February 26, 2021

Recent News

Per TRACED Act, FCC Reexamines TCPA Exemption Requirements, Imposes Numerical Limits on Exempt Calls to Residential Lines

On December 30, 2020 the FCC released a Report and Order issuing guidance on TCPA exemption requirements.  Section 227(b) of the TCPA regulates calls made using artificial/prerecorded voice messages and/or automatic dialing systems.   Section 8 of the TRACED Act directs the FCC to impose certain requirements on exemptions granted pursuant to section 227(b).  The FCC released a TRACED Act NPRM in October, 2020 addressing and seeking comment on exemption requirements (see our coverage of the NPRM in the October 2020 TCPA Tracker).  The December 2020 Report and Order continues the discussion and implements several of the proposals.  Most notably, the new order sets limits on the number of artificial or prerecorded voice calls that can be made to a residential line without prior consent.  The order also provides for an “opt-out requirement” to “empower consumers to stop unwanted calls made pursuant to an exemption.”  The Commission retained exemptions it adopted for calls to mobile phones, which already contained numerical limits on the number of calls (as well as other requirements).  These exemptions, previously adopted by order, are not codified in the FCC’s rules.  

FCC Updates Congress on Efforts to Create Reassigned Numbers Database

On December 8, 2020 the FCC’s Consumer Governmental Affairs Bureau submitted a Report to Congress on the status of the proposed “reassigned numbers database” (RND), a project authorized by the FCC in 2018, the purpose of which is to “prevent consumers from receiving unwanted calls intended for someone who previously held their number.”  According to the Report, “Once operational, the Database will provide comprehensive and timely information to enable callers to avoid making calls to reassigned numbers,” and will therefore “reduce the risk of litigation and TCPA liability to legitimate business callers that query the Database prior to making a call.”  As directed by Congress, the Report provides a detailed status update on the development of the RND and includes information regarding cost, funding, and data requirements.  The Report also notes that SomosGov, Inc. has been contracted to develop the RND.  The FCC hopes to see the Database operational as early as June 2021.

FCC Announces Dismissal of Nine TCPA Preemption Petitions

On December 17, 2020 the Consumer and Government Affairs Bureau released a Public Notice announcing the dismissal of nine petitions for preemption of state consumer protection requirements addressing unwanted robocalls and faxes.  In September 2020 the Bureau provided notice of its intent to dismiss ten pending petitions filed between 2003 and 2005, and offered petitioners the opportunity to object.  Nine of the petitioners declined to object, and thus those petitions were dismissed.  The Bureau justifies the dismissals in the December 2020 Notice: “In the absence of any objections and in light of both federal and state regulatory changes that have occurred since those petitions were filed, we continue to believe that the relief sought in these nine petitions is moot or otherwise no longer relevant, and we therefore dismiss those petitions with prejudice.”

Trade Associations Allege Error in December 2020 TCPA Order

The American Bankers Association and various other trade associations met with members of the FCC’s Consumer Governmental Affairs Bureau via telephone to discuss a so-called “error” in the December 30, 2020 Report and Order.  According to the Associations, the FCC inadvertently imposed a prior written consent requirement on informational prerecorded/artificial voice calls to residential numbers made outside of the Informational Calls Exemption.  In a Notice of Ex Parte filed on January 27, 2021 the Associations briefly outline their interpretation of the alleged error and suggestions for remedy.  The Associations have asked the Commission to issue an Erratum to clearly establish that “prior express consent” is sufficient level of consent for the aforementioned type of calls.

 

FCC Petitions Tracker

Kelley Drye’s Communications group prepares a comprehensive summary of pending petitions and FCC actions relating to the scope and interpretation of the TCPA.

