TCPA Tracker - July 2020
Recent NewsSupreme Court Upholds Constitutionality of the TCPA
On July 6, 2020, in a 7-2 decision, the Supreme Court upheld the constitutionality of the TCPA, but severed as unconstitutional the 2015 amendment that created an exception for calls related to government-backed debt. William P. Barr et al. v. American Association of Political Consultants et al., Case No. 19-631 (2020).
When first enacted in 1991, the TCPA prohibited calls placed using an automatic dialer or prerecorded voice with certain, specific exceptions. In 2015, Congress amended the TCPA to permit calls that relate to the collection of debts guaranteed by the U.S. government. That amendment does not permit the use of the same technology for debts guaranteed by private lenders or calls related to other topics, which served as the basis for challenges that the exception rendered the statute unconstitutionally content-based in violation of the First Amendment. In 2019, the Fourth Circuit agreed, finding the exception failed strict scrutiny, was unconstitutional, and should be severed from the TCPA. The government disagreed with the Fourth Circuit’s decision and petitioned the Supreme Court to review the decision. Plaintiffs also filed a cross-petition.
In the controlling opinion written by Justice Kavanaugh (joined by Chief Justice Roberts and Justice Alito), relying on Reed v. Town of Gilbert and applying strict scrutiny, the Supreme Court held that the government debt exception to the TCPA was an unconstitutional content based speaker restriction. As a remedy, the majority opted to sever the government debt exception from the TCPA, which leaves the remainder of the TCPA fully operative.
Ultimately, 7 Justices agreed that severance of the government debt exception was the proper remedy, while only two (Justices Gorsuch and Thomas) concluded that the entire TCPA should be struck down as an improper content-based restriction.
Unless a caller was relying upon the government debt exception to avoid liability under the TCPA, this decision does very little to change the status quo on TCPA enforcement and compliance. The opinion did not wade into the contentious definition of an automatic telephone dialing system under the TCPA (which has become the subject of a widening Circuit split).
On July 9, 2020, the Supreme Court granted Facebook’s petition for certiorari in a case with potentially broad implications for both class action litigation and business communications with their current and potential customers. The Supreme Court’s disposition of Facebook’s petition may settle the complex question of what qualifies as an automatic telephone dialing system (ATDS) under the TCPA, 47 U.S.C. § 227, et seq.
In Facebook, Inc. v. Duguid, et al, Case No. 19-511 (2020), plaintiff Noah Duguid alleges that defendant Facebook had contacted him via text messages without appropriate levels of consent using an ATDS, as that term is defined under the TCPA. Mr. Duguid is not a Facebook customer and alleges that he received repeated login notification text messages from Facebook. Plaintiff alleges that he never provided the company with his cellphone number, much less prior express written consent to be contacted by text. Plaintiff’s original complaint was filed in the Northern District of California in March 2015 and dismissed without prejudice for failure to properly allege that an ATDS was used to send the texts at issue. In his Amended Complaint, Duguid added factual allegations that Facebook used an ATDS by maintaining a database of numbers on its computer and transmitting text message alerts to selected numbers from its database using an automated protocol.
On July 9, 2020, three days after it released its decision in Barr, the Supreme Court granted certiorari on the following question: Whether the definition of ATDS in the TCPA encompasses any device that can “store” and “automatically dial” telephone numbers, even if the device does not “us[e] a random or sequential generator”?
The Supreme Court’s consideration of this case comes after a growing circuit split on the proper interpretation of the term in the TCPA. This question also is before the Federal Communications Commission (“FCC”) on remand in ACA International v. FCC, which concluded that the FCC’s expansive definition (adopted in 2015) was overbroad.
The Supreme Court’s next term opens on October 5, 2020, and oral argument will be scheduled for a date sometime thereafter. A decision can be expected to be published sometime between the argument and when the terms recesses in late June/July 2021. Given the Supreme Court’s consideration of the question, the FCC is not expected to rule in the interim.
On June 25, 2020, the FCC released a draft Third Report and Order, Order on Reconsideration, and Fourth Further Notice of Proposed Rulemaking concerning call blocking ahead of their open meeting scheduled for July 16, 2020.
The item’s Third Report and Order, if adopted, would establish two safe harbors that would protect voice service providers from liability when blocking calls. The first safe harbor protects terminating voice providers from liability when they block calls “based on reasonable analytics designed to identify unwanted calls, so long as those take into account information provided by STIR/SHAKEN (or, for non-IP based calls, any other effective call authentication framework that satisfies the TRACED Act) when such information is available for a particular call.” The second safe harbor protects voice service providers from liability when blocking calls from “bad-actor upstream voice service providers that, either negligently or intentionally, continue to allow unwanted calls to traverse their networks.” Finally, the Third Report and Order would require providers to establish a single point of contact to resolve claims of erroneously blocked calls.
