TCPA Tracker - March 2020

Hot Topic Update

With COVID-19, many time-sensitive communications will need to be sent.  A reminder that the TCPA has an exception to consent for emergency communications” made necessary for any situation affecting the health and safety of consumers. The FCC has highlighted, as examples, situations posing health risks to a given population, utility outages, and school closings. If you have questions about whether the emergency exception applies to communications your business wants to send, we’re ready to help.

Recent News

FCC Circulates STIR/SHAKEN Draft Report & Order and Further Notice of Proposed Rulemaking

On March 10, 2020, the FCC released a draft Report & Order (R&O) and Further Notice of Proposed Rulemaking (FNPRM) (FCC-CIRC2003-01) aimed at illegal call spoofing. The R&O will be considered at the FCC’s Open Meeting scheduled for March 31.  The R&O, if adopted, would implement the Pallone-Thune TRACED Act’s (TRACED Act) requirement under § 4(b)(1) that all originating and terminating voice service providers implement the STIR/SHAKEN framework in the IP parts of their networks by June 30, 2021. The Further Notice of Proposed Rulemaking would seek comments on a range of FCC proposals aimed at implementing the rest of § 4 of the TRACED Act, including: (1) a proposal to grant an extension for SHAKEN/STIR implementation for small providers that adopt a robocall mitigation program, (2) a rule requiring voice providers with non-IP technology to either upgrade their technology or work to develop non-IP caller ID authentication technology” and other mitigation strategies, (3) a process by which voice providers can be exempt from STIR/SHAKEN implementation mandate if they have achieved other benchmarks, and (4) a prohibition on voice providers charging consumers and small businesses for caller ID authentication services. In addition, as required by § 6 of the TRACED Act, the FNPRM seeks comment on how the FCC could modify access to numbering resources to further prevent illegal robocalls. For the implementation of § 6, the FCC’s Wireline Competition Bureau has opened Docket No. 20-67.

The draft item is on the tentative agenda for the FCC’s March 31, 2020 Open Commission Meeting.

US Chamber of Commerce, 16 Others Ask the FCC to Rule on ATDS Definition Soon

On February 5, 2020 the U.S. Chamber of Commerce, joined by 16 other trade associations representing a range of industries,1 filed an ex parte letter urging the FCC to rule on their 2018 Petition for Declaratory Ruling (see our coverage in the full FCC Petitions Tracker) concerning the TCPA’s definition of an automatic telephone dialing system (ATDS) and to make addressing TCPA-related issues one of the Commission’s very top priorities in 2020.”

The group believes immediate FCC action is warranted for a handful of reasons. In the two years since the D.C. Circuit’s decision in ACA International v. FCC, a series of divergent TCPA interpretations” have resulted from federal appellate court decisions. Specifically, the letter cites the divide between the Ninth Circuit’s decision in Marks v. Crunch San Diego, LLC and the D.C. and Third Circuit’s decisions in ACA International and Dominguez v. Yahoo, Inc., respectively. According to the letter, this has only deepened regulatory and statutory uncertainty, and fanned the flames of abusive TCPA litigation.” The letter states that this ultimately harms consumers because businesses are discouraged” from communicating time-critical, non-telemarketing” information for fear being exposed to litigation. The letter concludes by pointing out the Commission’s vast record on this matter and the ample time” they have had to consider and rule on the ATDS definition.

Signatories of the ex parte letter include the U.S. Chamber of Commerce, the U.S. Chamber Institute for Legal Reform, and the U.S. Chamber Technology Engagement Center (collectively the Chamber), ACA International, American Association of Healthcare Administrative Management, American Bankers Association, American Financial Services Association, Consumer Bankers Association, Credit Union National Association, Edison Electric institute, Electronic Transactions Association, Home Furnishings Association, Insights Association, Mortgage Bankers Association, National Association of Federally-Insured Credit Unions, National Association of Mutual Insurance Companies, National Retail Federation, Restaurant Law Center, and Student Loan Servicing Alliance.

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

  • 33 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
  • 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)

New Petitions Filed
  • None 

Upcoming Comments
  • None
Decisions Released
  • None

 Click here to see the full FCC Petitions Tracker.

Cases of Note

Middle District of Florida Adopts the Eleventh Circuit’s ATDS Definition

In Northrup v. Innovative Health Insurance Partners, the Middle District of Florida, relying on the recently-announced Eleventh Circuit decision from Glasser v. Hilton Grand Vacation Co. LLC, granted summary judgment for a defendant because its text message platform did not qualify as an ATDS.  In Northrup, in order for the platform at issue to send a message, a person uploaded and reviewed a spreadsheet containing customer data, manually aligned and reviewed the data, typed in the content of the message, and clicked send, which then directed a different web-based software to send the text messages to the specified phone numbers.  Applying Glasser, the Court found that the platform was not an ATDS because it did not have the capacity to randomly or sequentially generate numbers to be called without human intervention.  Thus, the Court granted summary judgment in defendant’s favor.

