TCPA Tracker for November 2023 - February 2024

Cases of Note

FCC Closes Lead Generator Loophole in New TCPA Consent Rule

On December 13, 2023, the FCC adopted new rules restricting lead generation practices in a 4-1 vote. The rules, detailed in a report and order released on December 18, require individual sellers to obtain consumers’ express written consent before soliciting their business.

The new rules require one-to-one consent under the TCPA, meaning that consumers must provide consent to one seller at a time. Sellers must provide clear and conspicuous disclosures to consumers before sending them communications.

Previously, a seller could share a consumer’s contact information with marketing partners whom the consumer could only identify by reading fine print or clicking on a hyperlink on the seller’s website. These marketing partners could then send the consumer robocalls and robotexts. The new rules prohibit this practice. Once the new rules take effect, a seller can only contact a consumer after the seller provides a clear and conspicuous disclosure and the consumer consents to communications from that particular seller.

Moreover, robocalls and robotexts must be logically and topically related to the website through which consumers provide their consent. As an example, the FCC states that if a consumer provides consent on a car loan comparison-shopping website, they do not consent to receiving robocalls and robotexts about loan consolidation.

Additionally, the rules extend the National Do-Not-Call Registry’s protections to text messages. If a consumer lists their wireless phone number on the DNC Registry, a seller may only text this consumer after obtaining their express permission.

These rules take effect either twelve months after publication in the Federal Register or 30 days after announcement in the Federal Register of the Paperwork Reduction Act, whichever is later.

FCC Issues Declaratory Ruling Classifying AI-Generated Voice Calls as Artificial” Under TCPA

On February 8, 2024, the FCC announced a unanimous adoption of a Declaratory Ruling that classifies AI-generated voices on robocalls as an artificial or pre-recorded voice” under the TCPA. This subjects calls using AI technology to generate a simulated or pre-recorded human voice to the TCPA’s prior express consent of the called party requirement.

The Declaratory Ruling also places calls using this technology under the ambit of the implementing rules in 47 CFR § 64.1200, including the requirement that the entity calling provide identification and disclosure information and specify opt-out methods if the call is an advertisement or telemarketing campaign.

The FCC’s goal is to broaden consumer protections against nefarious robocalls and to give state attorneys general new enforcement tools under the TCPA. Prior to this ruling, enforcement authorities could only target the underlying scheme perpetrated by the call and not pursue a TCPA claim for the use of the voice-imitation itself. A coalition of twenty-six state attorneys general wrote to the FCC supporting this new approach.

FCC officials noted the increasingly common use and accessibility of AI-generated voices imitating trusted individuals like celebrities and family members, which can help bad actors to perpetrate fraud and spread misinformation. Specifically, on January 23, 2024, robocall scammers used an AI-created deepfake of President Joe Biden’s voice to attempt to trick New Hampshire Primary voters to stay home from the polls. The FCC opened a joint investigation of the scheme in concert with the New Hampshire Attorney General’s Office and anticipates this ruling will provide additional enforcement methods for similar schemes going forward.

The FCC announced the Ruling on February 8, 2024, and it is effective immediately.

FCC Clarifies Standards for Revocation of Consent

On February 15, 2024, the FCC adopted a Report and Order and Further Notice of Proposed Rulemaking clarifying the ways in which consumers can revoke consent to receive robocalls and robotexts under the TCPA. The Report and Order specifies language that consumers can use to opt out of robocalls and robotexts and imposes requirements on callers to ensure compliance with these opt-out requests.

The need for clarification stems from a 2015 FCC ruling that allowed consumers to revoke their consent to receive autodialed or prerecorded calls through any reasonable method.” This ruling was followed by years of litigation seeking to determine what revocation methods would be considered reasonable.

In the new Report and Order, the FCC instructs consumers that texting the words stop,” quit,” end,” revoke,” opt out,” cancel,” or unsubscribe” constitutes revocation of consent. Consumers are not limited to these words, and may revoke their consent through alternative words or phrases. The FCC and courts will determine whether such alternative words or phrases are reasonable through a totality-of-circumstances” analysis.