Number of Petitions Pending

  • 29 petitions pending
  • 1 petition for reconsideration of the rules to implement the government debt collection exemption
  • 1 application for review of the decision to deny a request for an exemption of the prior express consent requirement of the TCPA for “mortgage servicing calls”
  • 1 request for reconsideration of the 10/14/16 waiver of the prior express written consent rule granted to 7 petitioners

New Petitions Filed
  • Broadnet Teleservices Petition for Reconsideration
  • On January 13, 2021 Broadnet Teleservices LLC filed a Petition for Reconsideration addressing FCC’s December 2020 Order on Reconsideration.  As outlined in Decisions Released, the Order grants certain protections to the federal government and state governments, but does not extend these protections to local governments.  The Broadnet Petition asks the Commission to reconsider the decision, arguing that the omission is contrary to both judicial precedents and to the legislative history of the TCPA. 
  • Broadnet asserts that local governments need not be “sovereign” to be excluded from the definition of “person” under the TCPA.  The Petition references the decision in Barr v. American Association of Political Consultants, maintaining that “for the same reason the Supreme Court determined that the TCPA does not apply to the federal government—a determination made with no mention of ‘sovereign’ status, only the text of the statue—the TCPA is also best understood as not applying to any other levels of government.”  Broadnet also suggests that the FCC should consider the precedents of potentially analogous legislation such as the Electronic Communications Privacy Act, which was passed only five years before the TCPA.  According to the Petition, the ECPA “shares the foundational privacy and consumer protection goals as the TCPA” and, despite including broader language, “has been held to ‘unequivocally exclude local governmental entities from [the statutory] definition of person.’”
  • In regards to the legislative history of the TCPA, the Petition touches on the origin of the TCPA and notes the clear focus on telemarketing and solicitation.  Broadnet argues that this focus “illustrates that the rpose of the TCPA was not to impede communications between citizens and their government.”  As for present day concerns, Broadnet reminds the Commission that local governments have been instrumental in the fight against both COVID-19 and disinformation in the political process.  Therefore “connectivity with our local governments promote the very public goods (i.e., health and safety) that motivate Congress to act.”


Upcoming Comments
  • None
Decisions Released


Order on Reconsideration of the Broadnet Teleservices Order (2016)
 
  • On December 9, 2020, the FCC’s Consumer and Government Affairs Bureau issued an Order on Reconsideration of the Broadnet Declaratory Ruling.  In 2016, in the Broadnet Declaratory Ruling, the Bureau ruled that, “the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business.”  The relevant statute, section 227(b)(1) of the Communication Act, uses the word “person” to refer to the subject of the prohibitions.  In this instance, the Bureau’s definition of “person” excludes both the federal government and contractors acting as agents of the federal government, thereby excluding them from the statutory prohibitions against auto-dialed calls.  The National Consumer Law Center (NCLC) and the Professional Services Council (PSC) raised objections to the Broadnet Ruling in separate petitions.
  • The (NCLC), filing on behalf of various legal aid programs and public interest organizations, challenged the Bureau’s interpretation of the statute and asserted that legal precedent supported broadening the definition of “person” to include federal contractors.  Its petition states, “The text and structure of the TCPA make clear that government contractors are subject to the law’s prohibitions, even when they are acting as agents of the government.”  The supporting argument includes references to the Budget Act Amendments, Chapter 5 of the Communications Act, and the Supreme Court’s ruling in Campbell-Ewald v. Gomez.  Additionally, the NCLC claimed that the Bureau’s decision is “unquestionably at odds with Congress’s intent of protecting consumers from violation of their privacy rights and from the economic costs imposed by unwanted calls and faxes.”
  • Unlike the NCLC, the PSC supported the Bureau’s decision to narrow the definition of the word “person” to exclude government contractors.  The PSC instead objected to the “imposition of an agency requirement” asserting that “government contracts often contain language that expressly states the government contractor is not in an agency relationship with the government.  According to the PSC, requiring government contractors acting on behalf of the federal government to also be in an official agency relationship with the government “limits the use of cost-effective communications technology by federal government agencies.”  The petition maintains that the Bureau sought to prevent such obstructions. 
  • The CGB addressed both petitions in its Order on Reconsideration. Granting in part the NCLC Petition and reversing in part the Broadnet Declaratory Ruling, the CGB found that “section 227(b)(1) applies to federal contractors as ‘person[s],’ even when they are acting as agents of the federal government” thus contractors are now “covered by the TCPA’s requirements even though the federal government is not.” 
  • In the 2016 Broadnet Declaratory Ruling, the Bureau did not address how the TCPA might apply to state and local government calls. Revisiting the issue, the Bureau decided to extend the immunity to state governments but not to local governments.  State governments, as sovereign entities, benefit from the same reasoning used to exempt the federal government.  Local governments are not considered sovereign entities, and as such are included in the definition of “person.”  The Bureau also noted that “if Congress had wanted to subject state governments to the TCPA, it could have done so by expressly defining “person” to include state governments.”  In dissenting statements, Commissioner Jessica Rosenworcel and Commissioner Geoffrey Starks objected to this logic, arguing that given the absence of clear statutory language, the interpretation was overly presumptuous.  Commissioners Rosenworcel and Starks both believed that with regard to extending immunity to state governments, the Bureau should prioritize protecting the consumer from potentially unwanted robocalls.
 
