TCPA AND WIRELESS MARKETING AT THE FCC, THE FTC, AND IN THE COURTS. William B. Baker Wiley Rein LLP September 19, 2014 San Jose

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2 TCPA AND WIRELESS MARKETING AT THE FCC, THE FTC, AND IN THE COURTS William B. Baker Wiley Rein LLP September 19, 2014 San Jose

3 Why You Should Care Hundreds of lawsuits Hundreds of $millions in payouts Capital One: $75 million Bill Me Later: $9.9 million Sprint: $7.5 million L.A. Clippers: $5 million Insurance coverage uncertain

4 Different rules for different media Subject to variety of federal (and state) laws enacted over 30 years with non smartphones in mind Opt-in or opt-out Consent: oral, written or none Rules vary with technology Rules vary with format of address Enforcement mechanisms vary

5 Which laws apply depends on the technology used Voice Text TCPA, Do Not Call, Telemarketing Sales Rule TCPA, Do Not Call CAN-SPAM (FTC & FCC) Mobile App FTC Section 5; (TSR?) Browser FTC Section 5

6 TCPA, 47 U.S.C. 227(b)(A) Unlawful... to make any call... using any automatic telephone dialing system or an artificial or prerecorded voice--... (iii) To any telephone number assigned to a paging service, cellular telephone service... for which the called party is charged for the call FCC can exempt calls that are not charged to user.

7 What Is A Call Voice, text YouMail FCC petition (software-based menu of advanced voic features) VoAPPS FCC petition 7/31/14: service leaves message in wireless vm without calling device

8 What is an ATDS? 47 USC 227(a)(1) The term automatic telephone dialing system means equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers. FCC (2003 & 2007): capacity to store or produce numbers using a random or sequential number generator and to dial without human intervention FCC has focused on capability, not actual usage, due to predictive dialers

9 Many have asked FCC to Reconsider or Modify ATDS Definition Cargo Airline Ass n (2014): exempted package delivery text notifications 22 petitions for reconsideration/clarification/exemption currently pending at FCC. 9 address ATDS Some seek to loosen: PACE, ACA, TextMe, Glide Talk: limit capacity to configuration when calls placed Or to broaden: Fried: if combined equipment collectively can have capacity to store or produce numbers and dial at random, sequentially, or from a database

10 Court Rulings Are Mixed Compare Satterfield v. Simon & Schuster (9 th Cir. 2009) & Sherman v. Yahoo (S.D. Cal. 2014) (potential) with Gragg v. Orange Cab (W.D. Wash 2014) (present capability required) & Hunt v. 21 st Mortgage Co. (N.D. Ala. 2013) (no liability if substantial modification required to produce calls from number generator) Sterk v. Path (N.D. Ill. 2014) (stored #s without human intervention numbers provided by 3d persons); interlocutory review pending

11 TCPA: Prior express consent exception FCC (1992) (knowing release of phone number is permission) absent instructions to the contrary Consents do not expire FCC (2012) required PEC for telemarketing to be in writing as of 10/16/13 and freely given FCC (2012) also eliminated 20-year old EBR exception FCC has exempted entities subject to HIPAA

12 FCC Rulings on Prior Consent GroupMe (2014): prior express consent to nontelemarketing texts can be obtained by an intermediary SoundBite (2012) (permitting one-time text to confirm revocation of consent)

13 And in the Courts Courts have found consent in strange places Provided for verification purposes 10 years before the calls were made. Kolinek v. Walgreen Co. (N.D. Il ) Airline web form. Baird v. Sabre, Inc. (C.D. Cal. 2014)(transactional texts) Blood donor form. Murphy v. CDI Biologicals Orlando (M.D. Fla. 2013).

14 Can consent be revoked? Yes. Gager v. Dell (3d Cir. 2013) Implicitly: SoundBite (FCC 2012) (onetime text to confirm revocation of consent) Maybe not: Santander Consumer USA FCC petition re non-telemarketing calls and texts

15 FCC: Pending Petitions 7 out of 22 as of 9/15 address prior written consent ACA: Prior express consent/debt calls Satcom: Mobile numbers provided prior to 2012 FCC order Coalition: PWC provided prior to 10/16/2013 DMA: Asks for forbearance for consents obtained prior to 10/16/2013 RILA: On-Demand text services

16 THE EFFECT OF NUMBER REASSIGNMENT ON CONSENT Calls to ported or reassigned numbers (6 petitions) United Healthcare: seek exception/exemption for informational calls to numbers ported to wireless unbeknownst to caller ACA: wants safe harbor for autodialed nontelemarketing calls to wrong numbers Comcast: exception for any calls to reassigned numbers where caller had PEC and caller unaware of reassignment

17 Stage Stores: asks exception for call to wireless number for which prior express consent existed before reassigned without notice/knowledge of caller Rubio s (8/11): seeks exception where employer has PEC to remote text messaging alerts to employees, then number is reassigned without its knowledge.

18 And in the Courts: Consent to calls to someone else s phone Soppet (7 th Cir. 2012): called party means called party Osorio (11 th Cir. 2014): current subscriber (housemate s cell number provided on credit application agency?) Lamont (D.N.H. 2014) (spouse cannot consent for telemarketing to other spouse s cell phone)

19 Searching for Defendants DISH Network (FCC 2013): sellers can be vicariously liable for actions of its telemarketers Extent of vicarious liability Lucas (FCC petition): person assisting telemarketer and knows or consciously avoids knowing of TCPA violations Smith v. State Farm (N.D. Ill. 8/11/2014)

20 s: CAN-SPAM Act FTC (2004): Opt-out for commercial s FCC (2004): Opt-in for Mobile service commercial messages Addressed to wireless domains express prior authorization Can be oral, unlike TCPA PEC FCC: Texts are calls not s

21 Do Not Call Mobile Devices FTC established registry under TCFAPA & TSR FCC extended scope under TCPA FCC already had company-specific Mobile numbers eligible EBR is exception to Do Not Call, but not to ATDS Limited safe harbor for erroneous calls to mobile devices on DNC registry

22 Text Marketing FCC: Texts are calls Accord Joffe v. Acacia Mortgage (Ariz. 2005); Satterfield (9 th Cir.) TCPA & TSR apply: ATDS & DNC restrictions SoundBite (FCC 2012): confirmatory texts ok w/in 5 minutes

23 FTC & Mobile Apps Mobile Apps Shopping Apps (Aug. 2014) Dot.com Disclosures (Mar. 2013) NTIA multistakeholder process Is location sensitive Mobile App Privacy Disclosures (Feb. 2013) COPPA: yes, and specifically applies to mobile apps

24 Private Lawsuits Two private rights of action under TCPA ATDS/prerecorded to mobile ($500) Do Not Call ($500) Penalties per call Treble damages for knowing/willful Class actions FTC Act/TCFAPA enforced by agency. Insurance coverage?

25 For Further Info: The Complications of Doing Mobile Marketing Legally, Journal of Internet Law (Feb. 2014) Telemarketing and Robocalls, FCC Marketing Your Mobile App: Get It Right from the Start, FTC Staff (April 2013) marketing-your-mobile-app Mobile Privacy Disclosures: Building Trust Through Transparency: An FTC Staff Report, (Feb. 2013)