Businesses may not affirmatively restrict a consumer’s right to use any reasonable means of revocation. Thus, even if a business sends a text message instructing a consumer to text STOP to end,” the consumer may still opt out of further messages by using words other than STOP.” A consumer’s revocation of consent in any reasonable manner extends to both robocalls and robotexts, regardless of the format the revocation is delivered in.

Once a consumer has opted out of further communications, a business has ten business days to honor this revocation. A business may send a single text confirming receipt of the consumer’s revocation. If this text is sent within five minutes of the consumer’s revocation, it is presumed to be within the consumer’s prior consent. If the text is sent after five minutes, the sender must show that the delay was reasonable. This confirmation text may not include any marketing material, but may seek clarification as to the scope of the consumer’s revocation. If the consumer does not respond to such a message, they are presumed to revoke consent to all further communications.

The ruling will take effect six months after publication in the Federal Register.

Failure to Plead Personal Connections to the Forum State Leads to Dismissal of Claims Against Company’s Officers

The Northern District of Texas dismissed all of Plaintiff’s TCPA claims against a lender specializing in small business loans and its CEO and CMO for want of personal jurisdiction.

Plaintiff Stephen Noviello sued Defendant iVest 360, LLC d/b/a Fast Capital 360, DTX Business Solutions (a telemarketer), as well as the CMO and former CEO of Fast Capital alleging that he received eight or nine telemarketing calls during a five-day period in April 2022 from the telemarketer on behalf of Fast Capital. After receipt, Plaintiff notified both Fast Capital and the telemarketer that he believed they had violated the TCPA: the telemarketer directly, and Fast Capital vicariously through its contract with the telemarketer.

Defendants moved to dismiss for both lack of personal jurisdiction and failure to state a claim. Because minimum contacts for personal jurisdiction must be satisfied for each defendant, and because the Plaintiff conceded the CEO and CMO were not subject to general personal jurisdiction in Texas, the Court’s analysis focused on the CEO and CMO Defendants’ purposeful direction of their activities at the forum state.

Finding that neither the individual officers nor Fast Capital held meetings, leased office space, maintained a phone number, or took business trips to Texas, the Court determined that they lacked the requisite personal connections to the forum state to support specific personal jurisdiction. Notably, the Court also credited the fact that the relationship between the telemarketer’s calls and Fast Capital’s lead sourcing was based on a blind transfer” – an arrangement where the Telemarketer did not know which calls were transferred to specific companies and Fast Capital did not know which state the telemarketer sourced the leads from.

Given these facts, the Court concluded that Plaintiff had failed to make out a prima facie case supporting personal jurisdiction over defendants because they did not purposefully establish minimum contacts with the forum state. As such, the Court dismissed Plaintiff’s claims. The Court also dismissed Plaintiff’s untimely motion for leave to amend his complaint for a fourth time.

Noviello v. iVest 360, LLC, 2023 U.S. Dist. LEXIS 231234, 2023 WL 9051707 (N.D. Tex. Dec. 1, 2023).

Texas Court Holds that Texas TBCC is Coextensive with TCPA

The Northern District of Texas dismissed a claim brought against Defendant Cyclebar Franchising, LLC under the Texas Business and Commerce Code (“TBCC”) § 305.053, which incorporates the TCPA. Plaintiff alleged that Defendant sent a text message advertising unlimited rides for only $99” to Plaintiff’s cell phone, despite the fact that Plaintiff’s phone number is on the Do-Not-Call Registry.

The Court dismissed the claim because the TCPA requires a plaintiff to plead receipt of more than one telephone” communication. The Court held that this requirement applies to the TBCC, also known as the Texas TCPA, as well. The Court explained that TBCC § 305.053 is coextensive with the TCPA, so if no violation of the TCPA exists, then there is no violation of TBCC §305.053. Since Plaintiff’s allegation of a single text message would be insufficient for a TCPA claim, it is insufficient for a TBCC claim.

Plaintiff had previously attempted to sue on the same nucleus of operative facts. As such, the Court dismissed Plaintiff’s claim with prejudice.

