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  • District Court grants preliminary approval of TCPA class action settlement

    Courts

    On June 25, the U.S. District Court for the Northern District of California issued an order preliminarily approving a class action settlement between class members and a student loan management enterprise (defendants) accused of violating the Telephone Consumer Protection Act (TCPA) by using an automatic telephone dialing system (ATDS) to place calls to cellular telephones without receiving prior express written consent. Specifically, the plaintiff alleged that the defendants used a phone number previously used by the Department of Education (Department) to contact borrowers and which was listed on the Department’s forms, website, and billing statements, so that when class members returned calls under the impression that they were contacting the Department, the defendants collected and stored the phone numbers. The plaintiff further alleged that the stored numbers were used by the defendants to place calls using an ATDS for the purpose of “mislead[ing] class members into paying for student loan forgiveness and payment programs that were otherwise offered for free by the federal government.” According to the order, preliminarily approval of the settlement prevents possible further litigation and, given the current “‘wind-down’ mode” of one of the defendants, prevents a risk that class members seeking relief would be unable to collect on a large judgment. Under the terms of the settlement, the defendants have agreed to establish a $1.1 million settlement fund, as well as to injunctive relief that prohibits the defendants from using an ATDS to contact individuals without first receiving prior written consent.

    Courts Student Lending Settlement TCPA Class Action

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  • 3rd Circuit affirms summary judgment for internet company in TCPA action

    Courts

    On June 26, the U.S. Court of Appeals for the 3rd Circuit affirmed summary judgment for a global internet media company holding that the plaintiff failed to show the equipment the company used fell within the definition of “automatic telephone dialing system” (autodialer) based the recent holding by the D.C. Circuit in ACA International v. FCC. (Covered by a Buckley Sandler Special Alert.) The decision results from a lawsuit filed by a consumer alleging the company’s email SMS service, which sent a text message every time a user received an email, was an “autodialer” and violated the TCPA. The consumer had not signed up for the service, but had purchased a cellphone with a reassigned number and the previous owner had elected to use the SMS service. Ultimately, the consumer received almost 28,000 text messages over 17 months. In 2014, the district court granted summary judgment for the company concluding that the email service did not qualify as an autodialer. In light of the FCC’s 2015 Declaratory Ruling—which concluded that an autodialer is not limited to its current functions but also its potential functions—the 3rd Circuit vacated the lower court’s judgment. On remand, the lower court again granted summary judgment in favor of the company.

    In reaching the latest decision, the 3rd Circuit interpreted the definition of an autodialer as it would prior to the 2015 Declaratory Ruling in light of the D.C. Circuit’s recent holding, which struck down the part of the FCC’s 2015 Ruling expanding the definition to potential capacity. The appellate court held that the consumer failed to show that the email SMS service had the present capacity to function as an autodialer.

    Courts TCPA Autodialer FCC Third Circuit Appellate

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  • Plaintiffs must arbitrate with telecom provider over TCPA claims

    Courts

    On June 20, the U.S. District Court for the Northern District of Illinois granted a telecommunication company’s motion to compel arbitration and dismissed a putative class action alleging the company violated the Telephone Consumer Protection Act (TCPA). Specifically, the plaintiff brought an action against the telecommunications company for allegedly making unauthorized phone calls using prerecorded messages in an effort to reach account holders to collect unpaid bills. The company moved to compel arbitration because the plaintiff had entered into a “subscriber agreement,” which was provided to him via mail after he agreed to self-install his services, and the agreement requires arbitration of disputes. The court agreed with the company, holding that the arbitration provision of the subscriber agreement covered the dispute because the “Federal Arbitration Act does not require agreements to be signed, only written” and the plaintiff installed and used the telecommunication services, which constituted acceptance of the subscriber agreement.

    Courts Arbitration TCPA Robocalls Debt Collection

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  • Court denies plaintiff’s motion for summary judgment in TCPA action, questions accuracy of report citing number of robocalls

    Courts

    On May 21, the U.S. District Court for the Southern District of California denied a plaintiff’s motion for summary judgment against a solar company that she claimed made multiple unwanted robocalls to her cell phone, holding that questions remained about the accuracy of a report identifying the number of illegal calls the company allegedly placed. The plaintiff filed a putative class action complaint asserting that the company, in order to market products and services, violated the Telephone Consumer Protection Act (TCPA) when it used a “predictive dialer” to contact cell phone numbers the company bought from third parties. The plaintiff further claimed that none of the alleged call recipients had provided prior express consent to receive the calls, and that an expert retained by the plaintiff found that the company had made 897,534 calls to 220,007 unique cell phones. After the class was certified, the plaintiff moved for summary judgment, requesting that class members be awarded damages available under the TCPA of $1,500, or $500 per call.

