TCPA Tracker - July 2018
Recent NewsOutcome Health Withdraws TCPA Petition
On June 18, 2018, ContextMedia, LLC d/b/a Outcome Health withdrew its request for clarification or declaratory ruling that it is not liable or entitled to a safe harbor for certain non-telemarketing text messages sent to consumers as a result of an “unknown and inadvertent technical error present in Outcome’s system.” Outcome Health filed its petition after being sued by an individual who had opted-in to receiving daily text messages with healthy living tips from Outcome Health, but whose subsequent opt-out request was not fulfilled due to a technical error that took place when Outcome Health switched to a new text message platform provider. In its petition, Outcome Health had cited to FCC precedent suggesting that good-faith efforts to comply with the statute and the Commission’s rules do not warrant liability under the TCPA. Outcome Health withdrew its petition pursuant to an agreement to settle the lawsuit.
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
- 27 (+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
- Life Insurance Direct Marketing Association et al. – seeking a ruling that life insurance agents and brokers are permitted to call their customers while the life insurance policies sold by servicing agents are in effect and for a period of 18 months after the policies expire based on an established business relationship between life insurance servicing agents and their customers. (Filed 6/18/18)
- ViSalus, Inc. – seeking a retroactive waiver of the prior-express-written-consent requirement for automated telemarketing calls. (Comments due 7/16/18; Replies due 7/30/18)
- Life Insurance Direct Marketing Association et al. – seeking a ruling that life insurance agents and brokers are permitted to call their customers while the life insurance policies sold by servicing agents are in effect and for a period of 18 months after the policies expire based on an established business relationship between life insurance servicing agents and their customers. (Comments due 8/6/18; Replies due 8/21/18)
Click here to see the full FCC Petitions Tracker.
Cases of NoteThird Circuit’s Decision Results in “Present Capacity” ATDS Standard for Yahoo!
In Dominguez v. Yahoo, Inc., No. 17-1243, 2018 WL 3118056 (3d Cir. June 26, 2018), the Third Circuit affirmed the district court’s entry of summary judgment. The Court found that Yahoo’s text-email service does not qualify as an automatic telephone dialing system (“ATDS”). More specifically, in the wake of ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018), the Third Circuit used a “present capacity” standard to determine whether the Yahoo! Service could function as an ATDS.
At issue were nearly 28,000 text messages from Yahoo to Dominguez’s reassigned cell phone number. The text messages originated from a subscription the number’s prior owner had with Yahoo’s Email SMS Service, sending a text every time the Yahoo user received an email. Dominguez unsuccessfully attempted to stop these notifications and proceeded to file this putative class action alleging TCPA violations. The district court granted summary judgment for Yahoo, ruling the 2015 FCC Declaratory Ruling that ATDS includes potential functionalities inapplicable. Accordingly, Dominguez failed to present evidence that the text-email service had the “present capacity” to qualify as an ATDS. Alternatively, the court concluded that Dominguez failed to show that the Yahoo service did not have the latent or potential capacity to be an ATDS.
The Third Circuit affirmed the lower court’s holding, in light of the ACA Int’l decision while this appeal was pending. The Court affirmed that Dominguez failed to present evidence that the Yahoo text-email service had the present capacity to function as an ATDS. It reasoned that the Dominguez experts focused on the Yahoo service’s latent or potential capacity to generate random or sequential numbers. Ultimately, the Court rested on the fact that “the record indicates that the Email SMS Service sent messages only to numbers that had been individually and manually inputted into its system by a user.” Therefore “[t]he TCPA’s prohibition on autodialers is therefore not the proper means of redress.”
The Third Circuit’s opinion and analysis of the “present capacity” standard highlights the bright-line rule created by the ACA Int’l decision.
In King v. Time Warner Cable Inc., No. 15-2474-CV, 2018 WL 3188716 (2d Cir. June 29, 2018), the Second Circuit reversed a 2015 TCPA award, ruling that it relied on an incorrect interpretation of ATDS “capacity” under the TCPA. Similar to Dominguez, King received text messages from Time Warner, intended for someone who once held her cellphone number. King attempted to stop these messages, but continued to receive 74 messages after filing suit.
The Second Circuit, in light of the ACA Int’l decision, ruled that the 2015 FCC Order the district court relied on was now void. It reasoned that the lower court improperly determined that Time Warner’s system qualified as an ATDS because there was no evidence that it had the current ability to perform ATDS functions. The Court noted that lower courts “need to investigate, on a case-by-case basis, how much is needed to activate a device’s autodialing potential in order to determine whether it violates the TCPA.” Because no record existed to conclude whether Time Warner’s system had the ability to perform ATDS functions, the Court remanded the case to further review those questions. The decision in King not only highlights the level of proof courts will require to determine what constitutes an ATDS, but it also shows a willingness to retroactively apply the decision in ACA Int’l.
In Health One Med. Ctr., Eastpointe P.L.L.C. v. Mohawk, Inc., 889 F.3d 800 (6th Cir. 2018), the Sixth Circuit joined a recent line of cases limiting TCPA liability for companies benefiting from illegal calls, faxes, or texts. Underlying this case was an unsolicited fax advertising products manufactured by pharmaceutical companies, including Bristol-Myers and Pfizer. The plaintiff argued that these manufacturers were the “senders” of the fax because they benefitted from the faxes and they were “the person or entity on whose behalf a facsimile unsolicited advertisement [was] sent.”
The Court admonished the plaintiff for reading the “sender” regulation “woefully out of context.” It reasoned that, to be a “sender,” a party must fall into one of two statutory requirements: it must either (1) be a broadcaster dispatching the fax, or (2) a hirer causing the fax to be conveyed. Here, because the pharmaceutical companies “neither dispatched the faxes nor caused them to be sent,” they could not be liable. Ultimately, the plaintiff’s theory of liability against the pharmaceutical companies amounted to “some legal alchemy” the Court was not willing to reach.