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9th Circuit affirms TCPA dismissal
On August 8, the Ninth Circuit affirmed a district court’s dismissal of a cause of action under the TCPA, wherein the plaintiff alleged that the defendant sent her three mass marketing text messages that utilized “prerecorded voice[s]” even though there was no audible component. Under the TCPA, it is unlawful “to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using…an artificial or prerecorded voice” to a cell phone. In affirming the dismissal, the 9th Circuit reasoned that the ordinary meaning of “voice” encompasses only audible sounds, and that the context of the statute confirmed the ordinary meaning. Specifically, it noted that Congress defined “caller identification information” as “information regarding the origination of a call made using a voice service or a text message sent using a text messaging service.” The court reasoned that if Congress intended “voice” to include inaudible text messages, the term “text message” would be surplusage and “Congress would have written the statute in a manner contrary to a basic canon of statutory interpretation.” The 9th Circuit went on to reject plaintiff’s remaining arguments, including plaintiff’s legislative history and FCC deference arguments because the statute was unambiguous.
11th Circuit changes course, says one text message sufficient for TCPA standing
On July 24, the full U.S. Court of Appeals for the Eleventh Circuit unanimously held that a plaintiff who receives a single, unwanted text message has standing to sue the sender of the message under the TCPA. The decision departs from precedent set by the same court in 2019, in which it determined in a different case that receiving one unsolicited text message is not enough of a concrete injury to establish standing under the statute. (Covered by InfoBytes here.) Plaintiff filed a putative class action against a web-hosting company alleging the defendant violated the TCPA by using a prohibited autodialer to send promotional calls and text messages selling services and products. The settlement agreement reached between the parties also resolved claims brought against the defendant by parties in two other actions.
During settlement discussions, the district court cited the aforementioned 2019 11th Circuit decision and asked the parties to brief how their case, which includes individuals who received only one text message, was distinguishable from the 2019 action. The district court ultimately ruled that class members who only received one text message “lacked a viable claim” in the 11th Circuit under the 2019 precedent, but noted that because the case involves a nationwide settlement, “those class members ‘do have a viable claim in their respective Circuit.’” An objector to the settlement appealed the ruling on various grounds to the 11th Circuit, which dismissed the appeal for lack of jurisdiction and held that the class definition did not meet Article III standing requirements, as it included individuals who received a single text message. Plaintiff moved for rehearing en banc, asking the 11th Circuit to reevaluate the 2019 precedent and to clarify the elements necessary to pursue a TCPA claim.
Reviewing de novo the threshold jurisdiction question of whether plaintiffs have standing to sue, the 11th Circuit said that “the harm that underlies a lawsuit for the common-law claim of intrusion upon seclusion” shares a “close relationship” with a “traditional harm.” The appellate court explained that because “[b]oth harms reflect an intrusion into the peace and quiet in a realm that is private and personal[,] [a] plaintiff who receives an unwanted, illegal text message suffers a concrete injury. Because [plaintiff] has endured a concrete injury, we remand this matter to the panel to consider the rest of the appeal.” Recognizing that a single unsolicited text message may not be considered “highly offensive to the ordinary reasonable man” it “is nonetheless offensive to some degree to a reasonable person.” The 11th Circuit also referred to seven other circuit courts that “have declined to consider the degree of offensiveness required to state a claim for intrusion upon seclusion at common law,” and have instead chosen to conclude that “receiving either one or two unwanted texts or phone calls resembles the kind of harm associated with intrusion upon seclusion.” Moreover, the 11th Circuit noted that Congress is given authority under the Constitution “to decide what degree of harm is enough so long as that harm is similar in kind to a traditional harm,” which is “exactly what Congress did in the TCPA when it provided a cause of action to redress the harm that unwanted telemarketing texts and phone calls cause.”
4th Circuit upholds sanctions against debt relief operation
On June 23, the U.S Court of Appeals for the Fourth Circuit upheld a default judgment entered against a debt relief operation and related individuals accused of violating the TCPA and the West Virginia Consumer Credit and Protection Act (WVCCPA). Plaintiff-appellee alleged she received multiple telemarketing phone calls regarding debt relief offered through lower interest rates on credit cards from the defendants (including the appellants). During discovery, defendants allegedly engaged in “evasive discovery tactics” and “relentless sandbagging,” which resulted in a magistrate judge entering multiple orders to compel. Defendants allegedly continued to call the plaintiff-appellee for more than a year after she filed her initial complaint. Additional defendants (including some of the appellants) were added via amended complaints as she discovered defendants had allegedly “formed a vast and complex web of corporate entities.”