    While the court determined that there is no argument as to the plaintiff’s TCPA claim concerning whether the company made telemarketing calls (and failed to receive prior express consent), a dispute remained over whether the plaintiff had “carried its burden of demonstrating” that the high number of calls cited in the report were actually made. First, the court stated that, because the company “stipulated that the [p]laintiff’s expert in fact reached a certain conclusion, it does not follow that [the company] stipulated to the accuracy of the conclusion.” Second, the court held that, since a reasonable jury could find the report’s “conclusions are flawed for any number of reasons,” a fact issue as to the report’s accuracy remained. A settlement conference has been set for June 6.

    Courts TCPA Class Action Robocalls Privacy/Cyber Risk & Data Security

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  • Court holds text message advertisements sent by internet domain provider do not violate TCPA

    Courts

    On May 14, the U.S. District Court for the District of Arizona granted an internet domain provider’s motion for summary judgment, holding that the platform used by the company to send text message advertisements did not qualify as an “autodialer” under the Telephone Consumer Protection Act (TCPA). The plaintiff filed a putative class action in 2016 asserting that the company, without his consent, sent him a single text message offering a discount on new products in violation of the TCPA. The company filed for summary judgment arguing that the platform it uses to send messages is not an “autodialer.” Citing to the recent D.C. Circuit decision in ACA International v. the FCC (covered by a Buckley Sandler Special Alert) which narrowed the FCC’s 2015 interpretation of “autodialer”, the Court agreed with the company. The Court held that the text was not sent automatically or without human intervention because the company had to “log into the system, create a message, schedule a time to send it, and perhaps most importantly, enter a code to authorize its ultimate transmission.”

    As covered by InfoBytes, the FCC’s Consumer and Governmental Affairs Bureau released a notice seeking comment on the interpretation of the Telephone Consumer Protection Act (TCPA) in light of the recent D.C. Circuit decision in ACA International.

    Courts TCPA Privacy/Cyber Risk & Data Security Autodialer

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  • FCC seeks comments on interpretation of autodialer under TCPA

    Federal Issues

    On May 14, the FCC’s Consumer and Governmental Affairs Bureau released a notice seeking comment on the interpretation of the Telephone Consumer Protection Act (TCPA) in light of the recent D.C. Circuit decision in ACA International v. FCC. (Covered by a Buckley Sandler Special Alert.) The notice requests, among other things, comment on what constitutes an “automatic telephone dialing system” (autodialer) due to the court setting aside the FCC’s 2015 interpretation of an autodialer as “unreasonably expansive.” Specifically, the FCC requests comment on how to interpret the term “capacity” under the TCPA’s definition of an autodialer (“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”) and requests comment on the functions a device must be able to perform to qualify as an autodialer, including how “automatic” the dialing mechanism must be. Additionally, the notice seeks comment on (i) how to treat reassigned wireless numbers under the TCPA; (ii) how a party may revoke prior express consent to receive robocalls; and (iii) three pending petitions for reconsideration, including the 2016 Broadnet Declaratory Ruling and the 2016 Federal Debt Collection Rules. Comments are due by June 13 and reply comments are due by June 28.

    On May 3, the U.S. Chamber of Commerce, the American Bankers Association, and over a dozen more trade associations petitioned the FCC seeking a declaratory ruling on the definition of an autodialer under the TCPA, previously covered by InfoBytes here.

    Federal Issues TCPA Consumer Finance FCC Agency Rule-Making & Guidance D.C. Circuit Appellate Autodialer

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  • Mortgage servicer must face TCPA allegations after court dismisses other claims

    Courts

    On May 2, the U.S. District Court for the Eastern District of New York granted in part and denied in part a mortgage loan owner and mortgage loan servicer’s motion to dismiss a consumer’s lawsuit alleging various violations of TILA, RESPA, FDCPA, TCPA and certain New York state laws. The court’s decision explains that the mortgage loan owner first initiated foreclosure proceedings against the consumer in 2009, but in August 2013 that action was dismissed and the parties executed a modification agreement. The consumer argues in the amended complaint that the mortgage debt is time-barred based on the six year statute of limitations to enforce the mortgage note, starting the clock with the 2009 foreclosure filing. The consumer alleges that after the statute of limitations expired, the mortgage servicer contacted the consumer by mail and by telephone to collect the mortgage debt, totaling over 600 calls placed by an autodialer and up to four threatening collection letters per month since 2015. The court, however, agreed with the mortgage companies that the execution of the 2013 modification agreement restarted the statute of limitations and therefore, the consumer’s alleged violations of New York state laws and the FDCPA failed because the mortgage debt was not time-barred. The court also held that the consumer failed to plead sufficient facts to support the alleged violations of TILA, RESPA, and New York’s General Business Law. In contrast, the court denied the mortgage servicer’s motion to dismiss the consumer’s claim under the TCPA, holding that the mortgage application signed by the consumer did not clearly consent to contact by an autodialer on his cell phone.

