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Redial: 2017 TCPA Year-in-Review
Analysis of critical issues and trends in TCPA
compliance and litigation
Notes
Redial: 2017 TCPA Year-in-Review
Introduction
Eversheds Sutherland is pleased to present REDIAL, our annual in-depth analysis of key
Telephone Consumer Protection Act (TCPA) issues and trends. REDIAL reports on issues
affecting the industries that face potential TCPA liability.
Did you know?
51%
100,000
46%
Percent of US households that are
The number of cell phone numbers
The percentage increase in TCPA
wireless/cell only and without a
that are reassigned each day,
cases since the FCC’s July 2015
landline.
according to the FCC.
order.
Eversheds Sutherland industry knowledge and focus
Few industries are immune from TCPA
the law and our clients’ businesses,
liability. In 2017, the insurance, financial
allowing us to design compliance and
services, energy and health sectors were
risk management programs uniquely
uniquely affected by TCPA litigation.
suited to our clients’ specific needs
REDIAL analyzes key legal issues
and to spot issues before they result
affecting these and other industries.
in litigation. When litigation is filed,
Eversheds Sutherland tracks daily all TCPA
cases filed across the country. This allows
us to spot trends and keep our clients
focused and informed. We understand
Eversheds Sutherland’s TCPA team has
the depth of experience necessary to
efficiently and effectively defend its
clients’ interests in court.
Why Eversheds Sutherland?
Strength in representing
Strength in knowing
Strength in advising and
Strength as trial lawyers
leading companies worldwide
our clients’ businesses
counseling our clients on
in efficiently and effectively
TCPA compliance
representing our clients in class
actions filed in state and federal
courts across the country
Analysis of critical issues and trends arising from the Telephone Consumer Protection Act
Redial: 2017 TCPA Year-in-Review
Contents
TCPA regulatory developments
Blink and you’ll miss it: TCPA implications of appointment of new FCC chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
No harm, no foul? FCC seeks comment on direct-to-voicemail services and the TCPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
All dressed up and nowhere to go: Ringless voicemail FCC petition withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Getting the fax straight
Opting out: TCPA fax opt-out requirement struck down—DC Circuit says FCC can’t require opt-out notices on solicited faxes. . . . 11
Just the fax: DC circuit rejects FCC requirements of opt-out language on solicited faxes under the TCPA. . . . . . . . . . . . . . . . . . . . . . 12
DC circuit denies rehearing of TCPA fax decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
File not found: Lack of fax or call logs doom class ascertainability in TCPA cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Industry impact
TCPA and telecommunications – See no evil: Willful blindness costs dish network $341 million for TCPA violations. . . . . . . . . . . . . 17
TCPA and professional sports – Got game? privacy exclusion results in denial of coverage in L.A. Lakers TCPA suit. . . . . . . . . . . . . . 19
TCPA and nonprofits – Calling toll-free: Special rules for nonprofits offer safe harbor from TCPA liability. . . . . . . . . . . . . . . . . . . . . . . 20
Litigation review
Untangling the cord: seeking clarity on the TCPA’s definition of autodialer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Locked-in: TCPA consent not revocable if a term of contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Cutting the cord: Can courts trim TCPA statutory damages? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Call waiting? Challengers continue to await ruling in appeal of 2015 TCPA order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Hot issues of 2018
Dialing-in: TCPA hot issues for 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Analysis of critical issues and trends arising from the Telephone Consumer Protection Act
TCPA regulatory developments
Redial: 2017 TCPA Year-in-Review
TCPA regulatory developments
Blink and you’ll miss it: TCPA implications of appointment of new FCC chairman
Blink and you’ll miss it: TCPA implications
of appointment of new FCC chairman
With all the pomp, circumstance and general political commotion surrounding the inauguration
of President Donald J. Trump on January 20, 2017, it was easy to overlook one of his first acts
in office: the appointment of Ajit Pai as the new Chairman of the Federal Communications
Commission (FCC). Pai, whose appointment requires no Congressional confirmation because
he already sits on the Commission, replaces former Chairman Tom Wheeler, who stepped down
from the Commission, leaving a 2-1 majority in favor of Republicans.
