TCPA Tracker - April 2019
On April 4, 2019, U.S. Secretary of Commerce, Wilbur Ross, sent a letter to FCC Chairman Ajit Pai expressing opposition to two Petitions for Reconsideration of the Commission’s Broadnet Declaratory Ruling, on behalf of the U.S. Department of Commerce and the U.S. Census Bureau. The letter argues that the FCC correctly decided, and should not reverse, its determination in the 2016 declaratory ruling that Federal agencies and contractors acting on behalf of Federal agencies are not “persons” subject to the TCPA.
The letter claims that, were the FCC to reverse its decision, it would adversely affect the ability of Federal agencies to perform critical missions and would increase the cost of business for the Government and taxpayers. The letter states that Congress has directed the Census Bureau to leverage technology to complete the 2020 Census and that it intends to contract with telephone call centers to make calls to landline and wireless phones to collect data for the census. If the Commission reverses the decision, it will jeopardize the completeness and quality of the 2020 Census and would costs taxpayers $20 million, according to the letter.
Alternatively, if the FCC does reverse its declaratory ruling, the letter asserts that calls made by the Census Bureau and its contractors would not violate the TCPA, and it asks the Commission to state that clarification. Specifically, the letter contends that the Census Bureau plans to use contractors to make outbound calls that will allow the bureau to correct missing or inconsistent information using live agents—not autodialers—and calling specific numbers provided by respondents to the Census Bureau staff.
The Commission sought renewed comment on the petitions on May 14, 2018, following the DC Circuit’s opinion in ACA International v. FCC, invalidating certain parts of the FCC’s 2015 TCPA Declaratory Ruling and Order. Comments were due on June 13, 2018, and reply comments on June 28, 2018, but the FCC has not indicated when it expects to rule on the petitions.
On April 3, 2019, the Senate Commerce, Science and Transportation Committee advanced S.151–The TRACED Act, a bill sponsored by Senators Thune and Markey, in an effort to combat robocalls. The bill would enhance the FCC’s enforcement powers as it relates to violations of the TCPA and require adoption of call authentication technologies. Specifically, the bill would:
- Allow the FCC to levy civil penalties of up to $10,000 for intentional violations of the TCPA.
- Allow the FCC to pursue enforcement actions against violators for a period of three years instead of the one year allowed under current law.
- Require that voice service providers adopt technologies that allow telephone carriers to verify incoming calls as legitimate.
In addition to the above items, the legislation directs the FCC to begin a rule making that will protect individuals from unwanted calls or texts from an unauthenticated number.
This effort by the Senate is a first step in response to an issue that has been gaining momentum over the last couple of years. The legislation next will be considered by the Senate at a date to be determined. At this time, no companion version has been introduced in the House.
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
- 31 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
- 10 applications for review of fax waiver orders under the Anda progeny (these applications for review were not addressed in the Nov. 14, 2018 Bureau order)
- 1 application for review of the CGB order issued on 11/14/18 eliminating the opt-out language rule for solicited faxes (and 2 oppositions to the application for review)
- Akin Gump Strauss Hauer & Feld LLP – seeking a declaratory ruling that a fax broadcaster is the sole liable “sender,” when it both commits TCPA violations and engages in deception or fraud against the advertiser (or blatantly violates its contract with the advertiser) such that the advertiser cannot control the fax campaign or prevent TCPA violations
(Reply Comments due 4/23/19)
- None since January 2019 report
Click here to see the full FCC Petitions Tracker.
Cases of Note
A California federal judge has certified a nationwide class of consumers to pursue claims that a lead-generation company and a cruise company violated the Telephone Consumer Protection Act (“TCPA”) by using a prerecorded voice and/or automatic dialing system to call class members without their consent.