The district court eventually sanctioned the appellants and struck their defenses for, among other things, engaging in a “pattern of concealing discoverable material” and failing to obey court orders. Appellants filed a motion for reconsideration, claiming the sanctions were too harsh and came as a surprise, the discovery abuses were “inadvertent,” and the plaintiff-appellee had not been prejudiced. Plaintiff-appellee then filed a renewed motion for sanctions outlining continued violations by appellants. Eventually, the district court entered a default judgment against the appellants for failing “to respond fulsomely and accurately to discovery requests and to comply with court orders pertaining to those requests.” The sanctions imposed an $828,801.36 judgment plus costs.
On appeal, the 4th Circuit concluded the district court did not abuse its discretion in finding appellants acted in bad faith and entered default judgment against them. The appellate court explained that there are certain circumstances, including this action, “where the entry of default judgment against a defendant for systemic discovery violations is the natural next step in the litigation, even without an explicit prior warning from the district court.” The appellate court further concluded the record contradicted each of the appellants’ arguments and held appellants “had fair ‘indication that sanctions might be imposed against [them]’ for their continued discovery and scheduling order violations.” With respect to appellants’ arguments that the district court awarded damages for the same purported calls pursuant to both the TCPA and the WVCCPA, the 4th Circuit found that penalties under these statutes are not exclusive and that they separately penalize different violative conduct. “[D]amages under the WVCCPA may be awarded in addition to those under the TCPA for a single communication that violates both statutes,” the appellate court wrote, adding that a plaintiff can also “recover separate penalties under separate sections of the TCPA even if the violations occurred in the same telephone call.”
6th Circuit: Single RVM confers standing
The U.S. Court of Appeals for the Sixth Circuit recently held that receiving one ringless voicemail (RVM) was enough to confer standing upon a plaintiff under the TCPA. In that case, plaintiff asserted he received several RVMs to his cell phone but never consented to receiving the messages. He filed a putative class action suit for violations of the TCPA, alleging the defendant used an automated telephone dialing system (autodialer) to deliver multiple RVMs to his cell phone advertising its services. According to the plaintiff, the RVMs tied up his phone line, cost him money, and invaded his privacy. During discovery, an expert concluded that only one of the 11 voicemails plaintiff claimed to have received was from the defendant. The defendant moved to dismiss, arguing the plaintiff lacked standing because he did not suffer a concrete injury. The district court granted defendant’s motion, ruling that receiving a single RVM did not constitute a concrete harm sufficient for Article III standing, because, among other things, plaintiff could not recall what he was doing when the RVMs were sent, he was not charged for the RVM, the RVM did not tie up his phone line, and he spent a very small amount of time reviewing the message.
On appeal, the 6th Circuit noted that it had not previously considered whether receiving a single RVM for commercial purposes is sufficient to confer standing under the TCPA. To determine whether an intangible harm—such as receiving an unsolicited RVM—rises to the level of concrete injury, the appellate court reviewed U.S. Supreme Court rulings on standing. “[Plaintiff’s] receipt of an unsolicited RVM bears a close relationship to the kind of injury protected by the common law tort of intrusion upon seclusion; and his claimed harm directly correlates with the protections enshrined by Congress in the TCPA,” the 6th Circuit wrote, reversing and remanding the district court’s judgment and stating that “[plaintiff] suffered a concrete injury in fact sufficient for Article III standing purposes.”