The shift in power at
the FCC will likely have
significant implications for
the TCPA. Commissioner
Ajit Pai’s colorful—and
rather blistering—dissent
to the FCC’s July 2015
Omnibus TCPA Order
provides insight on the
possible direction the
newly configured FCC
could take on certain
TCPA hot-button issues.
The shift in power at the FCC will likely
have significant implications for the
Telephone Consumer Protection Act
(TCPA). Commissioner Pai’s colorful—
and rather blistering—dissent to the
FCC’s July 2015 Omnibus TCPA Order
(the Order) provides insight on the
possible direction the newly configured
FCC could take on certain TCPA
hot-button issues.
In his dissent, now-Chairman Pai did not
mince words, echoing the feelings of
many companies and defense counsel
when he noted that the “Order will make
abuse of the TCPA much, much easier.
And the primary beneficiaries will be
the second call. What is troubling for
trial lawyers, not the American public.”
callers is that the recipient of the call
Chairman Pai’s overarching issue with
has no obligation to inform the caller
the Order was its failure to target
of the reassigned status of the number.
telemarketing, which he sees as the
Coupled without a “good faith” harbor
primary goal of the TCPA. Instead, the
for the caller, this allows for recipients to
Order expanded the reach of the TCPA
accept countless calls from an unwitting
in ways Chairman Pai found to be anti-
caller and then file a TCPA lawsuit.
consumer and anti-business. He lodged
Chairman Pai referred to this approach as
three specific objections to the Order.
“a veritable quagmire of self-contradiction
First, Chairman Pai noted that the “Order
and misplaced incentives.”
dramatically expands the TCPA’s reach”
Third, he criticized the Order’s “carve-
by interpreting “automatic telephone
out for the prison payphone industry…
dialing system” (ATDS) in such a way
[which] lets that industry repeatedly
as to capture all technology with the
make prerecorded voice calls to
“capacity” to dial automatically. He
consumers in order to ‘set up a billing
characterized this interpretation as
relationship’ for future services.” While
“transform[ing] the TCPA from a
this is a narrow exception, Chairman Pai
statutory rifle-shot targeting specific
slammed it as “provid[ing] a roadmap for
companies … into an unpredictable
those seeking a lawful way to avoid our
shotgun blast covering virtually all
telemarketing rules.”
communications devices.”
A challenge to the FCC’s 2015 Order is
Second, Chairman Pai criticized the
currently pending before the US Court of
Order’s ruling on “prior express consent.”
Appeals for the DC Circuit following oral
The Order effectively instituted a one-
argument in late 2015.
and-done approach to consent, allowing
for TCPA liability if a caller made more
than one call to a recipient who did not
provide consent. Under this approach,
if a number is reassigned after consent
is given, consent no longer exists, and
the new subscriber can file a suit after
Analysis of critical issues and trends in TCPA compliance and litigation
7
TCPA regulatory developments
No harm, no foul? FCC seeks comment on direct-to-voicemail services and the TCPA
No harm, no foul? FCC seeks comment
on direct-to-voicemail services and the TCPA
Does a prerecorded message delivered directly to the recipient’s voicemail constitute a “call”
subject to the restrictions of the Telephone Consumer Protection Act (TCPA)? The Federal
Communications Commission (FCC) considered this issue for the first time and solicited
comments on a petition for declaratory ruling filed by a company that provides delivery of
voicemails to cell phone accounts without calling those numbers. Regardless of what the service
is called—direct-to-voicemail (DTV), ringless voicemail or something else depending on the
service provider—the process is generally the same. The technology allows a company to drop a
prerecorded message into the voicemail box of a consumer (or the voicemail boxes of potentially
millions of consumers) by connecting to a telephone company’s voicemail server via a landline.
After the voicemail has been deposited by the DTV provider, the consumer receives a notification
that a voicemail has been left for the consumer on the carrier-maintained voicemail box.
