1 Telephone Consumer Protection Act Basics, Washington D.C Keith J. Keogh KEOGH LAW, LTD. Alexander Burke BURKE LAW OFFICES, LLC OVERVIEW OF THE TCPA Junk Faxes Autodialed calls Text Message Ads Pre-Records Do Not Call Violations to Cell
2 Congress found that unwanted automated calls were a nuisance and an invasion of privacy, regardless of the type of call and that banning such calls was the only effective means of protecting telephone consumers from this nuisance and privacy invasion. Pub. L. No , 2(10-13)(Dec. 20, 1991) codified at 47 U.S.C The TCPA makes it unlawful for any person within the United States... to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice U.S.C. 227(b)(1)(A)(iii) The TCPA defines ATDS as equipment which has the capacity -(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. 47 U.S.C 227(a)(1). Focus on ATDS is whether it has the capacity and not whether it actually used that capacity. Satterfield, 569 F. 3d at 951; Lozano, 702 F. Supp. 2d at ; Griffith v. Consumer Portfolio Serv., 2011 U.S. Dist. LEXIS (N.D. Ill. Aug. 16, 2011); Vance v. Bureau of Collection Recovery LLC, No , 2011 U.S. Dist. LEXIS at *6-7 (N.D.Ill., March 11, 2011); Lozano v. Twentieth Century Fox Film Corp., 702 F. Supp. 2d 999, (N.D. Ill. 2010); Hicks v. Client Services,Inc., 2009 WL (S.D.Fla. June 9, 2009); See alsojoffe v. Acacia Mtg Corp., 121 P.3d 831, 839 ( Ariz. App. 2005). Kazemi v. Payless Shoesource, Inc., 2010 U.S. Dist. LEXIS (N.D. Cal. Mar. 12, 2010). CAPACITY TO AUTODIAL & CONSENT Capacity issue is important as virtually no one uses a pure autodialer. Instead, most most companies use some variation of a predictive dialer, which is simply a more productive dialer. The TCPA directed the FCC to prescribe regulations implementing the restrictions on the use of autodialers. 47 U.S.C. 227(b)(2). Following Congress s directive, the FCC has expanded the definition of an ATDS to include predictive dialers. In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No , 18 FCC Rcd 14014, (June 26, 2003) ( 2003 Order ). In 2008, in response to a petition by debt collection trade association ACA International, the FCC held the TCPA applied to debt collectors and again expressly reaffirmed that predictive dialers used for collections calls are ATDS when it is equipment paired with predictive dialing software and a database of numbers. In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; Request of ACA International for Clarification and Declaratory Ruling, CG Docket No , 23 FCC Rcd 559, (Dec. 28, 2007) Unless the cell was provided by the consumer (not skipped traced) there is no consent even under the FCC s 2008 order and the caller has the burden to prove consent. The FCC s holdings with respect to predictive dialers are final and controlling under the Hobbs Act. CE Design, Ltd. v. Prism Business Media, Inc., 606 F. 3d 443, 446 (7th Cir. 2010).
3 Text Messages are calls under the TCPA. Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009); Lozano v. Twentieth Century Fox Film Corp., 702 F. Supp. 2d 999, (N.D. Ill. 2010); Abbas v. Seeling Source, LLC, 2009 WL , 2009 U.S. Dist. LEXIS (N.D. Ill. 2009) ( [N]either the above-quoted dictionary definition nor the TCPA requires that a call be oral. Indeed, if such a requirement existed, the TCPA s prohibition on calls to a paging service, would be of little effect. ) A telephone solicitation is defined as the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but such term does not include a call or message (A) to any person with that person s prior express invitation or permission, (B) to any person with whom the caller has an established business relationship, or (C) by a tax-exempt nonprofit organization. 47 U.S.C. 227(a)(3); 47 C.F.R (f)(12). A prerecorded messages containing free offers and information about goods and services that are commercially available are prohibited to residential telephone subscribers, if not otherwise exempt. TCPA Revisions Report and Order, 18 FCC Rcd (2003).
