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  • 9th Circuit revives TCPA suit against insurance servicer

    Courts

    On August 10, the U.S. Court of Appeals for the 9th Circuit revived a lawsuit against an insurance servicing company (defendant) for allegedly using both an automated telephone dialing system and an artificial or pre-recorded voice to place a job-recruitment call without obtaining the plaintiff’s consent. According to the opinion, the plaintiff filed a suit alleging, among other things, TCPA violations after receiving the pre-recorded voicemail from the defendant regarding his “industry experience” and that the defendant is “looking to partner with select advisors in the Los Angeles area.” The district court dismissed the plaintiff’s action under Federal Rule of Civil Procedure 12(b)(6) for failing “to state a claim upon which relief can be granted,” holding that the TCPA and the relevant implementing regulation do not prohibit conducting job recruitment robocalls to a cellular telephone number. In addition, the district court “read the Act as prohibiting robocalls to cell phones only when the calls include an ‘advertisement’ or constitute ‘telemarketing,’ as those terms have been defined” by the FCC. The court found that since the plaintiff admitted that the job recruitment call he received did not involve advertising or telemarketing, he had not adequately pleaded a violation of the TCPA.

    On the appeal, a three-judge panel of the 9th Circuit determined that the district court misread the TCPA and the implementing regulation when dismissing the plaintiff’s suit and remanded the case for further proceedings. The appellate court noted that the FCC provision was intended to tighten the consent requirement for robocalls that involve advertising or telemarketing, but the lower court incorrectly perceived the provision as “effectively removing robocalls to cellphones from the scope of the TCPA’s coverage unless the calls involve advertising or telemarketing.” Moreover, the panel wrote that “[t]he applicable statutory provision prohibits in plain terms ‘any call,’ regardless of content, that is made to a cellphone using an automatic telephone dialing system or an artificial or pre-recorded voice, unless the call is made either for emergency purposes or with the prior express consent of the person being called.”

    Courts TCPA Ninth Circuit Appellate FCC Robocalls Autodialer

  • State AGs ask for faster implementation of STIR/SHAKEN

    State Issues

    On August 9, state attorneys general from all 50 states and the District of Columbia, through the National Association of Attorneys General, sent a letter to the FCC urging the Commission to confront illegal robocalls by moving the deadline for smaller telephone companies to implement caller ID technology, STIR/SHAKEN, by June 30, 2022 at the latest. The TRACED Act (the Act), which became law in 2019 (covered by InfoBytes here), requires phone companies to implement STIR/SHAKEN technology on their networks to ensure that telephone calls are originating from verified numbers, not spoofed sources. As previously covered by InfoBytes, the STIR/SHAKEN caller ID authentication framework is an “industry-developed system to authenticate Caller ID and address unlawful spoofing by confirming that a call actually comes from the number indicated in the Caller ID, or at least that the call entered the US network through a particular voice service provider or gateway.” Currently under the Act, large companies are required to implement the technology by June 2021, and smaller voice service providers have until June 2023. According to the letter, the state attorney generals’ advocate that “[r]emoving — or, at least, curtailing — the Commission's blanket extension for small voice service providers that flout the commission's largess by perpetrating this high-volume traffic would truly serve the purpose of the TRACED Act: ‘to deter criminal robocall violations and improve enforcement’ of the TCPA.”

    State Issues State Attorney General FCC Robocalls TCPA

  • Robocaller to pay $1.8 million

    Courts

    On June 29, the U.S. District Court for the Western District of Oklahoma granted final approval to a $1.75 million class action settlement involving a now-bankrupt, marketing company hired to place pre-recorded robocalls on behalf of a home security company without receiving consumers’ prior written express consent, in alleged violation of the TCPA. According to the motion for final approval of class settlement, the lead plaintiff alleged, among other things, that the marketing company was directly liable for calls advertising home security services placed using an automated soundboard system, and that the home security company was vicariously liable for hiring the marketing company to place the calls. In this case, the court decided in summary judgment that the soundboard technology used to place the calls at issue (“rather than traditional unattended prerecorded messages”) was regulated by the TCPA, an issue that the plaintiff believes to be of first impression. The settlement agreement also enjoins the company “from initiating any telephone call to any telephone line that delivers a prerecorded message and/or using soundboard technology to deliver a prerecorded message where the principal purpose of the telephone call is advertising or marketing, unless the called party has provided prior express written consent to receive such calls.” Additionally, as noted in the motion, the court previously granted final approval to a $1.85 million class wide settlement with the alarm company last November.

