|IN THE OCTOBER 2016 ISSUE: |
D.C. Circuit to Hear Two TCPA Appeals in Coming Weeks
Appeals of two key TCPA orders are scheduled for oral argument before the U.S. Court of Appeals for the D.C. Circuit in the coming weeks. First, the court will hear arguments on Wednesday, October 19th in ACA International et al. v. FCC, which challenged the validity of the FCC’s rule changes and interpretations of the TCPA in its July 2015 Omnibus TCPA Declaratory Ruling related to autodialers, reassigned numbers, and revocation of consent. Second, the court will hear arguments on Tuesday, November 8th in Bais Yaakov et al. v. FCC, in which the petitioners claim that the FCC exceeded its authority under the TCPA when it adopted rules related to solicited fax advertisements.
FCC Authorizes Use of Call Blocking Technologies by Telephone Service Providers to Block Spoofed Calls
On September 30th, the Consumer and Governmental Affairs Bureau for the Federal Communications Commission (FCC or Commission) released a brief Public Notice in which it clarified that telephone service providers (including traditional, wireless and VoIP providers) are permitted to block calls from a particular phone number if the subscriber to that phone number “requests call blocking in order to prevent its telephone number from being spoofed.” Importantly, the guidance allows the originating subscriber to request blocking, in order to prevent confusion resulting from spoofing of the subscriber’s number. In releasing this guidance, the Bureau stated not only that “the spoofed number’s subscriber has a legitimate interest in stopping the spoofed calls,” but also that “consumers can be presumptively deemed to have consented to the blocking of [such] calls.” The Commission had included a similar interpretation about call blocking technology (albeit not as explicit) in its 2015 TCPA Omnibus Order, and the Bureau stated that its intention in releasing the Public Notice was to spur the development and deployment of such technologies.
The Bureau cautioned that the Public Notice “does not disturb providers’ general obligation to complete calls” and that carriers will be expected to “take all reasonable steps to ensure that calls are not mistakenly blocked for reasons that may include reassigned numbers.” However, it did not clarify or give examples of any such measures, and in fact acknowledged that further guidance on this point may be necessary in the future.
The Bureau’s guidance comes just weeks after FCC Chairman Tom Wheeler announced the formation of the “Robocall Strike Force,” which is set to release its initial recommendations to the Commission on October 19th for solutions to prevent, detect, and filter autodialed calls. In light of the Chairman’s vigorous TCPA agenda in recent months, we expect the Commission to continue pushing the telecommunications industry to take action on blocking techniques and other measures to reduce the number of autodialed calls to consumers for the remainder of his term.
|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 |
|24 (+28 seeking a retroactive waiver of the opt-out requirement for fax ads) ||Safemark Systems, LP (filed 10/6/16) – seeking a retroactive waiver of the opt-out requirement for fax ads|
Cynosure, Inc. (filed 9/30/16) – seeking a rulemaking to repeal the opt-out notice requirement for solicited fax ads
Amsterdam Printing & Litho, Inc. (filed 9/27) – seeking a retroactive waiver of the opt-out requirement for fax ads
Schwabe North America Incorporated (filed 9/19/16) – seeking a retroactive waiver of the opt-out requirement for fax ads
Power Products, LLC d/b/a Del City Wire Co., Inc. (filed 9/9/16) – seeking a retroactive waiver of the opt-out requirement for fax ads
Biolase, Inc. (filed 9/9/16) – seeking a retroactive waiver of the opt-out requirement for fax ads
|Cartridge World North America, LLC; Biolase, Inc.; Power Products, LLC d/b/a Del City Wire Co., Inc.; Schwabe North America Incorporated; Amsterdam Printing & Litho, Inc. – seeking a retroactive waiver of the opt-out requirement for fax ads|
(Comments due 10/14/16; Replies due 10/21/16)
|Failure to Allege and Specify a Spokeo Injury-In-Fact Will Give Way to Dismissal|
In Supply Pro Sorbents, LLC, v. RingCentral, Inc., Case No. C 16-02113 JSW, 2016 WL 5870111 (N.D. Cal. Oct. 7, 2016), U.S. District Judge Jeffrey S. White granted Defendant’s motion to dismiss based on Plaintiff’s lack of standing due to its failure to allege an injury-in-fact. Defendant RingCentral is a provider of cloud-based business communications service, which provides its users a platform to send and receive faxes, and provides a boilerplate fax cover sheet.
In this TCPA fax case, Plaintiff brought a putative class action based on a single fax it allegedly received that included a cover page containing Defendant’s logo and a single line of text stating, “Send and receive faxes with RingCentral, www.ringcentral.com.” Id. at *1. On a motion to dismiss, Defendant argued that Plaintiff lacked standing due to a failure to allege an injury-in-fact.
