FCC Approves Release of NPRM to Implement Government Debt TCPA Exemption

On May 4, 2016, the FCC issued a Notice of Proposed Rulemaking to exempt robocalls made to collect a debt owed to or guaranteed by the United States” from the TCPA’s prior express consent requirement. The new rules will implement a provision of the Bipartisan Budget Act of 2015. In its Notice, the Commission seeks comment on a number of issues, including as follows:

What types of calls should be covered by the exemption? The Budget Act created the TCPA exemption for calls made solely to collect a debt” owed to the United States.  The Commission seeks comment on the proper interpretation of that language.  It also proposes to allow debt servicing calls under the exemption because such calls may provide a valuable service by offering information about options and programs designed to keep at-risk debtors from defaulting or becoming delinquent on their loans.”  Finally, the Commission seeks comment on the proper interpretation and scope of the phrase owed to or guaranteed by the United States.”
Who can be called? The Commission proposes that the exemption will cover only calls to the person or persons obligated to pay the debt.”  It would exclude calls to persons who the caller does not intend to reach, and would apply the one-call window” rule for reassigned numbers.  The Commission seeks comments on these proposals and asks commenters to provide alternative approaches they feel would be appropriate.
Who may place the calls? The Commission proposes that the exemption would cover calls made by creditors and those calling on their behalf, including agents.  It seeks comment on whether it should adopt this approach, or consider a narrower or broader interpretation under the Budget Act exemption.
How should the Commission limit the number and duration of the calls? The Budget Act provides the Commission with discretion to restrict covered calls, including by limiting the frequency and duration of the calls.  Thus, the Commission has proposed a three-call-per-month maximum for autodialed, prerecorded, or artificial voice calls to wireless numbers.  The limit would apply regardless of whether a call went unanswered.  The Commission posits whether a different limitation would be appropriate for live agent calls.  Without setting forth specific proposals, the Commission also seeks comment on the appropriate duration for the calls, as well as other restrictions (i.e., limiting calls hours to 8:00 AM to 9:00 PM). 
Should consumers be permitted to stop covered calls? The Commission proposes that consumers should have a right to stop [covered] calls at any point the consumer wishes.”  It proposes that stop-calling requests would continue to apply even after the debt is transferred to other collectors.  It further proposes to require callers to inform consumers of their right to make a stop-calling request. 

Comments on the Commission’s proposals are due on June 6, 2016 and replies are due on June 21, 2016. Following the comment period, we expect the proceeding to move quickly because the Commission is statutorily mandated to adopt rules to implement the exemption no later than August 2, 2016.    


With the rise in TCPA litigation, numerous parties have sought clarification of the rules. Kelley Drye’s Communications group has compiled this comprehensive summary of the pending petitions. 
Number of Petitions Pending New Petitions Filed Upcoming Comments Decisions Released
19 (+25 seeking a retroactive waiver of the opt-out requirement for fax ads)  C. Specialties, Inc.; Buccaneers Limited Partnership – fax waiver petitions  Inter-Med, Inc. d/b/a Vista Dental Products; Legal & General America, Inc.; Jeana Fleitz, LLC d/b/a The X-Ray Lady; C. Specialties, Inc.; Buccaneers Limited Partnership (waiver of fax ad rules per the Anda Order)
(Comments due 5/13/15; Replies due 5/20/16)

Todd C. Bank (scope of ATDS prohibitions for residential telephone lines)
(Replies due 5/17/16)

Kohll’s Pharmacy & Homecare, Inc. (waiver of fax ad rules per the Anda Order)
(Comments due 5/23/16; Replies due 6/6/16)

Mobile Media Technologies (clarification of the consent rules and revocation of consent)
(Comments due 5/27/16; Replies due 6/13/16) 
Click here to see the full FCC Petition Tracker.
Trump Campaign Is Hit With Two Consecutive TCPA Class Actions

On April 25 and 26, 2016, respectively, the Donald Trump campaign was sued in two separate TCPA class actions filed in the Northern District of Illinois. See Thorne v. Donald J. Trump for President, Inc., No. 16-cv-4603 (N.D. Ill. Apr. 25, 2016); Roberts v. Donald J. Trump for President, Inc., No. 16-cv-4676 (N.D. Ill. Apr. 26, 2016).  Both actions allege that the Trump campaign sent unwanted text messages to consumers without their prior express consent, and without providing the disclosures required by the TCPA.  In particular, named Plaintiffs claim to have received the following text message to their cellular phone: Reply YES to subscribe to Donald J. Trump for President. Your subscription will help Make America Great Again! Msg & data rates may apply.”  The actions further allege that the Trump campaign sent these text messages en masse to thousands of other wireless consumers. 