The petition argued that by going through
the telephone company’s landline in this
manner, the DTV provider avoids directly
calling the consumer’s phone line, and
thus the messages do not constitute
autodialed or prerecorded calls made
directly to a cellular phone subscriber.
Direct-to-Voicemail technology allows companies to place
messages in a voicemail box without calling the recipient’s
phone number, raising a question of whether the message
constitutes the call violates the TCPA’s restrictions on
autodialed and prerecorded calls.
Since the consumer’s phone has never
been called, and therefore there has been
the recipient. For telemarketing purposes,
If the FCC grants the declaration as
no charge to the consumer, the petition
consent must be in writing and meet
requested, it will afford companies in a
argued that these communications do
specific criteria. In responding to the
host of industries the ability to contact
not violate the TCPA. Depending on the
DTV petition, the FCC was expected to
their customers and potential customers
consumer’s cell phone service, there
consider whether placing voicemails into
without risking liability under the TCPA.
may be a charge for accessing the
customers’ voicemail boxes constitutes
To date, the TCPA has been broadly
voicemail, whether it is accessed by
a “call” under the TCPA and whether
interpreted. With the appointment of
calling the cell phone company’s server
voicemail services should remain an
Ajit Pai as Commissioner and with a
or by receiving a transcript over text
“enhanced or information service”
Republican-controlled Commission,
or email. The petition argued that any
provided by telephone carriers, and
this petition was being watched to see
charges relating to a consumer viewing
therefore not governed by the FCC’s
whether the FCC will take a narrower,
or listening to the voicemail would not
rules regarding cell phone carriers.
more business-friendly approach to the
be covered under the TCPA because
The FCC has considered voicemail an
TCPA than it has over the last several
the consumer took the affirmative step
enhanced service for nearly 40 years.
years under a Democratic-controlled
to access the voicemail box.
DTV services are increasingly used, for
Commission.
example, by debt servicing companies,
The TCPA prohibits autodialed or
although a favorable FCC declaration
prerecorded non-marketing calls to cell
could potentially expand the scope
phones without the express consent of
of DTV use.
8
Redial: 2017 TCPA Year-in-Review
TCPA regulatory developments
All dressed up and nowhere to go: Ringless voicemail FCC petition withdrawn
All dressed up and nowhere to go:
Ringless voicemail FCC petition withdrawn
In the face of significant opposition from virtually all quarters, All About The Message, LLC (AATM),
has withdrawn its petition asking the Federal Communications Commission (FCC) for a
declaratory ruling that a prerecorded message delivered directly to a recipient’s voicemail does
not constitute a “call” subject to the restrictions of the Telephone Consumer Protection Act
(TCPA). During the FCC’s open comment period, opponents of the ringless voicemail technology
(also known as direct-to-voicemail, or DTV) came out in full force against AATM’s proposed ruling.
AATM quietly withdrew the petition on June 20, 2017, leaving the issue unresolved.
AATM’s petition was the first of its kind to be taken up by the
The issue quickly became political. The Republican National
FCC on the issue of whether a ringless voicemail falls within
Committee and lobbyists with the US Chamber of Commerce
the scope of the TCPA, which prohibits autodialed or
chimed in to support the petition, arguing that the ringless
prerecorded non-marketing calls to cell phones without the
technology is not intrusive, and that an adverse finding by
express consent of the recipient. The petition argued that by
the FCC would infringe on the First Amendment rights of
going through a telephone company’s landline to place a
companies like AATM. The issue is not expected to go away.
message in a recipient’s voicemail—without actually calling
The withdrawal of the petition in a single-sentence letter sent
the recipient—the service could not be considered a “call”
to the FCC leaves the issue open for a future ruling by the
under the TCPA. Although there could be a subsequent
Commission or possibly the courts.
charge to the customer for accessing the voicemail, the
petition asserted, any such charges would not be covered
by the TCPA because the consumer would need to take an
affirmative step to access the voicemail.
Without explanation, the petition for the FCC to review Direct-to-Voicemail technology was
withdrawn, leaving open the question of whether and how the use of DTV software can run afoul
of the TCPA.