NorthStar Alarm Services LLC and Yodel Technologies LLC Declaratory Ruling & Order
 
  • On December 18, 2020 the FCC’s Consumer and Governmental Affairs Bureau issued a Declaratory Ruling and Order confirming the applicability of the TCPA to the use of soundboard technology and denying a request for a retroactive waiver.  Petitioners, NorthStar Alarm Services LLC (NorthStar) and Yodel Technologies LLC (Yodel), sought to establish that calls using soundboard technology are distinct from calls using artificial/prerecorded voice messages, and are therefore not prohibited by section 227(b)(1)(B) of the TCPA.  Additionally, Yodel requested a retroactive waiver of liability for its use of soundboard technology prior to May 12, 2017, asserting that it was used “in a manner that appeared perfectly legal at the time the calls were made”  based on “the good faith belief that this technology did not constitute the use of a prerecorded call.”
  • Soundboard technology refers to “calls using audio clips specifically selected and presented by human operators in real-time.” In its petition, NorthStar reasons that because soundboard technology relies on human intervention throughout the duration of the call, and because the calls do not contain a singular message, they are sufficiently distinct from other prerecorded calls and should be governed as such.  Yodel makes a similar argument, adding that calls made using soundboard technology are not “wholly recorded calls” because the consumer maintains the ability to interact with the caller.  According to Yodel, “the FCC’s guidance under the TCPA has long suggested only calls which are entirely prerecorded and lack any human interaction trigger statutory coverage.”
  • The Bureau rejected these arguments.  The ruling states, “The TCPA applies to any telephone call to a residential telephone line initiated using an artificial or prerecorded message.  If such a call is initiated using an artificial or prerecorded voice message—whether made using soundboard technology or otherwise—the caller must obtain the called party’s prior express consent for such a call unless and exemption applies.”  The presence of a human operator does not change the fact that calls made using soundboard technology contain prerecorded voice messages, and “nowhere does the TCPA text exempt calls where a human selects a prerecorded message for the called party.”  The ruling also cites a FTC staff opinion on the applicability of its Telemarketing Sales Rule to soundboard technology, which, based on consumer complaints and press reports, found that soundboard technology “does not represent a normal, continuous, two-way conversation.”  In regard to Yodel’s waiver request, the Bureau concluded that waiving the rules would not serve the public interest and would undermine a policy objectives.

Click here to see the full FCC Petitions Tracker.

 

Cases of Note

Eleventh Circuit Affirms That One Ringless Voicemail Does Not Confer Standing

The Eleventh Circuit Court of Appeals has affirmed the Southern District of Florida’s dismissal of TCPA claims, holding that “despite what might be seen as a technical violation of the statute” plaintiff had suffered “no concrete injury” and therefore lacked standing, a prerequisite for a federal court to hear a claim.

In Grigorian v. FCA US LLC, plaintiff alleged that she, along with over 89,000 putative class members, received a prerecorded voicemail advertising a $1,000 cash bonus for purchases of a new 2018 Chrysler Pacifica Hybrid.  The voicemail was sent using technology that bypasses the recipient’s ability to block or answer the call, automatically depositing the message in the recipient’s voice mailbox.  After holding a hearing on the question of standing, the district court determined that plaintiff was unable to establish that she suffered an injury in fact, and entered an order dismissing the case.  Plaintiff appealed to the Eleventh Circuit.

