The current and future definition of what qualifies as an automatic telephone dialing system (ATDS or autodialer) remains a hotly debated and evaluated issue for every company placing calls and texts, or designing dialer technology, as well as the litigants and jurists already mired in litigation under the Telephone Consumer Protection Act (TCPA).  Last year, the D.C. Circuit struck down the FCC’s ATDS definition in ACA International v. FCC, Case No. 15-1211 (D.C. Cir. 2019).  Courts since have diverged in approaches on interpreting the ATDS term.  See, e.g., prior discussions of Marks and Dominguez.  All eyes thus remain fixed on the FCC for clarification.

In this post, we revisit the relevant details of the Court’s decision in ACA International, and prior statements of FCC Chairman Ajit Pai concerning the ATDS definition to assess how history may be a guide to how the FCC approaches this issue.

Continue Reading Taking Stock of the TCPA in 2019: What is an “Autodialer”?

Kelley Drye introduces a new Full Spectrum series, “Inside the TCPA,” which will offer a deeper focus on TCPA issues and petitions pending before the FCC. Each episode will tackle a single TCPA topic or petition that is in the news or affecting cases around the country. In this inaugural episode, partner Steve Augustino and associate Jenny Wainwright discuss the definition of an autodialer or ATDS. This episode addresses the 2018 D.C. Circuit decision in ACA International and the FCC’s new proceeding to examine the definition. With initial comments filed on June 13th, Steve and Jenny analyze the principal arguments made by commenters and discuss whether Congress will weigh in on the matter. To listen to this episode, please click here.*

Future episodes of “Inside the TCPA” will tackle reassigned numbers, consent, and other topics raised before the FCC. This is a companion to Kelley Drye’s comprehensive list of petitions before the Commission available in our monthly TCPA Tracker newsletter. Please contact us if we can assist you with any of the FCC proceedings.

Kelley Drye’s Full Spectrum is available on iTunes. To subscribe, and keep up to date on the latest trends and topics in communications, simply find the built-in and undeletable podcast app, search “Kelley Drye Full Spectrum,” look for our logo, and hit “subscribe.”

You can also access the podcast through our website, Soundcloud, and Stitcher.

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On May 4, 2016, the FCC issued a Notice of Proposed Rulemaking to exempt robocalls made to collect “a debt owed to or guaranteed by the United States” from the TCPA’s prior express consent requirement. The new rules will implement a provision of the Bipartisan Budget Act of 2015. In its Notice, the Commission seeks comment on a number of issues, including as follows:

What types of calls should be covered by the exemption? The Budget Act created the TCPA exemption for calls made “solely to collect a debt” owed to the United States.  The Commission seeks comment on the proper interpretation of that language.  It also proposes to allow debt servicing calls under the exemption because such calls “may provide a valuable service by offering information about options and programs designed to keep at-risk debtors from defaulting or becoming delinquent on their loans.”  Finally, the Commission seeks comment on the proper interpretation and scope of the phrase “owed to or guaranteed by the United States.”
Who can be called? The Commission proposes that the exemption will cover “only calls to the person or persons obligated to pay the debt.”  It would exclude calls to persons who the caller does not intend to reach, and would apply the “one-call window” rule for reassigned numbers.  The Commission seeks comments on these proposals and asks commenters to provide alternative approaches they feel would be appropriate.
Who may place the calls? The Commission proposes that the exemption would cover calls made by creditors and those calling on their behalf, including agents.  It seeks comment on whether it should adopt this approach, or consider a narrower or broader interpretation under the Budget Act exemption.
How should the Commission limit the number and duration of the calls? The Budget Act provides the Commission with discretion to restrict covered calls, including by limiting the frequency and duration of the calls.  Thus, the Commission has proposed a three-call-per-month maximum for autodialed, prerecorded, or artificial voice calls to wireless numbers.  The limit would apply regardless of whether a call went unanswered.  The Commission posits whether a different limitation would be appropriate for live agent calls.  Without setting forth specific proposals, the Commission also seeks comment on the appropriate duration for the calls, as well as other restrictions (i.e., limiting calls hours to 8:00 AM to 9:00 PM).
Should consumers be permitted to stop covered calls? The Commission proposes “that consumers should have a right to stop [covered] calls at any point the consumer wishes.”  It proposes that stop-calling requests would continue to apply even after the debt is transferred to other collectors.  It further proposes to require callers to inform consumers of their right to make a stop-calling request.