4 Telemarketing to phone numbers (residential or cell) on the federal or company specific do-not-call list strictly prohibited. Does not matter if prerecorded or automatic. Anyone who is on the DNC list that has received two telemarketing calls within a twelve month period can sue (for both calls). No PROA if just one call. 47 U.S.C. 227(c)(5). 47 U.S.C. 227(b) Restrictions on use of automated telephone equipment (1) Prohibitions It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice (i) to any emergency telephone line (including any 911 line and any emergency line of a hospital, medical physician or service office, health care facility, poison control center, or fire protection or law enforcement agency); (ii) to the telephone line of any guest room or patient room of a hospital, health care facility, elderly home, or similar establishment; or (iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call; (B) to initiateany telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the Commission under paragraph (2)(B);
5 Telemarketing EBR: 47 CFR (f)(5) (5) The term established business relationshipfor purposes of telephone solicitations means a prior or existing relationship formed by a voluntary two-way communicationbetween a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of the subscriber's purchase or transaction with the entity within the eighteen (18) months immediately preceding the date of the telephone call or on the basis of the subscriber's inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been previously terminated by either party. (i) The subscriber's seller-specific do-not-call request, as set forth in paragraph (d)(3) of this section, terminates an established business relationship for purposes of telemarketing and telephone solicitation even if the subscriber continues to do business with the seller. (ii) The subscriber's established business relationship with a particular business entity does not extend to affiliated entities unless the subscriber would reasonably expect them to be included given the nature and type of goods or services offered by the affiliate and the identity of the affiliate. Section 227(b)(3)(B) provides a minimum of $ in statutory damages per fax, call or message. Hinman v. M and M Rental Center Inc., 596 F. Supp. 2d 1152 (N.D. Ill. 2009). Awarding $500 per facsimile for a total of $3,862,500 based on the total of 7,725 unsolicited advertisements that defendant sent to the class. The TCPA prohibits the sending of unsolicited fax advertisements and make no reference at all to receipt. Id. at If a violation was willful or knowing, the court can treble the amount under 227(b)(3)(c). The FCC has held: It is irrelevant to a finding of willfully or knowingly whether the junkfaxer intended to violate federal law. FCC Staff Opinion (letter from Acting Chief of the Enforcement Division, Common Carrier Bureau, Glenn T. Reynolds to Robert Biggerstaff, dated July 27, 1999). Sengenberger v. Credit Control Services, Inc., 2010 U.S. Dist. LEXIS (N.D. Ill. May 5, 2010) (granting summary judgment on TCPA claim and finding that an intentional act equates to willfully or knowingly); See Nicholson v. Hooters of Augusta, Inc., 95-RCCV-616, Richmond County, Ga (Judge Brown, April 25, 2001), Jury awarded $3,000 for each of the 1,321 class members for the transmitting of six unsolicited facsimile advertisements. The Court tripled that amount to $9,000 per class member for a total of $11,889,000.
6 In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, GC Doc , 23 FCC Rcd. 559, 565 (January 4, 2008) predictive dialers are ATDS and creditor on whose behalf debt collector is calling is liable for calls. On February 15, 2012, the FCC issued a new Report and Order that redefined prior express consent for all telemarketing calls. - Debt collection calls and several other categories of calls are not affected. - signed by the consumer and be sufficient to show that he or she: - (1) received clear and conspicuous disclosure of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and - (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates. The Hobbs Act a/k/a Administrative Orders Review Act 28 USC 2342(1); 47 USC 402(a) provides specific remedies for reviewing FCC orders, which do not include District Court review. CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443 (7th Cir. 2011), but compare Leyse v. Clear Channel Broad., Inc., 2012 FED App. 0307P (6th Cir.) (6th Cir. Ohio 2012) holding that same FCC Regulations regarding the TCPA is only entitled to Chevrondeference and Hobbs Act does not prevent court from reviewing. Debt Collection Calls to Cell The FCC s rules do not discriminate based on the content of any autodialed call to a cell phone. Rather, the broad prohibitions of 227(b)(1)(A)(iii) apply regardless of the content of the call Ruling. The 2008 Ruling did excluded debt collection calls for calls to land lines and held must be telemarketing. Not surprisingly, courts have followed suit. i.e. Meadows v. Franklin Collection Serv., 414 Fed. Appx. 230 (11th Cir. 2011) ( 47 U.S.C. 227(b)(1)(B). That section makes it unlawful to initiate any telephone call to any residential telephone line using ). The fact that the FCC and the Eleventh Circuit recognizes that 227(b)(1)(B) held limited to telemarketing calls to land lines is unremarkable and wholly irrelevant to a violation of 227(b)(1)(A)(iii). Seealso Mims v. Arrow Fin. Serv., LLC, 132 S. Ct. 740 (2012), which involved debt collection calls to a cell phone under the TCPA. Gager v Dell, 3 rd Circuit-rejected creditor's argument that its autodialed debt collection calls should be exempt from TCPA liability based on their content, as the particular calls were placed to the debtor's cell phone. Held debt collection exemptions "do not apply to cellular phones; rather, these exemptions apply only to autodialed calls made to landlines"