To establish an injury-in-fact to satisfy Article III’s standing requirement, a plaintiff must show that she “suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” The Eleventh Circuit previously determined, in Salcedo v. Hanna, that an individual who has received a single unsolicited text message does not suffer a concrete injury because such a text does not render the receiving device unavailable to receive legitimate calls or messages.  Without rendering a plaintiff’s device unavailable, a plaintiff’s mere personal loss of time in reviewing the offending message was found to be insufficient to incur standing. Relying on these principles, the Court determined that the plaintiff in Grigorian failed to allege a concrete injury, as required to maintain standing, and affirmed dismissal. 

Grigorian v. FCA US LLC, No. 19-15026, 2020 WL 7238392, -- Fed. Appx. ---- (11th Cir. 2020).

District Court Dismisses Complaint and Compels Arbitration

In Patrick v. Comcast Cable Communications, LLC, the District Court for the Southern District of Texas granted the defendants’ motion to compel because it found that the plaintiff’s TCPA claims fell within the scope of a valid and binding arbitration agreement.

In Patrick, plaintiff opened an account with defendants for telecommunication services in February 2012.  As a part of the installation process, plaintiff received a subscriber agreement, which contained an arbitration agreement (the “Agreement”) pursuant to the American Arbitration Association rules.  The Agreement required arbitration of “any dispute, claim, or controversy between [plaintiff] and [defendant] regarding any aspect of your relationship with [defendant]”.  Additionally, the Agreement mandated that the term “dispute” was “to be given the broadest possible meaning that will be enforced” and delegated the resolution of any dispute over the validity, enforceability, or scope of the arbitration agreement to the arbitrator. The Agreement allowed plaintiff to opt out of arbitration within thirty days of account activation. Plaintiff, however, did not opt out.

Plaintiff canceled her account with defendant in July 2020.  That same month, Plaintiff asserted the instant claim against defendant, alleging that within that year defendant began to place automated calls to her cell phone without the necessary level of consent.  Defendant filed a motion to compel arbitration, contending that the action must be dismissed and compelled to arbitration because plaintiff had entered a binding arbitration agreement.  Plaintiff did not dispute the validity of the agreement to arbitrate nor did she dispute that the arbitrator should decide the scope of arbitrable claims under the Agreement. Thus, the court granted the motion because it reasoned that Fifth Circuit precedent compelled it to grant arbitration when: (1) there is a valid agreement to arbitrate; and (2) the agreement delegates the issue of arbitrability to the arbitrator.

Patrick v. Comcast Cable Communications, LLC, No. CV H-20-2352, 2021 WL 75770 (S.D. Tex. Jan. 8, 2021)

Emerging Division in District Courts: Did AAPC Invalidate TCPA Claims for Calls Made Between 2015-2020?

As you may recall, the Supreme Court decided AAPC in July 2020, and held that the TCPA’s government debt exception (which was added in 2015) was unconstitutional, severing it from the TCPA. We have previously reported on two cases, Creasy and Lindenbaum, which held AAPC precluded federal courts from retaining jurisdiction over robocall claims arising between November 2015 and July 6, 2020—during the time that the government debt exception was part of the law.  Now, a third court has joined Creasy and Lindenbaum.

Four additional courts, however, have come down on the other side of this issue and a split is heating up between – and within – the district courts.  In addition, plaintiff in Lindenbaum has appealed to the Sixth Circuit and briefing on the appeal is underway.  This is another TCPA issue that could reach the Supreme Court.

Court follows Creasy and Lindenbaum: holds that TCPA was unconstitutional between
November 2015 and July 6, 2020.                                                                                       


In Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., the Middle District of Florida dismissed a TCPA complaint because it determined that at the time the alleged calls were made, the TCPA was an unconstitutional content-based restriction on speech.  Thus, the court lacked subject matter jurisdiction to adjudicate plaintiff’s claims. 