     

    Courts Mortgages TILA RESPA TCPA Autodialer

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  • Trade groups petition FCC to clarify definition of autodialer under TCPA

    Federal Issues

    On May 3, the U.S. Chamber of Commerce, the American Bankers Association, and over a dozen more trade associations petitioned the FCC seeking a declaratory ruling on the definition of an “automatic telephone dialing system” (autodialer) under the Telephone Consumer Protection Act (TCPA). The petition results from the recent D.C. Circuit decision (covered by a Buckley Sandler Special Alert), which struck down the FCC’s 2015 definition of an autodialer as “unreasonably expansive” because it failed to adequately describe what functions qualify a device as an autodialer. The petition seeks clarity on the definition of an autodialer that is subject to Section 227(b) of the TCPA, and specifically requests the FCC state that in order to be considered an autodialer, the equipment must “store or produce numbers to be called, using a random or sequential number generator, and dial such numbers.” Additionally, the petition requests that only calls made using the actual autodialer capabilities be subject to the restrictions of the TCPA. The petitioners argue that adopting the requested definition would “ensure that legitimate businesses can contact their consumers without fearing a lawsuit under Section 227(b) of the TCPA.”

    Federal Issues TCPA Consumer Finance FCC Autodialer

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  • 9th Circuit amended opinion holds company not vicariously liable under TCPA

    Privacy, Cyber Risk & Data Security

    On April 4, the U.S. Court of Appeals for the 9th Circuit issued an amended opinion to further affirm a district court’s decision to grant summary judgment in favor of a defendant concerning allegations that it was vicariously liable for telemarketing activity in violation of the Telephone Consumer Protection Act (TCPA). The three-judge panel held that the defendant, who sells vehicle service contracts (VSCs) through automobile dealers and “marketing vendors,” was not vicariously liable under the TCPA for calls made by telemarketers employed by a company that sold VSCs for the defendant and multiple other companies. Last August, the three-judge panel determined that the company’s telemarketers acted as independent contractors, rather than as the defendant’s agents. In amending their opinion, the three-judge panel further determined that the telemarketers lacked actual authority (under express language contained within the parties’ contract) to place the unlawful calls, and that the defendant “exercised insufficient control over the manner and means of the work to establish vicarious liability under the asserted theory.”

    Privacy/Cyber Risk & Data Security Courts TCPA Appellate Ninth Circuit

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  • 9th Circuit affirms dismissal of claims alleging survey provider violated TCPA

    Courts

    On March 29, the U.S. Court of Appeals for the 9th Circuit affirmed a district court’s decision to grant summary judgment in favor of a patient satisfaction survey provider (defendant), concluding that a plaintiff's signed enrollment form with her health insurance provider meant she granted “prior express consent” to receive calls from the defendant. According to the opinion, the plaintiff accused the defendant of allegedly violating the Telephone Consumer Protection Act (TCPA) when it used an automatic telephone dialing system to repeatedly call her to inquire about the quality of her experience with a network physician. She later challenged the dismissal of her suit, arguing that the calls fell outside the scope of consent. However, in agreeing with the district court’s decision, the three-judge panel held that by providing her phone number on an insurance enrollment form that permitted the insurer to share her information for “quality improvement” and other purposes, the plaintiff had provided the level of consent required by the TCPA to receive calls from the defendant. While the court acknowledged that the plaintiff “could not have known the identity of the specific entity that would ultimately call her,” by authorizing the insurance company “to disclose her phone number for certain purposes, she necessarily authorized someone other than [the insurance company] to make calls for those purposes. Specifically, she authorized calls from entities to which [the insurance company] disclosed her information.” According to the panel, the defendant fell within that category.” The panel also rejected the plaintiff’s argument that the calls violated the TCPA because the defendant failed to demonstrate that it called her on the insurance company’s behalf, finding that there is “no statutory or logical basis for imposing such a requirement.”

    Courts Appellate Ninth Circuit TCPA

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