7 The plain language of section 227(b)(1) makes it clear that the "recipient" of a call violative of that provision may sue not merely, as ERC argues, the "intended recipient." Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637 (7 th Cir. 2012) Wrong Number calls, where plaintiff inherited a debtor s phone number, are actionable because not made with prior express consent of recipient. Use of cell phone airtime minutes constitutes out of pocket loss. The court made loose use of the term subscriber, which some defendants are now arguing that the end user of the cell phone must be the subscriber on the bill in order to have standing. Standing to Sue DON T NEED TO BE A CALLED PARTY The TCPA uses the term called party, only when setting forth an exception to liability, stating that a person does not violate the TCPA if the call is made for emergency purposes or made with the prior express consent of the called party. See47 U.S.C. 227(b)(1)(A). The statute does not use the term called party when defining who may assert a TCPA claim. 1. Page v. Regions Bank, 2012 U.S. Dist. LEXIS (N.D. Ala. Aug. 22, 2012) 2. Page collects the following cases that support this holding: Harris v. World Fin. Network Nat'l Bank, 867 F.Supp.2d 888, 2012 WL , at *5 (E.D.Mich. Apr. 3, 2012); Anderson v. AFNI, Inc.,No , 2011 WL , at *7 (E.D.Pa. May 11, 2011); D.G. ex rel Tang v. William W. Siegel & Assocs., Attorneys at Law, LLC, 791 F.Supp.2d 622, 625 (N.D.Ill.2011); Tang v. Med. Recovery Specialists, LLC, No. 11 C2109, 2011 WL , at *2(N.D.Ill. July 7, 2011) (slip op.); Kane v. Nat'l Action Fin. Servs., No. 11 cv 11505, 2011 WL , at *7(E.D.Mich. Nov. 7, 2011) (slip op.)
8 The burden is on the caller to show that the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 ( 2008 FCC Ruling ), 23 F.C.C.R. 559 at 10 (Dec. 28, 2007)(Emphases added). During Transaction may not be limited to Initial Contract "during the transaction that resulted in the debt owed," includes voluntary providing the cell sometime after the account is opened. Moore v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS , (W.D.N.Y. Sept. 15, 2011). Also held revocation of consent must be in writing. FCC CLARIFIES CONSENT On February 15, 2012, the FCC issued a new Report and Order that redefined prior express consent for all telemarketing calls. - Debt collection calls and several other categories of calls are not affected. - signed by the consumer and be sufficient to show that he or she: - (1) received clear and conspicuous disclosure of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and - (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates. The FCC unequivocally held that consumers may effectively revoke consent under the TCPA In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling as to Petition of SoundBite Communications, Inc., CG Docket No (Nov. 29, 2012) ( SoundBite Ruling ). Recognizing neither the text of the TCPA nor its legislative history directly addresses the circumstances under which prior express consent is deemed revoked, the FCC, citing its powers to interpret the TCPA, held that a consumer can opt-out of prior express consent under 227(b)(1)(A). A one-time text message confirming a consumer s request to opt out of autodialed text messages to her cell phone would not violate the TCPA, but additional messages would violate the TCPA because consent to call has been revoked
9 Nigrov. Mercantile Adjustment Bureau, LLC., 2014 U.S. App. LEXIS (2 nd Cir. 2014) No Consent-nephew provided cell electric company to turn off relative s service. Number was not during the transaction that resulted in the debt owed. FCC filed an Amicus urging no consent. FCC Amicus WL Mais v. Gulf Coast Collection Bureau, Inc., 2014 U.S. App. LEXIS 18554(11th Cir. 2014) FCC interpretation controls under Hobbs Act and Mais, through his wife, gave the hospital his cell and therefore consent to call. Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, (11th Cir. 2014) Can revoke consent. Called party is subscriber and not intended recipient. Breslowv. Wells Fargo Bank, N.A., 755 F.3d 1265 (11th Cir. 2014) called party," for purposes of 227(b)(1)(A)(iii), means the phone service and not the intended recipient. subscriber to the cell Brenner v. Am. Educ. Servs., 575 Fed. Appx. 703 (8th Cir. 2014) remanded to determine if Brenner effectively revoked his consent and if did, summary judgment was not proper. Gagerv. Dell Fin. Servs., LLC, 2013 U.S. App. LEXIS (3d Cir. Pa. Aug. 22, 2013) Can revoke consent. Relied on FCC and common law. TCPA Discovery Key Points Dialer Records sometimes show calls missing from account notes. Date/time, call scripts, recordings. Vendor? Account Notes show collector notes and other important indicia, such as triple tones and requests to stop calling. Consent Factual: where/when/how did D obtain number? Contention: what s D s contention as to consent? Dialing System Focus on capacity of system, and how it is used. Knowledge of the TCPA relevant to willfulness (Purpose of the calls is important, if not debt collector/creditor case).