Plaintiff alleged that from January 2019 to October 2019, she received approximately fifteen calls and voicemails from the defendant with pre-recorded messages to her cellular phone.  The defendant telemarketer moved to dismiss the plaintiff’s complaint because the TCPA was unenforceable at the time the calls were made to Plaintiff. The court agreed. Relying on Lindenbaum and Creasy, the court ruled that the Supreme Court’s severance of the government debt exception applied prospectively, thus the entire TCPA was unconstitutional during the time the government debt exception was effective.  Finding that it lacked the authority to enforce an unconstitutional statute, the court dismissed the plaintiff’s complaint.

Notwithstanding Hussain, a different judge sitting in the same district held on the same day that AAPC mandated the opposite. See Abramson, below.

Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., No. 5:20-CV-38-OC-30PRL, 2020 WL 7346536 (M.D. Fla. Dec. 11, 2020)

Four Decisions Reject Creasy and Lindenbaum                                                                     

In three separate decisions, the Eastern and Central Districts of California have denied motions to dismiss, permitting TCPA claims that arose in 2019, while the government debt exception was operative, to proceed. The Middle District of Florida – the same district that issued Hussain’s ruling – held the same.

In Stoutt v. Travis Credit Union, the court denied the defendant’s motion for judgment on the pleadings because it reasoned that the ATDS provision of the TCPA, without the government debt exception, was enforceable between November 2015 and July 6, 2020. Plaintiff had alleged that defendant used an ATDS to call her cell phone at least 18 times between January 24, 2019 and February 26, 2020. The defendant moved to dismiss, arguing that the court lacked subject matter jurisdiction over plaintiff’s claim following the Supreme Court's ruling in AAPC.

The court rejected the defendant’s argument.  The court reasoned that holding the entirety of the ATDS ban to be ineffective as to calls made between 2015 and 2020 would improperly construe AAPC as having invalidated the entirety of the ATDS provision, rather than just the government-debt exception, and thus would undermine the Court’s central purpose in severing the statute.  The court further reasoned that Supreme Court precedent dictated that, when Congress added an unconstitutional amendment to a prior law, the court must treat the original, pre-amendment statute as valid.  Thus, the court held that it retained subject matter jurisdiction over plaintiff’s claim.

The Central District of California reached similar decisions in Trujillo v. Free Energy and Shen v. Tricolor California Auto Grp., LLC. In Trujillo, the court denied the defendant’s motion for judgment on the pleadings advancing a similar argue as the defendant in Stoutt.  There the court reasoned that AAPC plurality’s reasoning and the Ninth Circuit’s binding decision in Duguid both indicate that the robocall statute remains enforceable, at least against non-government-debt collectors, as to calls made between 2015 and 2020.

Likewise, in Shen v. Tricolor California Auto Grp., LLC, the court denied the defendant’s motion to dismiss which proffered a similar argument as the Trujillo and Stout defendants.  The court rejected the defendant’s argument, reasoning that defendant’s analysis is at odds with the views of a majority of the Supreme Court's Justices in AAPC and Ninth Circuit precedent.  The court asserted that that a majority of Justices and the Ninth Circuit adhered to a limited view of severance, which invalidates and severs unconstitutional portions of statutes rather than invalidating entire statutes. 

In stark contrast to the Middle District of Florida’s holding in Hussain, a different judge in the same district on the same day ruled that it could hear TCPA claims that arose in 2019, before the government debt exception was struck. In Abramson v. Federal Insurance Co., the court denied defendant’s motion to dismiss, reasoning that “the vast majority of cases this Court has reviewed conclude that parties may continue to bring claims under the portions of § 227(b) unaltered by AAPC.” Finding those cases persuasive, the court denied defendant’s motion for summary judgement for lack of subject matter jurisdiction.

