TCPA Tracker-May 2017

Recent News

Class Action Plaintiffs Seek En Banc Review of D.C. Circuit Fax Advertisement Decision

On April 28, 2017, the class action plaintiff petitioners in Bais Yaakov of Spring Valley et​.al. v. FCC, No. 14-1234, sought en banc review of the D.C. Circuit Court’s decision to vacate the FCC’s October 30, 2014 Fax Advertisement Waiver Order.  The court found that the FCC’s 2006 Solicited Fax Rule was unlawful to the extent that it required opt-out notices on faxes sent with the recipient’s consent (i.e., ​“solicited” faxes), attempted to enforce the rule, and granted retroactive waivers to certain parties of the opt-out notice requirement.  In support of their request, the class action plaintiff petitioners argue primarily that the decision ​“radically conflicts with decades of the Supreme Court’s and this Court’s Chevron step one precedent” when it concluded that the FCC did not have the authority to apply its rules to solicited faxes.  They assert that this decision could have a wide-reaching effect of parties ​“flood[ing]” the court with appeals claiming that agency rules and decisions ​“are invalid simply because Congress authorized such regulations in a different context but not in that particular context, or because Congress did not specifically authorize those regulations.”  On May 5, 2017, the court issued an order requiring the class action defendant petitioners in the case to file a joint response to the request for en banc review within 15 days. Their brief will be due on Monday, May 22.

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

  • 20 (+9 seeking a retroactive waiver of the opt-out requirement for fax ads)
  • 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”
  • 3 requests for reconsideration of the 11/2/16 fax waiver in response to petitions by 22 parties
  • 1 request for reconsideration of the 10/14/16 waiver of the prior express written consent rule granted to 7 petitioners

New Petitions Filed
  • None

Upcoming Comments
  • M3 USA Corporation – seeking a declaratory ruling that certain fax transmissions (e.g. market research survey invitations) are not advertisements (Replies due 5/15/17)
  • All About the Message, LLC – seeking a declaratory ruling that the TCPA does not apply to direct-to-voicemail technology and services (Comments due 5/18/17; replies due 6/2/17)

Decisions Released
  • None

Click here to see the full FCC Petitions Tracker.

Cases of Note

Order to Transfer Venue Demonstrates the Usefulness of Terms of Use

Many of our articles on TCPA Tracker focus on what happens after a lawsuit is filed.  But what steps can businesses take to mitigate risk in the first instance?  A recent order to transfer venue demonstrates the usefulness of requiring that potential contacts agree to terms of use as a condition of being contacted.  Those terms can include protections for businesses, such as requiring that disputes be brought in a convenient forum.

In Cruz v. Quicken Loans, No. 2:17-cv-11369 (E.D. Mich.), the plaintiff filed a one-count complaint alleging that the defendant violated the TCPA by sending 319 unauthorized text messages to plaintiff’s phone using an ATDS.  The plaintiff alleged that he originally agreed to receive text messages when he applied for a mortgage, but continued to receive text messages after he attempted to opt out by replying ​“STOP” and speaking with a live operator.  The plaintiff filed the action in the Middle District of Florida where he resided.

The defendant filed a motion to transfer the case to the Eastern District of Michigan where it was headquartered.  In support of its motion, the defendant submitted evidence that the plaintiff was required to agree to defendant’s ​“Email and Mobile Policy” by clicking a check box when he initially signed up online to receive text messages.  The Policy contained a forum selection clause restricting litigation to courts in Michigan where the action arises from the ​“use of Quicken Loans Mobile Messaging.”

In granting the defendant’s motion to transfer, the court rejected plaintiff’s arguments that (1) defendant failed to prove that plaintiff signed and was bound by the Email and Mobile Policy, (2) the forum selection clause did not apply to the TCPA claims, and (3) defendant should be estopped from enforcing the forum selection clause because the plaintiff had revoked his consent to receive text messages.  The court held that defendant’s evidence showing that plaintiff had to check on a box agreeing to the Policy to sign up for messages was sufficient to establish that plaintiff agreed to and was bound by its terms.  As to the scope of the forum selection clause, the court held that plaintiff’s TCPA claims ​“surely involve Plaintiff’s use of the mobile messaging service” and thus were within the ​“use of Quicken Loans Mobile Messaging.”  Finally, the court held that “[t]he mere fact that Plaintiff alleges that he revoked consent does not preclude Quicken from looking to the Policy for purposes of the instant Motion, and therefore Quicken [is] not estopped from invoking the forum selection clause.” 

This case serves as a reminder of the usefulness of requiring potential contacts to agree to terms of use as a condition to being contacted.  While businesses would be wise to implement comprehensive compliance policies and safeguards to mitigate the risk of TCPA liability, ensuring that contacts agree to terms of use is one easy step that businesses can take in that direction.

Court Rejects Facebook’s Challenge to Constitutionality of TCPA, Stays Litigation

We previously discussed Facebook’s motion to dismiss challenging the constitutionality of the TCPA under the First Amendment in Holt v. Facebook Inc., No. 3:16-cv-02266 (N.D. Cal.).  As a refresher, Facebook filed a motion to dismiss on various grounds, including that the TCPA violates the First Amendment because it impermissibly places restrictions based on content. 

On March 9, the court rejected Facebook’s constitutional challenge.  Applying strict scrutiny on the basis that the emergency-purposes and debt-collection exceptions to TCPA are content-based, the court held that the TCPA is constitutional because it ​“furthers a compelling interest and is narrowly tailored to achieve that interest.”  Facebook had conceded that the government had a compelling interest, but argued that the TCPA was underinclusive and overinclusive.  Rejecting the underinclusive argument, the court noted that there were only two exceptions that ​“do not do ​‘appreciable damage’ to the privacy interest underlying the TCPA.”  In rebuffing Facebook’s argument that the TCPA was overinclusive, the court cited the reasoning of another court that ​“the TCPA does not restrict individuals from receiving any content they want to receive—speech that would otherwise be prohibited by the TCPA is immediately removed from the purview of the statute once express consent is provided.”

Although Facebook lost its motion to dismiss plaintiff’s TCPA claims, it succeeded on May 2 in obtaining certification from the court for an interlocutory review of the court’s order and a stay in the litigation.  Even if the Ninth Circuit does not accept Facebook’s interlocutory appeal, the stay will continue pending the D.C. Circuit’s decision in ACA International v. FCC, No. 15-1211.