October 9, 2017

Recent News

None

 

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

  • Credit Union National Association – requesting that the Commission create an “established business relationship” exemption and/or exemption for calls and texts that are without charge to the called party that is applicable to credit union calls to members’ wireless phones. (Filed 9/29/17)
     

Upcoming Comments

  • Credit Union National Association – requesting that the Commission create an “established business relationship” exemption and/or exemption for calls and texts that are without charge to the called party that is applicable to credit union calls to members’ wireless phones. (Comments due 11/6/17; Replies due 11/21/17)

*Note: Although the most recent “ringless voicemail” petition was withdrawn in June 2017, the FCC continues to receive consumer comments opposed to exempting such services from the TCPA.


Decisions Released

  • None
     

 Click here to see the full FCC Petitions Tracker.

 

Cases of Note

Update: Amicus Brief Filed In Support of Lakers’ TCPA-Related Insurance Coverage Loss

In September, we reported that the Ninth Circuit affirmed a Central District of California court’s decision to dismiss a lawsuit against Federal Insurance Co., in which the Los Angeles Lakers alleged that the insurance company breached its policy and the implied covenant of good faith and fair dealing when it failed to defend the Lakers against or cover a plaintiff’s TCPA complaint. See L.A. Lakers Inc. v. Fed. Ins. Co., No. 15-55777 (9th Cir. Aug. 23, 2017).  The Ninth Circuit found that the underlying lawsuit against the Lakers was barred from coverage based on an invasion-of-privacy exclusion in the insurance policy.

The Ninth Circuit’s decision could have an impact on other D&O insurance coverage disputes stemming from whether an insurer is obligated to defend or indemnify a policyholder subject to TCPA litigation.  Because the judges on the panel were not unanimous, the Lakers filed a petition for en banc review on September 6, and the panel has requested that Federal Insurance file a response.

On September 18, 2017, the nonprofit group United Policyholders filed an amicus brief in support of the basketball team, asserting that the Ninth Circuit majority applied an overly broad interpretation of the purported invasion-of-privacy exclusion.  According to the amicus brief, because there was no explicit TCPA liability exclusion in the policy (as other insurers have done), Federal Insurance could not deny coverage.  Instead, Federal Insurance is attempting to use the invasion-of-privacy exclusion to deny coverage for a TCPA claim which is only “incidentally related” to invasion of privacy, United Policyholders contended.

We will continue to update the en banc review as new details develop.
 

Eastern District of Missouri Reduces Statutory Damages Award By 98 Percent
 

Defendants in Golan v. Veritas Entm’t LLC, No. 14-0069, 2017 WL 3923162, at *4 (E.D. Mo. Sept. 7, 2017) must pay $32.4 million in damages as a result of making pre-recorded calls for a marketing campaign affiliated with the 2012 movie Last Ounce of Courage – but their TCPA liability could have been far worse.

At the close of an August 2017 trial, the court entered judgment as a matter of law in favor of plaintiffs.  The court found that defendants made more than 3.2 million phone calls in promoting the film, with the calls featuring an endorsement by Governor Mike Huckabee.  When a recipient answered the call, a pre-recoded speech by Governor Huckabee discussed themes such as “freedom” and “liberty” and then asked if the recipient wanted to hear more about the movie.  If the answer was yes, then a second summary was played.  If no one answered the call, a vague message espousing the theme of “liberty” was left on the recipient’s voice mail.

Because each call was subject to statutory damages of $500, defendants could have been liable for an award of more than $1.62 billion.  However, after judgment was entered for plaintiffs, defendants filed a motion for reduction of excessive damages.  The court found in defendants’ favor, reasoning that a $1.62 billion damages award would be “wholly disproportionate to the offense.” 

Instead, the court determined that lowering the statutory penalty to $10 per phone call – for a total award of more than $32 million – reflected “the severity of the offense” and also respected that the purpose of the TCPA is to have a “deterrent effect and to account for unquantifiable loss including the invasions of privacy, unwanted interruptions and disruptions at home, and the wasted time spent answering unwanted solicitation calls or unwanted voice messages.”  Id. at *4.


Spectrum, Other Private Companies Challenge TCPA’s Favoring of Government-Sent Messages on Constitutional Grounds

In defending itself against a proposed TCPA class action, Spectrum asked for judgment on the pleadings in contending that a recent amendment to the Telephone Consumer Protection Act is an unconstitutional speaker-based restriction on speech.

In Steven Gallion v. Charter Communications, Inc., 5:17-cv-01361 (C.D. Cal.), the defendant, which does business as Spectrum, faces a proposed class action accusing it of placing pre-recorded voice robocalls through an automatic telephone dialing system.  The call directed recipients to stay on the line for more information about pricing promotions, but the named plaintiff asserted he had never consented to receive such calls from the company.  The lawsuit was filed on July 6, 2017.

In its motion for judgment on the pleadings, filed on September 26, Spectrum contended that Section 227(b)(1)(A)(iii) serves as a facial content-based restriction on speech.  According to the defendant, the amendment thus expresses a content-based preference for government messages over other private messages – a distinction which is unconstitutional and thus cannot lead to TCPA liability for the calls at issue in the lawsuit. Spectrum concluded that because the statute cannot survive strict scrutiny, the claims against it must fail as a matter of law.

Spectrum is not the only defendant which has relied on constitutional defenses to the TCPA.  Time Warner Cable recently asked the Southern District of New York for permission to seek Second Circuit review of a decision that denied the company’s challenge to the TCPA on similar constitutional grounds in the case of Mejia v. Time Warner Cable, Inc., Case No. 1:15-cv-06445 (S.D.N.Y.) [Doc. No. 156].  Time Warner Cable contended that the question of whether the TCPA violates the First Amendment by favoring government-sent messages while punishing private companies which send similar messages should be certified for interlocutory review.