Jennifer Gray, shareholder at Greenberg Traurig, will participate in the American Conference Institute’s 21st National Conference on Consumer Finance Class Actions & Litigation from July 27-28. Jennifer will be speaking on the panel titled “The Telephone Consumer Protection Act (TCPA): Litigation and Settlement Trends, Emerging Defense Strategies, Class Action Certification Issues, and Staying Ahead of the Curve in the Face of Complex and Unclear Rules.” The session will address emerging trends and developments in TCPA litigation, settlement trends, certification issues relating to TCPA class actions, practical guidance for what lies ahead, among other areas of interest.
Over the past two years, class actions involving Telephone Consumer Protection Act violations resulted in multi-million dollar settlements for many financial institutions and other businesses. Several of the largest TCPA class action settlements to date have involved financial institutions.
The TCPA prohibits a business from using an automated telephone dialing systems (“ATDS”) to place calls to consumers’ cell phones in the absence of “prior express written consent.” The TCPA provides for a private right of action and permits aggrieved parties to obtain injunctive relief, actual monetary damages, or statutory penalties of $500 for each violation (and up to $1500 for knowing or willful violations).
One reason for the seemingly endless number of actions filed under the TCPA is a lack of FCC guidance interpreting various aspects of the statute, which leaves businesses uncertain how to conform their activities and courts divided on key liability issues. Numerous petitions have been filed with the FCC seeking clarity on issues related to prior express consent, such as whether consumers can revoke consent, and whether the new written consent standard applies to certain types of calls, such as healthcare messages. Other issues that are the subject of pending petitions include the rules for fax solicitations and calls to numbers that have been reassigned to new users.
Another factor in the proliferation of TCPA litigation is the apparent conflict behind the FCC’s definition of ATDS and the TCPA’s statutory definition. Because calls placed without the use of an ATDS are not subject to the TCPA’s prior express consent requirements, what constitutes an ATDS is a critical issue in TCPA actions. The TCPA defines ATDS as “equipment that 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.” 47 U.S.C. § 227(a)(1). However, FCC rulings have defined ATDS as “any equipment with the capacity to generate numbers and then dial them without human intervention. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14091-92 ¶¶ 132-33 (July 3, 2003); In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling, 23 FCC Rcd. 559, 563 n.23 (Jan. 4, 2009). The FCC’s definition is broader than the statutory definition. While many courts have deferred to the FCC’s expansive definition, others have held that the FCC does not have the authority to expand the TCPA’s statutory definition. See e.g., Marks v. Crunch San Diego, LLC, Case No. 14-cv-00348-BAS-BLM (S.D. Cal. Oct. 23, 2014). The definition of ATDS is also the subject of pending petitions before the FCC.
On April 1, 2015, in remarks before the Association of National Advertisers, FCC Commissioner Michael O’Rielly urged the FCC to address the backlog of petitions requesting clarification of its TCPA regulations. Commissioner O’Rielly noted that the pending petitions request the FCC’s clarification on key issues such as the definition of autodialer and liability for calls and texts sent to reassigned cell phone numbers. He noted that the lack of clarity and increased court filings have “broadened the scope of the TCPA,” which in turn has increased TCPA litigation risks for companies. As a result of the uncertainty, Commissioner O’Rielly noted that businesses avoid contacting their existing customers or clients, even if the purpose of the call could help the customer. The Commissioner emphasized that the TCPA is impacting all sectors of the economy and concluded by expressing, “[w]e can’t paint all legitimate companies with the brush that every call from a private company is a form of harassment. It is time for the FCC to act to provide clear rules of the road that will benefit everyone, and that means acting on TCPA petitions before us.”
These and other issues related to TCPA litigation will be covered at the ACI conference.