10 Dialer Records. Vendor Records. Account Notes. Don t Settle without: If D claims it made manual calls, then get an explanation of what they mean. Some types of equipment I think usually constitutes an ATDS: Avaya, Aspect, LiveVox, Soundbite, anything Asterisk or ViciDial-based. Then, find out how they used the system. The more automated the system, the stronger your case is. ON BEHALF OF LIABILITY FCC Orders Previously held: Party on whose behalf a telephone solicitation is made bears ultimate responsibility for any violations of the TCPA. Previously debate whether this was strict liability or vicarious liability 2013 FCC ORDER FCC clarified its prior orders and held that the prohibitions contained in section 227(b) incorporate the federal common law of agency and that such vicarious liability principles reasonably advance the goals of the TCPA FCC Orderat p. 14, 35.
11 To provide guidance, the 2013 Order stated: apparent authority may be supported by evidence that the seller allows the outside sales entity access to information and systems that normally would be within the seller s exclusive control, including: access to detailed information regarding the nature and pricing of the seller s products and services or to the seller s customer information. The ability by the outside sales entity to enter consumer information into the seller s sales or customer systems, as well as the authority to use the seller s trade name, trademark and service mark may also be relevant Order p. 19, 46. a seller may be bound by the unauthorized conduct of a telemarketer if the seller is aware of ongoing conduct encompassing numerous acts by the telemarketer and the seller fails to terminate, or, in some circumstances, promotes or celebrates the telemarketer. Idat p. 14, n In summary, the FCC stated that: we see no reason that a seller should not be liable under [227(b)] for calls made by a third-party telemarketer when it has authorized that telemarketer to market its goods or services. p. 20, 47 (emphasis added). NEED TO ALLEGE AGENCY Smith v. State Farm Mut. Auto. Ins. Co., 2013 U.S. Dist. LEXIS (N.D. Ill. Sept. 23, 2013) (Granting motion to dismiss for failure to sufficiently allege agency.) Defendant can be vicariously liable for a third-party telemarketer's behavior under (1) formal agency, (2) apparent authority, and (3) ratification theories. Smithfound that plaintiff needs to specifically identify which theory of liability applies here, and sufficiently allege facts to support any of those theories. Creates pleading problem when you need discovery before you can allege facts to support agency. Expect to see more motions to dismiss especially from debt collectors where contracts disclaim agency.
12 AGENCY Gomez v. Campbell-Ewald Co., 2014 U.S. App. LEXIS (9th Cir. 2014) Confirmed FCC authority that vicarious liability is imposed under federal common law principles of agency for violations of either section 227(b) or section 227(c) that are committed by third-party telemarketers. Thomas v. Taco Bell Corp., 2014 U.S. App. LEXIS (9th Cir. Cal. 2014) (Unpublished) Vicarious liability requires: 1. acted as agent; 2 Defendant controlled or had the right to control them -the manner and means of the text message campaign they conducted. In this case, the control was excercised by the [Chicago] Association, but TB. Ratification still requires an agency relationship first. Dish Network, L.L.C. v. FCC, 552 Fed. Appx. 1 (D.C. Cir. 2014) The FCC agrees that the "guidance" in question has no binding effect on courts, that it is not entitled to deference under Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984), and that "its force is dependent entirely on its power to persuade." [**4] FCC Br. 16; see id. at 19-20; Oral Arg. Recording at 21: This court therefore lacks jurisdiction to review that guidance Years Default SOL Applies Hawk Valley, Inc. v. Taylor, Civ. A. No. 10-cv-00804, 2012 U.S. Dist. LEXIS 47024, at *20 (E.D. Pa. Mar. 30, 2012) (the court concluded that based on Mims, the TCPA claim was "subject to the federal four-year 'catch-all' statute of limitations.") See also City Select Auto Sales, Inc. v. David Randall Assocs., Civ. A. No , 2012 U.S. Dist. LEXIS 16118, at *2-3 (D.N.J. Feb. 7, 2012) ("[A] four-year statute of limitations applies to actions under the Telephone Consumer Protection Act."); Still litigated because of prior split in authority, but should not survive Sawyer v. Atlas Heating and Sheet Metal Works, Inc., 642 F.3d 560, 561 (7 th Cir. 2011) applied federal default SoL28 U.S.C nd Circuit found state law SOL applicable and not 4 years under 28 U.S.C. 1658(a). Giovanniellov. ALM Media, LLC, 660 F.3d 587, (2d Cir. 2011) The 2 nd Cir. construed the TCPA's "otherwise permitted" provision, to mean TCPA claim "cannot be brought if not permitted by state law. Reasoning based on cases holding that there was no federal jurisdiction under the TCPA.