District Court allows prerecorded-voice-based claims to proceed
On March 23, the U.S. District Court for the Western District of New York partially granted a defendant debt collector’s motion for summary judgment in an action concerning the alleged use of an automated telephone dialing system (autodialer) to collect unpaid medical debt. Plaintiff claimed the defendant repeatedly called his cell phone using an autodialer and left messages using a prerecorded voice message even after he asked the defendant to stop. These actions, the plaintiff said, violated the FDCPA and the TCPA. In partially granting the defendant’s motion for summary judgment, the court found that the plaintiff’s TCPA claims concerning the alleged use of an autodialer were “no longer viable” following the U.S. Supreme Court’s ruling in Facebook v. Duguid (covered by a Special Alert), which narrowed the definition of autodialer under the TCPA, resulting in the law only covering equipment that generates numbers randomly and sequentially.
Although both parties agreed that the Facebook decision does not affect plaintiff’s prerecorded-voice-based-claims (which are distinct from claims based on the use of an autodialer), the parties disputed how the defendant came to possess the plaintiff’s cell phone number. The defendant maintained that the hospital that treated the plaintiff provided the cell phone number; however, the plaintiff contended that he did not recall providing his number to the hospital. The court reviewed, among other things, whether the plaintiff expressly consented to receiving calls—prerecorded or not. Under the TCPA, “[p]roviding one’s phone number to an entity constitutes consent for that entity to use the number to collect a debt, so long as ‘such number was provided during the transaction that resulted in the debt [being] owed,’” the court explained, adding that the burden is on the defendant to demonstrate that the plaintiff consented to receiving the calls that allegedly used a prerecorded voice.
A purported hospital intake form submitted by the defendant that included the plaintiff’s cell phone number did not indicate that “it was filled out by, or includes information provided only by, [the plaintiff],” the court said, also writing that “this document merely demonstrates that whenever the document was typed, [the hospital] had [plaintiff’s] phone number from some source.” This is not sufficient to indicate that the plaintiff consented to be contacted, the court ruled, holding that the defendant was not entitled to summary judgment based on its express consent affirmative defense. As a result, the court allowed the prerecorded-voice-based-claims to proceed to trial.
FCC regulations target scam robotexts
On March 16, the FCC adopted its first regulations specifically targeting scam text messages sent to consumers. Recognizing that robotexts are generally covered under the TCPA’s limits against unwanted calls to mobile phones, the FCC stated that the new regulations will require mobile service providers to block certain robotexts that appear to be coming from phone numbers that are unlikely to transmit text messages, including invalid, unallocated, or unused numbers, as well as “numbers that the subscriber to the number has self-identified as never sending text messages, and numbers that government agencies and other well-known entities identify as not used for texting.” Mobile service providers will also be required “to establish a point of contact for text senders, or have providers require their aggregator partners or blocking contractors to establish such a point of contact, which senders can use to inquire about blocked texts.”
The FCC’s report and order also include a further notice of proposed rulemaking, which seeks to implement additional protections to further prevent illegal text messages. The proposal would “require terminating providers to block texts from a sender after they are on notice from the Commission that the sender is sending illegal texts, to extend the National Do-Not-Call Registry’s protections to text messages, and to ban the practice of marketers purporting to have written consent for numerous parties to contact a consumer, based on one consent.”
Comments are due 30 days after publication in the Federal Register.
States receive $245 million judgment against robocall operation
On March 6, the U.S. District Court for the Southern District of Texas entered stipulated orders and permanent injunctions against two individuals who, along with their companies (also named as defendants in the litigation), allegedly operated a massive robocall campaign to sell extended car warranties and health care services. (See orders here and here.) Eight states attorneys general alleged violations of the TCPA and the Telemarketing Sales Rule, as well as various state consumer protection laws, claiming that the defendants initiated millions of robocalls to individuals nationwide without their prior express consent, spoofed caller ID numbers to mislead recipients, and called people whose numbers were on the Do Not Call Registry. Under the terms of the orders, the individual defendants (who neither admitted nor denied the allegations) are permanently banned from initiating or facilitating (or causing others to initiate or facilitate) any robocalls, working in or with companies that make robocalls, or engaging in any telemarketing. The court also ordered each individual defendant to pay a $122.3 million monetary judgment; however, these payments are mostly suspended in favor of the more permanent bans due to their inability to pay. The states noted that they are continuing their cases in the same action against others who allegedly worked with the individual defendants to facilitate the robocalls.