Stoutt v. Travis Credit Union, No. 2:20-CV-01280 WBS AC, 2021 WL 99636 (E.D. Cal. Jan. 12, 2021)

Trujillo v. Free Energy, 9-cv-02072-MCS-SP, Doc. No. 76 (C.D. Cal. Dec. 21, 2020) (unpublished)

Shen v. Tricolor California Auto Grp., LLC, No. CV 20-7419 PA (AGRX), 2020 WL 7705888 (C.D. Cal. Dec. 17, 2020)

Abramson v. Fed. Ins. Co., No. 19-2523, 2020 WL 7318953 (M.D. Fla. Dec. 11, 2020)

District Court Modifies Class Definition Based on FCC Ruling Concerning E-Faxes

In True Health Chiropractic v. McKesson, the Northern District of California certified a subclass of individuals who allegedly received online faxes over the defendant’s objection that the court lacks jurisdiction over those individuals. The defendant argued that the FCC’s ruling in AmeriFactors, previously discussed in Kelley Drye’s FCC Petitions Tracker here, took e-faxes wholly outside of the ambit of the TCPA. The court agreed that under AmeriFactors, “those who received faxes via an online fax service have different legal rights than those who received faxes via a traditional physical fax machine,” but that nonetheless, certification was warranted to identify digital vs. physical recipients. Therefore, the court certified the class, but with the intent of dismissing the claims of online fax recipients in the future.

Underlying McKesson are complicated questions of an executive agency’s authority to interpret statutes. In AmeriFactors, the FCC held that an unwanted e-fax did not cause the same types of harms that Congress was seeking to address when it passed the TCPA: it did not tie up a fax line, nor did it incur charges on behalf of the recipient in the form of wasted ink and paper. AmeriFactors has therefore sparked a debate about the Hobbs Act, a law that limits judicial review of FCC “final orders” to the Courts of Appeals. Defendants accused of sending e-faxes argue that AmeriFactors rule is a “final order,” and pursuant to the Hobbs Act, a plaintiff must challenge this FCC ruling in a Court of Appeals, and cannot argue in district court – where TCPA claims are brought – that the FCC erred. Thus, the McKesson defendants argued, based on AmeriFactors, that plaintiffs were barred from bringing TCPA claims based on the offending e-faxes.

The question of whether the Hobbs Act deprives a district court of jurisdiction to review an FCC order was addressed, but not resolved, by the Supreme Court in PDR Network. A prior article discussing that ruling can be found here. The Supreme Court ultimately side stepped the core issues presented here, reciting a litany of things that the Court of Appeals would need to assess before the Supreme Court could determine the extent to which an FCC order would bind the lower courts. 

The McKesson court, therefore, found that, without binding precedent from the Supreme Court, it was bound by its own circuit’s precedent, which required it to apply the AmeriFactors order because it “determine[d] rights and [gave] rise to legal consequences.”

The court’s ruling tees up a future entry of summary judgment against the e-fax recipients: “[u]nder Amerifactors, it appears that the Online Fax Service subclass has no cause of action as a matter of law, and is subject to a grant of summary judgment as a matter of law.” Nonetheless, the Court certified the subclass anyway, finding it in the class members’ best interest to provide them with full notice regarding the division of subclasses and the subclasses’ distinctive legal rights.

True Health Chiropractic Inc. v. McKesson Corp., No. 13-cv-02219-HSG, 2020 WL 7664484 (N.D. Cal. Dec. 24, 2020).

Court Enters Summary Judgment, Finding Defendant’s Policies Prohibited Liability for Unsolicited Calls Made by its Vendor

The Northern District of Georgia has dismissed TCPA claims against Defendant DirecTV, finding that the broadcast provider’s telemarketing policies prohibited the types of calls that spurred the suit; thus, it could not be held vicariously liable for its vendor’s calls. 

In Cordoba v. DirecTV, plaintiff consumer alleged that Defendant DirecTV engaged a third-party telemarketing provider (the “Telemarketer”) and ratified its marketing activities. Plaintiff argued that made DirecTV vicariously liable for the Telemarketer’s calls.  The Telemarketer allegedly placed nearly 17,000 calls without any internal do-not-call procedures in place and made over 900 calls to individuals on the National Do Not Call Registry. Plaintiff did not allege that DirecTV placed any calls itself.

During fact discovery, DirecTV produced evidence that its policies prohibited its telemarketers from placing the calls alleged in the Complaint. Further, DirecTV had issued policy statements specifically reminding the Telemarketer of its policies. It also produced evidence showing that it enforced those policies against the Telemarketer, following up on complaints from DirecTV customers with the Telemarketer and seeking assurances that the Telemarketer would “discontinue all cold calling sales tactics.” The Court held that DirecTV’s evidence showed that the Telemarketer did not have actual or apparent authority to place the complained-of calls, nor did DirecTV ratify the calls. Therefore, DirecTV was not vicariously liable for the calls placed by the Telemarketer, and the Court summarily dismissed the claims against it.  