Moreover, Plaintiff brought her lawsuit on behalf of a putative class. Since Plaintiff’s claim failed before class certification, the Court dismissed the putative class action without prejudice.

Pinn v. Cyclebar Franchising, LLC, 2023 U.S. Dist. LEXIS 214899, 2023 WL 8374749 (N.D. Tex. Dec. 4, 2023)

Michigan Court Dismisses Claim Due to Implausible Allegations of ATDS and Prerecorded Voice Use

The Eastern District of Michigan dismissed a TCPA claim against Defendant Ally Financial, Inc. due to Plaintiff’s failure to plead sufficient factual matter to render his claim plausible. Plaintiff alleged that Defendant had placed more than eight hundred calls to Plaintiffs’ cell phone seeking to recover an alleged debt connected to a car loan. Plaintiff further alleged that Defendant used an automatic telephone dialing system (ATDS) containing a pre-recorded voice to place these calls.

To survive a motion to dismiss, a plaintiff must plead sufficient factual matter to render their legal claim plausible. Furthermore, the plaintiff’s allegations must raise a right of relief above a speculative level.”

The TCPA prohibits making a call using any automatic telephone dialing system or an artificial or prerecorded voice,” absent an emergency or without the called party’s prior express consent.

The Court found that Plaintiff’s allegations were a formulaic recitation of the TCPA claim elements listed above. Plaintiff’s complaint merely stated that Defendant used an ATDS and a prerecorded voice without providing any more facts to make these allegations plausible.

Moreover, the Court found that the circumstances surrounding Plaintiff’s allegations made them less plausible. Plaintiff’s complaint stated that Defendant’s calls were made to recover an alleged debt connected to a car loan. The Court found that this suggested that Defendant’s calls were personalized to Plaintiff. This undermined Plaintiff’s allegation that Defendant used an ATDS, because an ATDS uses random or sequential number generators to call phone numbers. Likewise, Plaintiff’s concession that he did not personally listen to Defendant’s phone calls undermined his allegation that Defendant used a prerecorded voice.

Since Plaintiff failed to raise sufficient factual allegations to render his claim plausible, the Court dismissed Plaintiff’s complaint with prejudice.

Fluker v. Ally Fin. Inc., 2023 U.S. Dist. LEXIS 227644, 2023 WL 8881154 (E.D. Mich. Dec. 21, 2023).

New York Court Clarifies Who Qualifies as a Called Party” Under the TCPA

The Eastern District of New York denied a pro se plaintiff’s TCPA claim filed against defendants ICOT Holdings, LLC and ICOT Hearing Systems, LLC, because it found that the plaintiff was not a called party” under the statute.

Plaintiff alleged that he twice answered his mother’s residential telephone line and heard prerecorded advertisements for hearing aids, first in 2017 and again in 2018. Plaintiff’s mother was the subscriber of the residential telephone that received the calls and had not given her prior express consent for the prerecorded calls. Plaintiff did not live at his mother’s residence, but he asserted that he was a frequent visitor and spent most weekends there. He also had his mother’s permission to answer and use the phone. Arguing that because he spent a sizable amount of time there and Defendants’ phone calls interrupted his privacy, Plaintiff filed a motion for summary judgment seeking to establish that he was a called party” under the TCPA.

The Court analyzed the motion using an FCC rule defining a called party” as an individual who can be a non-subscriber, as long as they are the customary user of the telephone line and can provide prior express consent for the calls. The Court noted that the Plaintiff could not cite to any case law or example in the FCC rules analogous to his own situation.

The Court specifically distinguished Plaintiff because he neither lived in the home, constituted a part of the household, paid the telephone bills, nor made primary use of the phone himself – all of which would have provided evidence that he was a customary user. Instead, the Court analogized Plaintiff to a frequent houseguest, or a visitor who picks up the phone,” both categories that the Third Circuit held fall outside of the interests protected by the TCPA. Relying on this persuasive authority and the Plaintiff’s lack of supporting precedent, the Court then denied Plaintiff’s motion.

Bank v. ICOT Holdings, LLC, 2024 U.S. Dist. LEXIS 13672, 2024 WL 278460 (E.D.N.Y. Jan. 25, 2024).