During the FCC’s comment period, which ended on May 18,
2017, consumer advocate groups, some state attorneys
general, and even a handful of US Senators advocated against
the AATM petition. These opponents of the petition argued
that ringless voicemails circumvent the spirit and purpose
of the TCPA to prevent unwanted robocalls, and open the
floodgates for companies to place unlimited unwanted calls
to consumers. Opponents also stated that the technology
improperly “shifted the blame for the final delivery” of
unwanted messages to the recipient.
Analysis of critical issues and trends in TCPA compliance and litigation
9
Getting the fax straight
Redial: 2017 TCPA Year-in-Review
Getting the fax straight
Opting out: TCPA fax opt-out requirement struck down—DC Circuit says FCC can’t require opt-out notices on solicited faxes
Opting out: TCPA fax opt-out requirement
struck down—DC Circuit says FCC can’t
require opt-out notices on solicited faxes
The US Court of Appeals for the DC Circuit invalidated a rule issued by the Federal
Communications Commission (FCC) in 2006 requiring businesses to include opt-out notices
when the recipient has consented to receive the fax. The court held that the FCC lacked the
authority under the Telephone Consumer Protection Act to require such notices given that the
Junk Fax Prevention Act of 2005 only requires that notices be placed on unsolicited faxes. The
court concluded that the FCC’s rule requiring opt-out notices on solicited faxes was improper.
The FCC had argued under former
Chairman Tom Wheeler (who has since
been replaced by Chairman Ajit Pai)
that it could take an action, including
regulating notices on solicited faxes, “so
long as Congress has not prohibited the
The D.C. Circuit held that the FCC lacked the authority under
the TCPA to require opt-out notices because the Junk Fax
Prevention Act of 2005 only requires that notices be placed
on unsolicited faxes.
agency action in question.” In rejecting
that argument, the opinion reasoned
that the “theory has it backwards as a
The decision is an important step towards
matter of basic separation of powers
providing businesses with more common
and administrative law” and that the
sense guidance in complying with laws
“FCC may only take action that Congress
applicable to customer communications.
has authorized.”
Analysis of critical issues and trends in TCPA compliance and litigation
11
Getting the fax straight
Just the fax: DC circuit rejects FCC requirements of opt-out language on solicited faxes under the TCPA
Just the fax: DC circuit rejects FCC requirements
of opt-out language on solicited faxes under
the TCPA
In a March 31, 2017 ruling, the US Court of Appeals for the DC Circuit invalidated a 2006 Federal
Communications Commission (FCC) rule requiring businesses to include opt-out notices on
solicited fax advertisements sent with the express permission of the recipient. The court, in Bais
Yaakov of Spring Valley et al. v. FCC, 14-1234 (D.C. Cir. Mar. 31, 2017), held that the FCC lacked
the authority under the Telephone Consumer Protection Act (TCPA) to require opt-out notices on
solicited faxes because the Junk Fax Prevention Act of 2005 (JFPA)1 requires only that opt-out
notices be included on unsolicited faxes. For the majority of the court, allowing the FCC to
promulgate a rule requiring opt-out notices on solicited faxes was beyond the scope of the
authority delegated by Congress. The ruling clarifies how businesses can communicate with
customers via fax and provides relief for businesses defending against TCPA/JFPA claims based
on a failure to include opt-out language in solicited faxes.
Anda, Inc., a global distributor of
the inclusion of the notices on all fax
and at oral argument, the FCC argued
pharmaceuticals and one of the petitioners
advertisements, regardless of whether
that it could regulate notices on solicited
in Bais Yaakov, was sued in a class action
the recipient had given permission.2 The
faxes, “so long as Congress has not
for sending fax advertisements to
FCC subsequently denied an Application
prohibited the agency action in
pharmacies without the opt-out notice
for Review along with several other
question.” Specifically, the FCC relied on
required under the FCC rule, even
petitions regarding the same issue,
the “express invitation or permission”
though the pharmacies consented to
confirming its position that all fax
language in the statute to argue that
receiv …
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