Cordoba v. DirecTV LLC, No. 1:15-cv-03755, Dkt. No. 235 (N.D. Ga. Feb. 12, 2021).

Court Permits Fraud Counterclaims Against Repeat TCPA Plaintiff to Proceed

In the Eastern District of Texas, the Court will permit a TCPA defendant to proceed with its counterclaim allegations of fraud against a pro se plaintiff. The Court denied Plaintiff’s motion to dismiss the counterclaims against him, permitting the case to proceed to discovery. In Cunningham v. USA Auto Protection, Plaintiff alleged that Defendant placed at least 24 calls to Plaintiff’s cell phone without his consent. Defendant asserted 3 counter-claims of fraud, alleging that Plaintiff is a “professional litigant” who manufactured the lawsuit. Indeed, the Court identified 130 TCPA cases that Plaintiff had filed since 2015.

Specifically, Defendant alleged that Plaintiff filled out Defendant’s opt-in form with his phone number but otherwise false information, using a VPN to mask his IP address. Defendant further alleged that Plaintiff called Defendant 29 times in order to bait additional calls and “drive up the call count” to increase his alleged TCPA damages. Defendant also alleged a separate theory of “fraud by nondisclosure,” arguing that Plaintiff owed Defendant a duty to disclose his desire to not receive its calls. By submitting the opt-in form, affirmatively calling Defendant, and failing to opt-out of Defendant’s calls, Plaintiff allegedly violated those duties.

After reciting the elements for common law fraud and fraud by nondisclosure in Texas, the Court found that Defendant’s counterclaims were adequately plead and denied Plaintiff’s motion to dismiss.

Cunningham v. USA Auto Protection, LLC, No. 4:20-cv-142, 2021 WL 434243 (E.D. Tex. Jan. 8, 2021).

Fax Class Certified Despite No Proof of Fax Transmissions.

The Western District of Michigan has certified a class in a fax case despite no internal records to ascertain class members. Plaintiff filed suit in 2015 after having received a single fax transmission. Defendant argued that two things primarily precluded class certification: (1) individualized issues of consent, and (2) a lack of records, such as evidence showing fax transmissions, rendered the class unascertainable. Neither argument was successful and a consumer class was certified. 

First, the Court rejected the individualized consent issues argument, finding that it could be determined at a class level. Defendant argued that it never purchased “fax lists” and had an (unwritten) company policy to only send faxes to potential customers who provided a fax number to a sales representative. During discovery, Defendant had produced documents totaling only four pages; however, Plaintiffs also obtained by third-party subpoena an “opt-out” list and invoices showing that defendant had paid a fax transmission service roughly $13,5000 to send over 465,000 faxed pages, corresponding to an assumed 232,879 two-page faxes. Stating that it “ha[d] difficulty of accepting” that Defendant had obtained all the fax numbers via cold calling, the Court held that Plaintiffs had met their burden of showing class questions predominated.

Second, the Court found that the Plaintiffs produced sufficient evidence to show that a class could be ascertained; however, the Court left open the possibility that it “may revisit” the question as the case proceeds.  Defendant argued that the lack of internal records identifying potential class members rendered the proposed class “not ascertainable.” Plaintiff proposed two classes: (a) individuals on the opt-out list; and (b) individuals who received a fax from Defendant on dates certain. The Court agreed with Defendant that Class B was not ascertainable: because no fax records existed, the only way to identify class members was by “review[ing] 232,879 affidavits certifying that an individual received [a] fax on [a] specific date.” Further, there was no way to verify those affidavits. Class A, however, was ascertainable since any affidavit submitted could be cross-referenced against the opt-out list.  

Vandenberg & Sons Furniture, Inc. v. Alliance Funding Group, No. 1:15-cv-1255, 2021 WL 222171 (W.D. Mich. Jan. 22, 2021).