The Court agreed and noted that “in order to have standing to allege a violation of … the TCPA, a plaintiff must allege more than a mere statutory violation.” Id. at *3 (citing Spokeo, Inc. v. Robbins, 136 S. Ct. 1540, 1549 (2016)). The Court noted that Plaintiff’s complaint alleges that junk fax recipients lose the use of their fax machines, paper, and ink toner, as well as the loss of time dealing with junk faxes, which interrupt the recipient’s privacy. Id. Plaintiff also alleged that junk faxes tie up telephone lines, prevent fax machines from receiving legitimate and authorized faxes, prevent use of fax machines for use of outbound faxes, and cause undue wear and tear on the fax machine. Id.
Despite all these allegations, the Court determined that it was still “not clear how Plaintiff alleges it specifically suffered these particular harms from the single line identifier on the optional cover sheet of a solicited four-page fax it received.” Id. at *3 (emphasis added). Moreover, even though the Court granted Plaintiff leave to amend, it noted that “it is not clear how Plaintiff could identify sufficient injury-in-fact to rise to the level of constitutional standing.” Id.
This case is yet another great example of courts adopting the Spokeo standard for standing in TCPA cases, and will no longer allow regurgitated statutory language in complaints to pass Article III muster.
Grocery Store’s HIPAA-Compliant Flu Shot Reminders Give Early Exit on Summary Judgment
On October 11, Magistrate Judge Jacqueline Scott Corley, ruled in favor of Defendant Safeway for autodialed and pre-recorded calls to Plaintiff. This case arose when Plaintiff, a Safeway customer, received three pre-recorded telephone messages promoting Safeway’s flu shots. In September 2014, Safeway contracted with a third-party communications company for the express purpose of contacting Safeway’s existing pharmacy patients via pre-recorded telephone calls to remind them to get a flu shot for the upcoming flu season.
The criteria to be contacted by Safeway required (1) a patient to be an existing Safeway patient who previously provided a telephone number; (2) Safeway’s records to indicate that the patient received a flu shot at one of its pharmacies during the immediately preceding year’s flu season; and (3) Safeway’s records to indicate that the patient had not yet received a flu shot for the current season. Jackson v. Safeway, Inc., Case No. 15-cv-04419, 2016 WL 5907917, at *2 (N.D. Cal. Oct. 11, 2016).
Prior to the calls, and according to the record evidence, Plaintiff first received her flu shot from a Safeway pharmacy in January 2014. In connection with this flu shot, Plaintiff completed a “Consent and Release” form, wherein she provided her wireless telephone number. Id. at *1. Thereafter, in November 2014 and January 2015, Plaintiff received three pre-recorded calls to her wireless number. Id. Based on these calls, Plaintiff brought suit alleging violations under the TCPA.
On an early summary judgment motion, Safeway argued that the calls were not in violation of the TCPA based on (1) the TCPA’s telemarketing health exception (47 C.F.R. § 64.1200(a)(2), “Health Exception”); and/or (2) the exigent healthcare treatment exemption laid out in the July 2015 FCC Order, ¶ 147 (“Treatment Exemption”). Importantly, both the TCPA’s Health Exception and Treatment Exemption invoke strict requirements under the Health Insurance Portability & Accountability Act (HIPAA).
Based on the evidence presented, the Court found that Safeway provided undisputed evidence that the flu shot calls to Plaintiff qualified under both the TCPA Health Exception and Treatment Exemption. Under the Treatment Exemption, the Court found that Safeway established that the calls (1) were not charged to the called party; (2) identified Safeway’s name and contact information; (3) were made only to the telephone number provided by Plaintiff in connection with her prior flu shot; (4) were made under HIPAA’s “prescription notification” and “wellness checkup”, and did not include an advertising message; (5) lasted less than a minute; (6) were made one per day; and (7) provided an opt out opportunity. Id. at *5. The Court found that “every reasonable trier of fact would find that the flu shot reminder calls fall under the Exigent Healthcare Treatment Exemption and Safeway thus did not require Plaintiff’s prior express consent under the TCPA.” Id. at *7.
Likewise, the Court sided with Safeway under the Health Exception when it found that “[u]nder the present record, every reasonable trier of fact would conclude that the flu shot calls deliver a ‘health care’ message and were within the scope of Plaintiff’s prior express consent.” Id. at *7. Because Safeway operates pharmacies within their stores, the Court agreed that any reasonable trier of fact would conclude that “Safeway’s flu shot reminder calls are ‘health care’ messages under the relevant FCC and HIPAA guidelines” because they “concern ‘care, services, or supplies related to the health of an individual’ and because providing flu shots constitutes ‘dispensing of a drug ... in accordance with a prescription.’” Id. at *10.
Accordingly, Safeway’s summary judgment motion was granted, and the case was closed. This case is a great example of how proper privacy compliance across multiple federal regulations can provide a business safeguards against lawsuits that otherwise have no foundation.
|FCC/TCPA Regulatory Compliance|
Class action partner Lauri A. Mazzuchetti will present “ FCC/TCPA Regulatory Compliance\” at the Professional Association for Customer (PACE) Workshop. The workshop will address recent case developments and provide an updated comprehensive summary of regulatory actions including the Federal Communication Commission (FCC) recent affirmation of Campbell-Ewald, Government Exemption from TCPA and the FTC’s Comments to the Federal Communications Commission (FCC) Latest in June Mixed Bag for Debt Collection.