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May 2015 TCPA Compliance Monitoring Report
For this month’s TCPA update, we have reviewed several recent court decisions related to various aspects of the Telephone Consumer Protection Act. This is an active area of litigation, and plaintiffs have found there is a relatively low burden for bringing claims.
These cases provide insight into how courts evaluate TCPA claims. Of course, every case is different, and clients should not rely on these cases as predictors of how a court would rule on a future case. If you have any questions after reviewing these cases and our monthly TCPA monitor, please contact Jane Wagner: firstname.lastname@example.org – 703-714-1321; Linda McReynolds: email@example.com – 703-714-1318; or Robert Jackson: firstname.lastname@example.org – 703-714-1316.
Providing a Phone Number for Purposes of Cancelling an Account May Not Be Consent Under TCPA
After the death of his mother in law in 2008, Albert Nigro called National Grid to discontinue power service and provided his phone number as part of the cancellation process. Later, Nigro was contacted by a debt collection agency using automated phone calls regarding a $68 balance on the National Grid account of which Nigro had previously been unaware. In Nigro v. Mercantile Adjustment Bureau, LLC, Nigro argues that he did not provide prior consent for the automated calls.
Agreeing with Nigro, the Second Circuit reversed a lower court’s dismissal of the complaint. The court made clear that given that Nigro did not know of the debt, was not a consumer with a relationship with National Grid, and as a result did not consent to the calls, the calls were prohibited by the TCPA. The case serves as a reminder that a customer who provides a telephone number may not be consenting to phone calls for TCPA purposes. (See Nigro v. Mercantile Adjustment Bureau, LLC, 769 F.3d 804 (2d Cir. 2014)).
Triple the Damages?
It Can Be Costly to “Knowingly” or “Willfully” Target an Emergency Line or to Send Unsolicited Faxes
A health care provider in Alabama brought a lawsuit against a marketing company for sending two faxes to his emergency telephone line. The doctor claimed that he should receive treble (or triple) damages for the violations because they were made “willfully or knowingly.”
The Eleventh Circuit declined the invitation in its March 13, 2015, ruling. The court made clear that if the marketer did not know they were using their automatic telephone dialing system to call an emergency line; and if the marketer did not know that the faxed ad was unsolicited, there cannot be treble damages. In the case, the doctor failed to make that showing. (See Lary v. Trinity Physician Fin. & Ins. Servs., 780 F.3d 1101 (11th Cir. 2015)).
FCC Has Not Clarified Whether TCPA Prohibits Calls To New Users of Previously Assigned Numbers
The Second Circuit has stayed the case of Sterling v. Mercantile Adjustment Bureau, LLC, in anticipation of an FCC ruling on whether the TCPA prohibits automated calls to new and nonconsenting users of a cellular telephone number previously assigned to a consenting user.
In the case, a debt collection agency placed calls to a cellular number to collect on a debt, without realizing the number had been recycled and reassigned. The US District Court for the Western District of New York took an uncompromising approach in its ruling in March 2014: “[T]he moral is that companies who make automated calls bear the responsibility of regularly checking the accuracy of their account records or placing intermittent live verification calls.” After brief consideration of the appeal, the Second Circuit stayed the case in March 2015 in case the FCC decides to take a different tack. (See lower court ruling, Sterling v. Mercantile Adjustment Bureau, LLC., 2014 WL 1224604 (W.D.N.Y., Mar. 25, 2014).
Third Party Liability
Direct Liability Possible For TCPA Violations Made By Independent Contractors
Last year, the FCC wrote to the US Court of Appeals for the Eleventh Circuit to say that the TCPA allows a plaintiff to recover damages from a defendant who did not sent a fax to the plaintiff, but whose independent contractor did. On March 9, 2015, the court agreed. In the case of Palm Beach Golf Center-Boca, Inc. v. Sarris, a dentist hired a marketing manager and gave him “free rein” to market the dental practice. The marketing manager then paid a third party to send 7,000 faxes advertising the dental practice. The court sided with the plaintiff and FCC in the TCPA case that followed, writing, “a person whose services are advertised in an unsolicited fax transmission, and on whose behalf the fax is transmitted, may be held liable under the TCPA’s ban on the sending of junk faxes.” (See Palm Beach Golf Ctr.-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th Cir. 2015)).
Capacity To Dial Numbers Without Human Intervention a Key Function of an Autodialer
A federal district court judge determined early this year that an autodialer for purposes of the TCPA must have the current capacity to dial numbers without human intervention. The decision was issued despite the FCC’s inaction on the very same issue in several pending petitions.
The case originated with welcome texts to a consumer sent via the GroupMe service. The consumer did not exercise opt-out options, and when he received a text saying, “We haven’t heard from you … you can always get back in by replying to this text,” the consumer replied “In.” The consumer brought a TCPA action against GroupMe for the initial welcome messages.
GroupMe argued in its recent motion for summary judgment that its product was not an autodialer. The company allows users to set up accounts and send text messages inviting other users to their group. Similarly, TextMe, Inc. and the Professional Association for Customer Engagement (PACE) have argued in petitions before the FCC that a system is not an autodialer if it does not have the capacity to dial numbers without human intervention. The FCC has not yet ruled on those petitions.
In this case, the court agreed with GroupMe. The court said a system is only considered an “autodialer” if it has the present capacity to dial numbers randomly or sequentially, regardless of any potential capacity if the technology were reconfigured. And the court made clear that when human intervention is present, the system is not an autodialer. The case is currently pending an appeal to the Ninth Circuit US Court of Appeals. (See Glauser v. GroupMe, Inc., 2015 WL 475111 (N.D. Cal. Feb. 4, 2015)).TCPA Litigation Update