The plaintiffs allege that Royal Seas Cruises, Inc. (“Royal”) engaged Prospects DM (“Prospects”) to obtain and call telephone numbers to inquire whether the called party was interested in Royal’s products and, if so, to transfer the called party to a Royal representative. Plaintiffs allege that Prospects obtained the telephone numbers through third-party websites operated by digital marketing companies. Specifically, Prospects provides the name of a given customer, like Royal, to the digital marketing companies, which in turn incorporate the customer’s name into their websites. The websites generate leads by using a form through which a user can register their contact information for promotional and product information related to companies identified in the form. The form expressly indicates that checking the box including in the form constitutes consent to receive communications from one of several identified companies and organizations, whether by text or call using an automated dialer or an artificial or prerecorded voice. The form does not submit if the box is left unchecked. A lead is generated when the user completing the form checks the box and clicks the submit button. The lead information is sent to Prospects who then contacts the prospective customer to gauge their interest in Royal’s products.
Class certification primarily turned on whether individualized issues of consent among the named plaintiffs or putative class prevented common issues of law or fact from predominating. Royal and Prospects argued that issues of whether the named plaintiffs consented through the website forms predominated over common issues. The court disagreed.
The court explained that, for individualized issues of consent to predominate, the party opposing class certification must first present evidence of that consent. Royal and Prospects offered declarations from representative of each company discussing in the abstract how they believe the lead generation program should work for “consumers,” “the consumer,” “the opted-in telephone number,” “a person” or “individual users” using a website. The declarants, however, lacked personal knowledge of whether the named plaintiffs or any putative class member actually visited and completed the forms available at the websites Royal contended are the lead generation sources for the telephone numbers of the class members. Thus, the court concluded these declarations could not constitute evidence that named plaintiffs or class members provided consent before they were contacted.
Without actual evidence of prior express consent from either defendant, the court explained that class members could provide individual affidavits averring lack of consent, and the defendants would be unable to rebut with anything other than the unfounded testimony of individuals who lack personal knowledge of who visited the websites generating the leads. Indeed, the named plaintiffs submitted declarations supporting their assertions that neither defendant obtained their prior express consent, stating that they did not fill out the contact form on the third-party websites and their consent, as well as that of putative class members, had been “manufactured.” The named plaintiffs argued that their “manufactured” leads theory could be tested by comparing the number of leads generated for a particular website with the website traffic data from the servers associated with the website.
The court certified a nationwide class and subclass. The nationwide class consists of those who Prospects, on behalf of Royal, called using an automatic dialing system and/or prerecorded voice and whose telephone number is associated in Prospect’s records with either of the third-party websites associated with the named plaintiffs’ numbers. The subclass consists of those members of the class who had their call transferred to a Royal representative. The decision applies a difficult burden for defendants to meet to produce actual evidence of consent by named plaintiffs or putative class members to defeat class certification, particularly where that consent may be through a third party.
The decision is McCurley v. Royal Seas Cruises, Inc., No. 3:17-cv-00986 (S.D. Cal.), Dkt. No. 87.
In a putative class action bringing claims under the Telephone Consumer Protection Act (“TCPA”), a judge of the Southern District of Indiana recently rejected the personal jurisdiction challenge of a company whose only relevant contacts in the forum were sending text messages to forum residents marketing its properties in another state.
The plaintiff, an Ohio college student from Indiana, alleges that the defendants Grand Campus Living, Inc. (“Grand Campus”) and Aspen Heights Management Company, LLC (“Aspen Heights”) caused her—through a third-party—to receive several text messages promoting rental properties managed by Grand Campus. Both defendants moved to dismiss for lack of personal jurisdiction.
The crux of this issue was whether two text messages to a telephone number associated with the forum—only one of which was received in the forum—constituted sufficient purposeful availment of the forum. Grand Campus manages properties throughout the country but not Indiana. Both Grand Campus and Aspen Heights are incorporated and headquartered in Texas; neither has offices or employees in Indiana. The plaintiff’s telephone number was registered in Indiana and contains an Indiana area code. The plaintiff received one message while at college in Ohio and one while in Indiana—both marketing an Ohio property managed by Grand Campus.