    Courts Autodialer Class Action Settlement TCPA Soundboard

  • Florida issues telephone solicitation restrictions

    State Issues

    On June 29, the Florida governor signed SB 1120, which prohibits telephone solicitations and sales calls involving an “automated system for the selection or dialing of telephone numbers or the playing of a recorded message” without first receiving the prior express written consent of the called party. Among other things, the act (i) provides a “rebuttable presumption that a telephonic sales call made to any area code in this state is made to a Florida resident or to a person in this state at the time of the call”; (ii) provides a private right of action to enjoin such violations or recover the greater of actual damages  or $500; and (iii) authorizes a court to increase the amount of the award for willful and knowing violations. Additionally, Florida law is amended to provide that it is an unlawful act or practice to, among other things, make “[m]ore than three commercial telephone solicitation phone calls from any number to a person over a 24-hour period on the same subject matter or issue, regardless of the phone number used to make the call.” Additionally, companies may not use technology to “deliberately display a different caller identification number than the number the call is originating from to conceal the true identity of the caller.” The act takes effect July 1.

    State Issues State Legislation TCPA Autodialer

  • CFPB, Georgia AG allege debt-relief violations

    Federal Issues

    On June 29, the CFPB announced a stipulated final judgment and order against a financial services company and its owners for allegedly deceiving consumers into hiring the company. According to the complaint filed in the U.S. District Court for the Northern District of Georgia with the Georgia attorney general, the defendants violated the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Consumer Financial Protection Act, and Georgia’s Fair Business Practices Act by using telemarketing practices to deceptively induce consumers to hire the company, by, among other things, falsely promising to help them: (i) reduce their credit card debts by advertising to potential customers through direct mailers; and (ii) improve consumers’ credit scores by claiming they could restore their credit scores and that they had a “credit restoration team.” In addition, the defendants “collected millions of dollars in advance fees, claiming that it provided a ‘debt validation’ program that used the debt-verification process set forth in the [FDCPA] to invalidate and eliminate debt and improve consumers’ credit record, history, or rating.” Under the terms of the order, the defendants are banned from the telemarketing of any consumer financial product and selling financial advisory, debt relief, or credit repair services. The defendants must also pay a fine of $150,001, $15,000 of which will be remitted to the state of Georgia, and a penalty of approximately $30 million in consumer redress (full payment of which may be suspended if certain conditions are met).

    Federal Issues CFPB State Issues State Attorney General TSR Georgia CFPA FDCPA TCPA Enforcement

  • District Court grants motion to dismiss TCPA claim

    Courts

    On June 24, the U.S. District Court for the Northern District of California granted a motion to dismiss a putative class action suit, in which the plaintiff alleged that the defendant sent messages using an “automatic telephone dialing system” (autodialer) within the meaning of the TCPA. As previously covered by a Buckley Special Alert, in April the U.S. Supreme Court in Facebook, Inc. v. Duguid narrowed the definition of what type of equipment qualifies as an autodialer under the TCPA, a federal statute that generally prohibits calls or texts placed by autodialers without the prior express consent of the called party. In this district court case, the platform utilized by the defendant to contact the plaintiff allegedly placed calls only to phone numbers supplied by consumers when signing up for the defendant’s services. The plaintiff alleged that the platform nonetheless qualified as an autodialer because it used a “random number generator to determine the order in which to pick from the preproduced list of consumer phone numbers, such that it does qualify as an autodialer.” The plaintiff claimed this feature brought the platform within the TCPA’s definition of an autodialer, referring to a line from footnote 7 of the Duguid opinion. That footnote states that “an autodialer might use a random number generator to determine the order in which to pick phone numbers from a preproduced list. It would then store those numbers to be dialed at a later time.” However, in the order, the district court rejected the plaintiff’s argument as inconsistent with the rationale in Facebook and an “acontextual reading” of the footnote.  In rejecting the argument, the court explained that  under Facebook’s holding, “to qualify as an autodialer, a device must have ‘the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” The district court found that defendant’s platform was only texting customers who had already provided their contact information. As a result, the platform did not qualify as an autodialer as a matter of law and the court dismissed plaintiff’s TCPA claim without leave to amend.