District Court approves $1.95 million TCPA settlement
On February 7, the U.S. District Court for the Eastern District of Missouri granted final approval to a $1.95 million settlement in a class action TCPA suit concerning allegations that a defendant debt collection company placed calls to consumers’ cell phones through the use of an artificial or prerecorded voice without first obtaining consumers’ prior express consent. The plaintiff also claimed that the defendant allegedly repeatedly delivered artificial or prerecorded voice messages to wrong or reassigned cell phone numbers that did not belong to the intended recipient. According to the plaintiff, the defendant continued to place calls to his cell phone even after he informed a company representative that it had the wrong number and that he did not know the individual the defendant was attempting to reach. The plaintiff sued alleging violations of Section 227(b)(1)(A)(iii) of the TCPA. While denying all liability alleged in the lawsuit, the defendant agreed to the terms of the settlement agreement, which defines class members as “[a]ll persons in the United States who (a) received a call from [the defendant] between December 16, 2017 and July 7, 2022 on their cellular telephone, (b) with an artificial or prerecorded voice, (c) for which [the defendant’s] records contain a ‘WN’ designation and an ‘MC’ and/or ‘MD’ notation.” The defendant is required to establish a $1.95 million settlement fund, pay $650,00 in attorneys’ fees and $10,477 in costs and expenses, and pay a $10,000 incentive award to the named plaintiff.
District Court preliminarily approves $2.75 million autodialer TCPA settlement
On January 31, the U.S. District Court for the District of Maryland preliminarily approved a class action settlement in which a cloud computing technology company agreed to pay $2.75 million to resolve alleged violations of the TCPA and the Maryland Telephone Consumer Protection Act. According to the plaintiff, the defendant violated the TCPA by, among other things, placing unsolicited telemarketing calls using an automated dialing system to class members on residential and cell phone numbers. Under the terms of the proposed settlement agreement, the defendant must establish a non-reversionary fund of $2.75 million to go to class members to whom the defendant (or a third party acting on its behalf) made (i) one or more phone calls to their cell phones; (ii) two or more calls while their numbers were on the National Do Not Call Registry; or (iii) one or more calls after the recipients asked the defendant or the third party to stop calling. “Plaintiff has also shown that a class action litigation is superior to other available methods for adjudicating this controversy,” the court wrote. “Plaintiff's counsel estimate that the average settlement payment to each Class Member would be approximately $30.00 to $60.00. Given this, the individual claims of each Class Member would be too small to justify individual lawsuits.” The court also approved proposed attorneys’ fees (not to exceed a third of the total settlement fund), as well as up to $60,000 for plaintiff’s out-of-pocket expenses and a $10,000 service fee award.
FCC chair asks Congress to act on robocalls
In December, FCC Chair Jessica Rosenworcel sent a letter to twelve senators in response to their June 2022 letter inquiring about combating robocalls. In the letter, Rosenworcel highlighted the FCC’s efforts to combat robocalls by discussing the agency’s “important” proposed rules, adopted in May, to ensure gateway providers that channel international call traffic comply with STIR/SHAKEN caller ID authentication protocols and validate the identity of the providers whose traffic they are routing to help weed out robocalls (covered by InfoBytes here). She also highlighted the FCC’s enforcement efforts, such as a December action where the FCC announced a nearly $300 million fine against an auto warranty scam robocall campaign for TCPA and Truth in Caller ID Act violations—“largest robocall operation the FCC has ever investigated” (covered by InfoBytes here).
Rosenworcel requested additional authority from Congress to combat robocalls and robotexts more effectively. Specifically, Rosenworcel asked the senators to “fix the definition of autodialer” – since robotexts are neither prerecorded nor artificial voice calls, the TCPA only provides consumers protection from robotexts if they are sent from autodialers. She further noted that the Supreme Court's decision in Facebook v. Duguid (covered by a Buckley Special Alert) narrowed the definition of autodialer under the TCPA, resulting in the law only covering equipment that generates numbers randomly and sequentially. She wrote that as a result, “equipment that simply uses lists to generate robotexts means that fewer robotexts may be subject to TCPA protections, and as a result, this decision may be responsible for the rise in robotexts.” Among other things, she also requested that Congress update the TCPA to permit for administrative subpoenas for all types of non-content customer records, and for Congress to grant the FCC the authority and resources to increase court enforcement of fines.