The item’s Order on Reconsideration would deny or dismiss as moot two pending petitions filed by the Alarm Industry Communications Committee (AICC) and the American Dental Association (ADA). AICC requested that the FCC (1) mandate direct consumer notification of call-blocking programs, (2) identify alarm company notifications as a type of emergency communication that providers must safeguard, and (3) clarify that carriers must implement call-blocking programs in a non-discriminatory fashion with respect to alarm companies that are not affiliated with the carriers. The draft Order on Reconsideration denies all three of AICC’s requests, saying, respectively, that the Commission (1) made clear the providers’ responsibilities in informing their consumers of call-blocking programs, (2) will require providers to establish a single point of contact that alarm companies should use to address erroneously blocked calls, and (3) already requires the call-blocking programs to be non-discriminatory and neutral, and that it need not be tailored for each industry.
The ADA’s petition, which was submitted as a letter but “construe[d] [by the FCC] as a Petition for Clarification or Reconsideration,”, requested that the FCC (1) define, in addition to other unspecified terms, “large bursts” in the context of call volume and (2) clarify that dental office numbers should be given to voice providers for inclusion on a white list. Here, too, the FCC would “deny or dismiss as moot,” both of ADA’s requests. Concerning definitions, the Commission says that they do not want to disturb the “balance between blocking flexibility and unfettered discretion,” by defining terms that could allow bad actors to evade blocking programs. Regarding the white list, the FCC declines ADA’s request because “we decline to mandate a Critical Calls List.”
The final part of the draft item, the Fourth Further Notice of Proposed Rulemaking, seeks comment on parts of sections 4, 7, and 10 of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), proposes affirmative obligations for voice service providers “to respond to certain traceback requests, mitigate bad traffic, and take affirmative measures to prevent customers from originating illegal calls,”, and proposes requiring terminating voice service providers that block calls to provide customers with a list of blocked calls “on demand and at no additional charge.”
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
- 32 petitions pending
- 1 petition for review of the CGB order issued on 12/09/19 granting Amerifactors’ petition for declaratory ruling that faxes sent and received over the Internet are not bound by the prohibitions on junk faxes that apply to telephone facsimile machines
- 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
New Petitions Filed
- Anthem, Inc.
- On June 25, 2020 the FCC’s Consumer and Government Affairs Bureau (CGB) issued a Declaratory Ruling and Order denying Anthem, Inc.’s Petition for Declaratory Ruling and Exemption filed in 2015 and “reiterate[ing] the statutory requirement that callers must obtain consumers’ prior express consent for such calls.” Anthem had requested that the FCC exempt health plans and providers from needing to obtain “prior express consent” before “making health care-related calls and text messages to wireless telephone numbers so long as they allow consumer to opt out of such messages after the fact.”
- P2P Alliance
- On June 25, 2020, the FCC’s Consumer and Government Affairs Bureau (CGB) issued a Declaratory Ruling clarifying issues raised by the P2P Alliance’s 2018 petition, which asked the FCC to clarify that “peer-to-peer” text messaging, a “communications technology that allows organizations to communicate with their students, employees, supporters, and customers through individual, personalized text messages,” is not subject to the TCPA. In support of its request, the P2P Alliance argued that (1) P2P messaging does not involve the use of an ATDS, (2) “messages pertaining to non-political matters involve communications between two parties with a previous relationship, and the recipient has indicated his or her consent to receive such messages by providing a contact number to which such messages are delivered,” and (3) “P2P text messages of a political nature are manually dialed by an individual and do not include ‘telephone solicitations’ as defined by the TCPA.”
- The CGB’s decision does not “rule on whether any particular P2P text platform is an autodialer,” but, instead, provides two clarifications on the definition of an autodialer. First, the Bureau concludes that whether a platform is used to send a “large volume” of calls or tests is “not determinative” of whether the platform is an autodialer. In addition, the Bureau “make[s] clear that if a calling platform is not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions on calls and texts to wireless phones,” and “further confirm[s] that, even when a party uses an autodialer to send a message, it may still avoid TCPA liability by obtaining the recipient’s prior express consent.”
Click here to see the full FCC Petitions Tracker.