    Courts TCPA U.S. Supreme Court Autodialer

  • District Court grants motions to compel and dismiss in FDCPA, TCPA class action

    Courts

    On June 16, the U.S. District Court for the Southern District of California granted a Delaware-based debt collector’s (defendant) motions to dismiss with prejudice and compel arbitration in an FDCPA, TCPA class-action case, while denying as moot the defendant’s motion to strike or stay. The plaintiff’s unpaid credit card debt was sold to the defendant, who sought to collect the debt by calling the plaintiff’s cell phone two dozen times in a span of two weeks using an automated telephone dialing system. The plaintiff filed a lawsuit originally alleging TCPA violations. He later amended the complaint to include FDCPA violations after he claimed he never received notice as required by the FDCPA. Under the FDCPA, debt collectors are required to provide a consumer with written notice containing various required information within five days after the initial communication in connection with the collection of any debt, “unless the. . .information is contained in the initial communication or the consumer has paid the debt.” The defendant initially moved to dismiss, but after the plaintiff opposed, filed an instant motion to compel arbitration based on an arbitration provision contained in a set of terms and conditions in the plaintiff’s credit card agreement with the original creditor. The plaintiff countered, among other things, that the debt collector cannot enforce the arbitration provision because the plaintiff never signed it, and further argued that the card agreement is unconscionable.

    The court disagreed, ruling that the defendant did not waive its right to arbitrate the plaintiff’s claims, pointing out that the arbitration provision between the plaintiff and the defendant is part of the card agreement, which the plaintiff accepted once he began using the credit card. According to the court, the arbitration provision “states that it covers ‘any claim, dispute or controversy between you and us arising out of or related to your [a]ccount, a previous related [a]ccount, or our relationship,’ including but not limited to those ‘based on. . .statutory or regulatory provisions, or any other sources of law.’” According to the court, the plaintiff’s dispute with the defendant relates to violations of the TCPA and FDCPA and exists between the plaintiff and the original creditor’s assignee (the defendant). Thus, because the claims relate to a creditor-debtor relationship arising out of the card agreement, the court determined that the arbitration provision “constitutes a valid agreement to arbitrate” and was unpersuaded by the plaintiff’s arguments that the arbitration provision is unconscionable. With respect to the plaintiff’s TCPA claims, the court found that it “disregards as unreasonable and implausible Plaintiff’s allegation that any calls he received related to amounts unpaid arising out of his [credit card] were unlawful in light of the [c]ard [a]greement,” which expressly authorizes the original creditor or its assignees to call the plaintiff once the plaintiff accepted the card agreement. The court found that as the plaintiff did not plead sufficient facts to show that the calls were inconsistent with the FDCPA, the defendant had every right to call him.

    Courts Class Action TCPA FDCPA Credit Cards Debt Collection Autodialer

  • District Court, citing Supreme Court in Facebook, says bank’s dialing equipment is not an autodialer

    Courts

    On June 9, the U.S. District Court for the District of South Carolina granted summary judgment in favor of a national bank, ruling that the dialing equipment used by the bank did not fit within the U.S. Supreme Court’s narrowed definition of the type of equipment that qualifies as an autodialer under the TCPA. As previously covered by a Buckley Special Alert, the Supreme Court held that in order to qualify as an “automatic telephone dialing system,” a device must have the capacity either to store or produce a telephone number using a random or sequential generator. The TCPA defines an autodialer as equipment with the capacity both “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers. The question before the Supreme Court in Facebook Inc. v. Duguid was whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not use “a random or sequential number generator.” The Court held it does not, stating that the modifier “using a random or sequential number generator” applied to both terms “store” and “produce.”

    In the South Carolina case, the plaintiff argued that the bank used an autodialer when it placed at least 155 debt collection calls without her consent. She sued the bank, alleging, among other things, violations of the TCPA, FCRA, and invasion of privacy. The court ruled in favor of the bank on the FCRA and invasion of privacy claims and directed the parties to refile their motions after the Supreme Court issued its decision in Facebook. Following the Facebook opinion, the plaintiff argued that “the dialer at issue must only have the capacity to store or produce numbers using a random or sequential number generator, and Defendant’s internal documents establish that the [bank’s dialing equipment] has that capacity,” and that, moreover, a footnote in Facebook “leaves open the possibility that the [equipment’s] ability to use a random number generator to determine the order in which numbers are dialed from a preproduced list may qualify it as an ATDS.”

