text message is more akin to walking down a busy sidewalk and having a flyer briefly waved in one’s face. Annoying, perhaps, but not a basis for invoking the jurisdiction of the federal courts.”

Judge Pryor concurred in judgment only and noted that the majority opinion appropriately, and her view, leaves unaddressed whether a plaintiff who allege that he had received multiple unwanted and unsolicited text messages may have standing to sue under the TCPA. With this understanding, she concurred in the majority’s judgment.

It remains to be seen how this case will be used to defeat standing in future cases, including how it is applied to cases involving multiple text messages and calls to cellular telephones.  This is a major decision that will have a drastic effect on standing in TCPA class action cases. If you have any questions about this decision, please do not hesitate to contact Matt Foree at [email protected].

Fourth Circuit Affirms $61 Million TCPA Judgment

Posted on: June 18th, 2019

By: Matt Foree

The United States Court of Appeals for the Fourth Circuit recently affirmed a judgment based on a jury verdict of over $61 million for illegal telemarketing calls made under the Telephone Consumer Protection Act (“TCPA”). As a matter of background, plaintiff Thomas Krakauer brought the TCPA lawsuit against Dish Network, L.L.C. (“Dish”) after he received telemarketing calls from Dish’s third-party contractor, Satellite Systems Network (“SSN”), which made calls on its behalf, despite the fact that Krakauer had listed his telephone number on the national Do Not Call registry. The TCPA provides for a private right of action to those who have received more than one telephone solicitation within any 12-month period to a number listed on the Do Not Call registry without consent or an established business relationship. The TCPA provides for statutory damages of $500 per violation, which can be trebled to $1500 per violation for willful or knowing violations.

In 2015, Krakauer filed a class action lawsuit in the District Court for the Middle District of North Carolina. The District Court certified the class and the case went to a jury trial. The jury awarded $400 per call as damages and found that the calls were willful, thereby trebling the damages, which resulted in an over $61 million jury verdict.

Dish appealed the judgment on several bases. When it challenged the standing of some of the class members, the Fourth Circuit made quick work of that argument, relying on the U.S. Supreme Court’s recent Spokeo, Inc. v. Robins decision to find that standing existed. In so holding, the court underscored the legal traditions recognizing intrusions upon personal privacy. Dish also challenged class certification. Noting that Dish’s core argument seemed to be that the class included a large number of uninjured persons, the Fourth Circuit upheld class certification, finding that the class certified by the District Court easily met the demands of Rule 23.

Finally, Dish argued that it was not liable for SSN’s conduct and that the violations were not knowing or willful to permit treble damages. The court found that considerable evidence supported an agency relationship between Dish and SSN. Among other things, the court referred to the provisions of the parties’ contract giving Dish broad authority over SSN’s business and the fact that Dish authorized SSN to use its name and logo during its operations. Finally, the court found that the willful or knowing standard was met, thereby upholding the judgment.

Throughout the Fourth Circuit’s opinion, the court made several charitable statements about the TCPA, suggesting that the statute is straightforward and easy to apply. It also described the appropriateness of TCPA claims for class certification. In sum, this case provides a case study of many of the landmines confronted by TCPA defendants, including potentially devastating statutory damages, class certification, and vicarious liability issues. This case is just the latest reminder that those operating in this space would do well to ensure strict compliance with the TCPA to avoid a similar fate.

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

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].

Bipartisan TRACED Act Enhances Penalties for Illegal Robocalls

Posted on: December 7th, 2018

By: Matt Foree

U.S. Senator John Thune (R-S.D.), the chairman of the Senate Committee on Commerce, Science and Transportation, and Senator Ed Markey (D-Mass.), a member of the committee and author of the Telephone Consumer Protection Act (“TCPA”), recently announced the introduction of the Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act.  Senator Roger Wicker (R-Miss.), the chairman of the committee’s Subcommittee on Communications, Technology, Innovation and the Internet is a cosponsor of the bill.

The TRACED Act is introduced in a climate of increased frustration from consumers about robocalls that are not being sufficiently addressed by the TCPA.  Senator Thune explained that “the TRACED Act targets robocall scams and other intentional violations of telemarketing laws so that when authorities do catch violators, they can be held accountable. Existing civil penalty rules were designed to impose penalties on lawful telemarketers who make mistakes. This enforcement regime is totally inadequate for scam artists, and we need do more to separate enforcement of carelessness and other mistakes from more sinister actors.”

Significantly, the bill broadens the authority of the Federal Communications Commission (“FCC”) to levy civil penalties of up to $10,000 per call against those violating telemarketing restrictions. The bill also provides new criminal fines of up to $10,000 per violation, with the opportunity to treble such amount if the activity is intentional.  The bill also extends the window for the FCC to catch and take civil enforcement action against intentional violations to three years after a robocall is placed, instead of only one year. Furthermore, the bill brings together several federal agencies as well as state attorneys general and other non-federal entities to identify and report to Congress on improving deterrence and criminal prosecution of robocall scams. The bill also requires providers of voice services to adopt call authentication technologies to enable telephone carriers to verify that calls are legitimate before they reach consumers phones. Finally, the bill directs the FCC to initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from callers using unauthenticated numbers.  A copy of the TRACED Act is located HERE.

Senator Thune’s statement regarding the TRACED Act is located HERE  and Senator Markey’s statement is HERE .  We will continue to monitor the status of the TRACED Act and report back with updates.

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