The court granted Aspen Heights’ motion based on uncontroverted evidence that it neither had any involvement with the messages nor exercised any control of Grand Campus, who did. As to Grand Campus, however, the court retained jurisdiction. The court concluded that Grand Campus’ acts of messaging an Indiana telephone number reflected intent to market the Ohio property to out-of-state and prospective college students, including the plaintiff. Although the court acknowledged that “a text message would be a thin reed to lean on for personal jurisdiction in a typical breach-of-contract matter,” it emphasized that these messages are the subject of the action itself. That is, in a TCPA suit, a text message constitutes purposeful availment “where the text messages are themselves the gravamen of the complaint.” Because the alleged injury—receiving TCPA-violating messages—arose from Grand Campus’ forum-related activities of sending the messages to Indiana-registered telephone numbers, the court retained specific personal jurisdiction. The decision reinforces that even a small number of messages or calls may support personal jurisdiction where they form the basis of the TCPA claims, even if the defendant’s activities in general are not particularly associated with the forum.
The decision is Weiss v. Grand Campus Living, Inc., No. 1:18-cv-00434 (S.D. Ind. Mar. 14, 2019), Dkt. No. 50.
The Southern District of Florida has added to a series of recent district court decisions concluding that a “ringless voicemail” constitutes a “call” for purposes of the Telephone Consumer Protection Act (“TCPA”).
The TCPA makes it unlawful, in relevant part, “to make any call” using an automatic telephone dialing system or prerecorded voice to a “cellular telephone service.” Braman Hyundai, Inc. (“Hyundai”) moved to dismiss the putative TCPA class action targeting its use of ringless voicemails, arguing, in part, that they do not constitute “calls” within the purview of the TCPA.
Braman argued that the ringless voicemail software at issue connected directly to the telephone company’s voicemail server to directly deposit messages into the recipient mailbox without “ringing” the recipient’s telephone—bypassing any contact with the telephone subscriber. The court, adopting the reasoning of the Western District of Michigan in Saunders v. Dyck O’Neal, Inc., 319 F. Supp. 3d 907 (W.D. Mich. 2018), concluded that ringless voicemails constitute calls for TCPA purposes.
The court started with the dictionary definition of a call: “to communicate with or try to get into communication with a person by a telephone.” It noted that courts have held both prerecorded voicemail messages and text messages to be calls for TCPA purposes, which both fall within the common understanding of a call but are not specified in the TCPA’s provisions. The court also emphasized that, like prerecorded voicemail messages and text messages, ringless voicemails present the same nuisance that the TCPA was intended to prevent: the “nuisance and privacy invasion” associated with unsolicited telemarketing. The decision represents another installment in a burgeoning line of district court decisions to hold that ringless voicemail technology is subject to the TCPA.
The decision is Schaevitz v. Braman Hyundai, Inc., No. 1:17-cv-23890 (S.D. Fla. Mar. 25, 2019), Dkt. No. 62.
On April 12, 2019, the FTC announced that it has charged a telemarketing operation and its owners with making millions of illegal, unsolicited calls about educational programs to consumers who submitted their contact information to websites promising help with job searches, public benefits, and other unrelated programs.
According to the complaint issued by the FTC, defendants Day Pacer LLC, EduTrek LLC, and their owners, obtained phone numbers from websites claiming to help consumers apply to for assistance, such as health insurance, or Medicaid coverage. The complaint states that these sites misled consumers by showing the seals of credible companies or government agencies, and hiding in small print a disclosure that clicking the “submit” button to request information about the service at issue provides “consent” to receive telemarketing calls about various subjects unrelated to the service. In numerous instances, the complaint states, Defendants misled consumers into selecting “yes” in a checkbox placed directly under a question having nothing to do with obtaining consent to receive telemarketing calls.
Defendants then called the numbers submitted through these forms to give consumers information about educational programs. Defendants’ training included providing call representatives with a script that instructs them to continue marketing even if consumers have not requested the information or have stated they have no interest in vocational and postsecondary education programs. Defendants also had a specific script to instruct telemarketers on how to overcome objections from consumers who thought they were applying for help obtaining health insurance or Medicaid benefits.
In addition to the deceptive claims, the defendants were charged with violating the Telemarketing Sales Rule by initiating over five million unsolicited outbound telemarketing calls to numbers on the Do Not Call Registry since 2013, and by providing substantial assistance to other telemarketers who placed calls to numbers on the Do Not Call Registry.
The FTC is seeking to obtain a monetary civil penalty, a permanent injunction, and other relief for the Defendant’s violations of Section 5(a) of the FTC Act and the FTC’s Telemarketing Sales Rule.