Cases of Note
In Gerrard v. Acara Sols. Inc., the Western District of New York rejected a magistrate’s recommendation and dismissed a complaint because Plaintiff did not allege she received advertising or telemarketing messages that violated the TCPA. Plaintiff alleged that: (i) she received over 240 unsolicited messages regarding a job offer, (ii) the messages were sent using an autodialer, (iii) she had asked the sender to stop texting her, (iv) she had no relationship with Defendant, and (v) she did not provide the legally required consent.
Defendant moved to dismiss and argued that the “informational employment opportunity messages,” received by Plaintiff do not constitute advertising or telemarketing under 47 C.F.R. § 64.1200(f)(1) and 47 C.F.R. § 64.1200(f)(12), respectively. The Magistrate Judge rejected Defendant’s argument because she found that the messages constituted actionable text messaging under the TCPA.
Defendant objected to the Magistrate Judge’s report and recommendation, and District Judge Sinatra agreed. The Court concluded that the text messages do not involve “the commercial availability or quality of any property, goods, or services” under 47 C.F.R. § 64.1200(f)(1). The Court similarly found that the texts did not “encourag[e] the purchase or rental of, or investment in,” any “property, goods, or services” as prohibited by 47 C.F.R. § 64.1200(f)(12). Therefore, the Court granted Defendant’s motion to dismiss, holding that the text messages were neither advertisements nor telemarketing messages prohibited by the TCPA.
Gerrard v. Acara Sols. Inc., No. 18-CV-1041-JLS-LGF, 2020 WL 3525949 (W.D.N.Y. June 30, 2020)
In Declements v. Americana Holdings LLC, the District of Arizona denied Defendant’s motion to dismiss which argued Plaintiff’s Complaint did not allege he received any “traditional voice calls,” therefore he was unable to establish standing to assert claims related to autodialed calls. The Court rejected Defendant’s argument, holding that the definition of call under the TCPA is broader than a “traditional voice call” and includes all efforts to communicate with, or to try to get into communication with, a person by telephone. The Court’s holding follows a consistent trend by Courts and the FCC of including a text message within the definition of a “call” under the TCPA.
Declements v. Americana Holdings LLC, No. CV-20-00166-PHX-DLR, 2020 WL 3499806 (D. Ariz. June 29, 2020)
In Newger v. First Contact, LLC., the Eastern District of Missouri held that Plaintiff was collaterally estopped from bringing a TCPA claim because he lost in a prior arbitration against a non-party based on the same calls. Plaintiff alleged that Defendants placed about 150 phone calls to his phone seeking to collect a debt on behalf of Credit One, a non-party to this case. Plaintiff responded to the calls by orally demanding that Defendants stop calling him.
Defendants filed a Motion for Judgment on the Pleadings on the TCPA claim arguing that it was barred by the doctrine of defensive collateral estoppel. Plaintiff had previously asserted the same arguments, and lost, during an arbitration against Credit One. There, the arbitrator determined that Plaintiff did not appropriately revoke his consent to receive calls to his cell phone regarding past-due debts. In the contract between Credit One and Plaintiff, Plaintiff consented to be contacted about debts by Credit One or its agents and agreed to provide “written notice” to Credit One of any intent to revoke consent to be contacted about debts owed. Plaintiff failed to comply with this requirement because he only provided an oral revocation to Defendants. Plaintiff did not properly challenge the arbitrator’s award or factual findings, so it stood as binding precedent on that issue. Thus, the Court held that the doctrine of collateral estoppel applied and granted judgment in Defendants’ favor regarding Plaintiff’s TCPA claims.
Newger v. First Contact, LLC., No. 1:20-CV-00039-SNLJ, 2020 WL 3288130 (E.D. Mo. June 18, 2020)
In Panzarella v. Navient Solutions, the Eastern District of Pennsylvania granted summary judgment for Defendant based on Plaintiff’s failure to establish that an ATDS was used to call Plaintiff’s phone. Defendant’s dialing system, ININ, was able to access telephone numbers stored in a separate SQL database management system. Plaintiff argued that because a SQL server can generate random or sequential numbers, ININ likewise had the capacity to do so, and therefore it qualified as an ATDS under the TCPA.
The Court rejected Plaintiff’s argument. Based on the evidentiary record, the Court determined that the SQL server was distinct from the ININ dialing system. The manual repeatedly stated that the database management system was not included with the dialing system, and touted the dialing system’s ability to import numbers from a “separate” database. Plaintiff could not show that the dialing system itself could generate random or sequential numbers, thus Plaintiff’s TCPA claim failed as a matter of law.
Panzarella v. Navient Sols., LLC, No. CV 18-3735, 2020 WL 3250508 (E.D. Pa. June 16, 2020)