Northrup v. Innovative Health Ins. Partners, LLC, No. 8:17-CV-1890-T-36JSS, 2020 WL 906199 (M.D. Fla. Feb. 25, 2020).

District of New Jersey Sidesteps Dominguez

In Hazan v. Wells Fargo Home Mortgage, the District of New Jersey denied a defendant’s motion to dismiss finding that the plaintiff’s allegation that a predictive dialer was used to contact him was sufficient to state a valid claim under the TCPA.  Hazan joins the line of cases reasoning that neither ACA International nor Dominguez vacated the FCC’s 2003, 2009, or 2012 positions that a predictive dialer can qualify as an ATDS.  As previously reported here, other courts (including those in the same circuit and district) have interpreted those same opinions as either necessarily or by implication” setting aside those earlier interpretations which concerned predictive dialers.  According to the Court, ACA International invalidated the FCC’s 2015 interpretation of the term capacity” as impermissibly expansive and in Dominguez, the Third Circuit adopted ACA Internationals holding that only the present capacity standard controls.  The Court, however, did not conduct a complete analysis of Dominguez or provide a clear definition for an ATDS, beyond saying that the plaintiff’s allegations regarding an ATDS were sufficient at this stage.  Nor did the District Court address the Seventh or Eleventh Circuit’s recent decisions (in Gadelhak and Glasser), in which the courts expressly followed Dominguez and read it to hold that even predictive dialing equipment must have the capacity to generate telephone numbers to qualify as an ATDS.
We note that presently before the Court of Appeals for the Third Circuit is an appeal, in Smith v. Navient Solutions, Case No. 19-3025, that will address the definition of ATDS.
Hazan v. Wells Fargo Home Mortg., No. CV1810228MASTJB, 2020 WL 919183 (D.N.J. Feb. 26, 2020).

District of Maryland Declines to Define ATDS

In Boger v. Citrix, the District of Maryland denied a defendant’s motion to dismiss, in part because the plaintiff alleged that a predictive dialer was used to call him because he heard a distinctive pause before a sales representative came onto the line.  The Court reasoned that this was sufficient to allow a plausible inference that an ATDS was used.  When reaching its decision, the Court reasoned that courts have defined an ATDS in three different ways.  According to the Court: the first definition imposes liability if a telephone system dials without human intervention numbers produced by a random or sequential generator; the second definition imposes liability if a telephone system could dial without human intervention randomly or sequentially generated numbers; and the last definition imposes liability for telephone systems that not only have the capacity to call numbers produced by a random or sequential number generator, but which also have the capacity to dial stored numbers automatically.  The Court ultimately reserved decision on which interpretation to adopt, because the Fourth Circuit has not yet defined an ATDS and other courts have allowed similar allegations to survive a motion to dismiss.  The Court held that although the defendant’s telephone system may not constitute an ATDS, discovery would be needed to make that determination. 
Boger v. Citrix Sys., Inc., No. 8:19-CV-01234-PX, 2020 WL 1033566 (D. Md. Mar. 3, 2020).

Seventh Circuit Affirms Dismissal of Agency-Based TCPA Action

In Warciak v. Subway Restaurants, Inc., the Seventh Circuit affirmed the dismissal of a TCPA complaint against Subway.  The plaintiff had received a text from his cellular service provider T-Mobile offering its subscribers a free sandwich from the defendant’s popular sandwich chain.  He sued the chain on a common law agency theory, claiming that for the purposes of that message, Subway was liable as T-Mobile’s principal.  A lawsuit against T-Mobile was barred by Plaintiff’s arbitration agreement as a part of his subscriber agreement.
The district court dismissed the claim, and the Seventh Circuit affirmed on appeal. First, the complaint failed to state facts sufficient to support a plausible agency relationship.  The plaintiff did not include any allegation that Subway had manifested to the public that T-Mobile was its agent, something necessary to create apparent authority for T-Mobile to act on Subway’s behalf.  Second, the TCPA contains a wireless carrier exception when a message is sent by that carrier free of charge to its customer.  As each of those things were true, the wireless carrier exemption applied and the complaint was properly dismissed.
Warciak v. Subway Restaurants Inc., No. 19-1577, 2020 WL 559105 (7th Cir. Feb. 5, 2020).