    The court disagreed, concluding that even though internal bank documents referred to the dialing equipment as an autodialer and showed that the equipment dialed numbers automatically without the assistance of an agent, the information was insufficient to meet the Supreme Court’s statutory definition. “As we learned from Duguid, the automatic dialing capability alone is not enough to qualify a system as an ATDS,” the court ruled. “The system at issue must store numbers using a random or sequential number generator or produce numbers using a random or sequential number generator to qualify as an ATDS.” According to the court, the bank’s equipment dialed members’ numbers from a pre-created list of targeted accounts. With respect to the plaintiff’s footnote argument, the court found that the plaintiff was taking the footnote in Facebook “out of context.”

    Courts TCPA Autodialer U.S. Supreme Court

  • 11th Circuit: Insurance firm not required to pay broker’s $60 million TCPA judgment

    Courts

    On June 1, the U.S. Court of Appeals for the Eleventh Circuit held that an insurance firm is not required to pay a $60.4 million TCPA judgment arising out of a Florida-based insurance broker’s marketing campaign accused of sending unsolicited text messages and phone calls to consumers. The broker sought coverage against a class action which alleged, among other things, that “by sending the text messages at issue. . . , Defendant caused Plaintiffs and the other members of the Classes actual harm and cognizable legal injury [including] . . . invasions of privacy that result from the sending and receipt of such text messages.” In response, the insurance firm asserted that the policy did not cover invasion of privacy claims such as those brought in the class action against the broker. Subsequently, the broker settled the suit and assigned all of its rights against its insurer to the plaintiffs, who attempted to enforce the judgment against the insurance firm. The 11th Circuit found that the broker’s insurance policy excluded coverage of certain actions that would prompt a lawsuit, including claims of invasion of privacy. The appellate court also concluded that the TCPA class action arose out of an “invasion of privacy” because the class complaint specifically alleged that the broker “intentionally invaded the class members’ privacy and sought recovery for those invasions.”

    However, one of the judges dissented from the ruling, opining that the policy the insurance firm wrote to the broker is “ambiguous as to whether it refers to the common-law tort called ‘invasion of privacy,’” noting that “in other words, if it could reasonably be so interpreted—then we must interpret it to refer only to that tort.” The judge also noted that it is “unclear to me why any party to an insurance policy would ever allow coverage to be dictated by the conclusory terms and labels that a plaintiff might later choose to include in her complaint.”

    Courts Eleventh Circuit TCPA Appellate Insurance Class Action

  • 5th Circuit: A single unsolicited text constitutes TCPA standing

    Courts

    On May 26, the U.S. Court of Appeals for the Fifth Circuit held that receiving a single unsolicited text message is enough to establish standing under the TCPA. The plaintiff alleged he received an unsolicited text message on his cell phone from the defendant after he had previously revoked consent and reached a settlement with the defendant to resolve a dispute over two other unsolicited text messages. The plaintiff filed a putative class action alleging that the defendant negligently, willfully, and/or knowingly sent text messages using an automatic telephone dialing system without first receiving consent, and that the unsolicited message was “a nuisance and invasion of privacy.” The district court dismissed the suit for lack of standing, ruling that a “single unwelcome text message will not always involve an intrusion into the privacy of the home in the same way that a voice call to a residential line necessarily does.”

    On appeal, the 5th Circuit disagreed, concluding that the nuisance arising from the single text message was a sufficiently concrete injury and enough to establish standing. “In enacting the TCPA, Congress found that ‘unrestricted telemarketing can be an intrusive invasion of privacy’ and a ‘nuisance,’” the appellate court wrote, commenting that the TCPA “cannot be read to regulate unsolicited telemarketing only when it affects the home.” In addition, the appellate court found that the plaintiff separately alleged personal injuries that separated him from the public at large by arguing that the “aggravating and annoying” robodialed text message “interfered with [his] rights and interests in his cellular telephone.” In reversing the district court’s ruling, the 5th Circuit disregarded precedent set by the 11th Circuit in Salcedo v. Hanna (covered by InfoBytes here). Calling the other appellate court’s decision “mistaken,” the 5th Circuit contended the other appellate court took too narrow a view of the theory of harm by concluding that there must be some actual damage before an action can be maintained. Moreover, the 5th Circuit stated the 11th Circuit misunderstood the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, writing “Salcedo’s focus on the substantiality of an alleged harm threatens to make this already difficult area of law even more unmanageable. We therefore reject it.”

    Courts Appellate Fifth Circuit TCPA Class Action Autodialer Spokeo

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