The cases differ in certain key respects. The Thorne action does not specify how the named Plaintiff came to receive the alleged texts, and seeks to certify a nationwide class of all individuals who, during the last four years, did not provide their cell phone numbers to the Trump campaign but nonetheless received the text message.  By contrast, in Roberts, Plaintiff admits to providing his telephone number to a business called Event Brite” when he signed up to attend a Trump rally in Chicago; however, he claims Event Brite” never obtained his prior consent to send the text message at issue.  He seeks to certify a class of similar individuals who, since June 2015, provided their cell phone numbers to Event Brite to attend a Trump-related event.  With the upcoming general election for the presidency fast-approaching, these two actions may serve as a warning sign of future actions along these lines by other political campaigns seeking to rally support and contributions through the use of calls and text messages.

Eighth Circuit Reverses Denial of Class Certification in TCPA Class Action

In Sandusky Wellness Ctr., LLC v. Medtox Sci., Inc., No. 15-1317, 2016 U.S. App. LEXIS 7992 (8th Cir. May 3, 2016), the Eighth Circuit recently reversed a district court’s denial of class certification, ruling that the district court abused its discretion in finding the class to be unascertainable.  Plaintiff had moved to certify a class of persons who were sent” telephone facsimile messages by Medtox, which did not display a proper opt out notice.”  Medtox argued that this definition rendered class membership unascertainable because the recipient of each fax is not readily apparent, and thus, thousands of individualized inquiries would be needed to determine who was sent” the faxes.  For example, the fax at issue in the case although received by Sandusky, which owned and operated the fax machine, had actually been sent” to a Dr. Montgomery.  The district court agreed with Defendant.  According to the district court, the class definition raised serious concerns” because “[i]n order to determine to whom each fax was sent – and thus, who was injured, the court would need to delve into the unique circumstances of each fax transmission.”  Sandusky Wellness Ctr. LLC v. Medtox Sci., Inc., 2014 U.S. Dist. LEXIS 107266, *1-2 (D. Minn. Aug. 5, 2014).  On this basis, class certification was denied. 

On appeal, however, the decision was reversed.  According to the Eighth Circuit, the best objective indicator of the recipient’ of a fax is the person who subscribes to the fax number,” and although the subscriber might not always be the recipient, fax logs showing the numbers that received each fax are objective criteria” that would allow each fax recipient to be determined.  Sandusky, 2016 U.S. App. LEXIS 7992 at *10-11.  Thus, according to the Court of Appeals, the proposed class was ascertainable. The case was remanded to the lower court for further proceedings. 

Ninth Circuit Rules That Conditional Tender of Complete Relief to Individual Does Not Moot Class Action

Applying the Supreme Court’s decision in Campbell-Ewald v. Gomez, the Ninth Circuit in Chen v. Allstate Ins. Co., No. 13-16816, 2016 U.S. App. LEXIS 6627, held that where a defendant deposits the full amount of Plaintiff’s claims in an escrow account payable to Plaintiff, pending entry of a final district court order or judgment directing the escrow agent to pay the tendered funds,” it does not moot either Plaintiff’s individual claim, or the action as a whole.

According to the Ninth Circuit, under these circumstances, Plaintiff’s individual claim cannot be moot, as Plaintiff has not yet received any actual relief, and Defendant has not unconditionally relinquished its interest in the deposited funds. Chen, 2016 U.S. App. LEXIS 6627 at *25.  Moreover, the Court found it inappropriate to enter judgment on a Plaintiff’s individual claims, over his objection, before Plaintiff has had a fair opportunity to move for class certification.  Id. at *28.  Notably, however, the Court assumed, without deciding,” that it might be appropriate under certain circumstances to enter judgment over Plaintiff’s objection; for example, where Defendant unconditionally surrenders, and only the Plaintiff’s obstinacy or madness prevents her from accepting total victory.”  Id., at *29 ( quoting Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523, 1536 (2013) (Kagan, J., dissenting).