Comments on the Commission’s proposals are due on June 6, 2016 and replies are due on June 21, 2016. Following the comment period, we expect the proceeding to move quickly because the Commission is statutorily mandated to adopt rules to implement the exemption no later than August 2, 2016.

downloadOn Monday, Missouri Attorney General Chris Koster filed a lawsuit against Charter Communications, Inc., alleging that the cable, internet, and telephone service provider’s third party telemarketers made thousands of telemarketing calls to consumers who had placed their numbers on the federal and Missouri do-not-call lists, or requested not to receive telemarketing calls from Charter. According to the Attorney General’s press release, the Office received 350 complaints from Charter subscribers and non-subscribers about telemarketing calls – which some had been receiving up to three times per day.

According to the complaint, Charter had entered into contracts with third-party telemarketers to place telemarketing calls on its behalf to numbers on Charter-provided lists. These third parties allegedly used autodialers, identified themselves as Charter, and received a commission based on sales to phone numbers on the lists provided by Charter. The complaint, which was filed in the U.S. District Court for the Eastern District of Missouri, alleges that these third-party telemarketers made calls to thousands of consumers whose phone numbers were on applicable Do Not Call lists and did not lawfully honor consumers’ requests to be added to DNC lists, and that such calls were made without an applicable Established Business Relationship exemption or consent to be called. The complaint states that Charter is liable for these third parties’ calls, which allegedly violate the Telephone Consumer Protection Act, Telemarketing Sales Rule, and Missouri Merchandising Practices Act’s “No-Call Law” and “Telemarketing Law.”

While we have seen an influx of consumer class action lawsuits alleging TCPA violations in recent years, state Attorneys General have the authority to investigate and seek civil penalties for violations of both federal and state telemarketing laws. Attorney General Koster is seeking, in addition to permanent injunctive relief, civil penalties of at least $500 for each violation of the TCPA, up to $16,000 for each violation of the TSR, and up to $5,000 for each violation of the Missouri Merchandising Practices Act.

As companies draw on mobile delivery platforms, cloud-based technologies, and third-party vendors to become more sophisticated in their use of telemarketing, autodialer, and text message campaigns, the business risks and potential for class action lawsuits have greatly increased. The Telephone Consumer Protection Act of 1991 (TCPA) has emerged as a cottage industry with plaintiffs’ attorneys routinely filing class action lawsuits seeking multi-million dollar claims and settlements. The FTC also has not shied away from rigorous telemarketing enforcement under its rules against major big brands and calling platforms, including with theories that are based upon an expansive third party liability interpretation of the agency’s enforcement powers.

Yesterday my litigation partner Lauri Mazzuchetti and I teamed up with Ken Sponsler of CompliancePoint to cover the latest developments and hot topics related to TCPA compliance and litigation, and strategies to consider when defending such matters.  If you missed this 2-hour deep dive into the issues, you can listen to the recording here. And if you would like to stay up to date on this topic, you may also wish to sign up for our TCPA Tracker newsletter so you can receive monthly updates on the latest happenings related to TCPA litigation and compliance.

Last Friday, the U.S. Court of Appeals for the Ninth Circuit held that a marketing consultant for the United States Navy – the Campbell-Ewald Company – could be held liable for a third-party marketer’s violations of the Telephone Consumer Protection Act (“TCPA”) arising out of the transmittal of unsolicited text messages.

The Navy hired Campbell-Ewald to develop and execute a multimedia recruiting campaign and the parties agreed that, as part of the marketing campaign, Campbell-Ewald would send text messages to cellular users that had consented to receive the recruitment solicitation.  Campbell-Ewald outsourced the text message dialing to a company called Mindmatics which was responsible both for generating the list of phone numbers to be dialed and for physically transmitting the text messages.  In the suit, the plaintiff claimed that he did not consent to receipt of the message and alleged that Campbell-Ewald violated the TCPA.  The plaintiff did not name the Navy or Mindmatics as a defendant.

Continue Reading Marketing Consultant May Be Held Liable Under TCPA for Its Third-Party Marketer’s Unsolicited Text Messages

Last week, a court preliminarily approved the largest class action settlement alleging violations of the Telephone Consumer Protection Act (TCPA).  Capitol One, along with three debt collection agencies, agreed to pay more than $75 million to settle a consolidated class action lawsuit alleging that the companies used an automatic telephone dialing system (ATDS) and/or artificial prerecorded voice to call consumers’ cellular telephones without the prior express consent of those called.  

Under the TCPA, prior express consent is required for any non-telemarketing call – such as a debt collection call – made to a mobile phone using an ATDS and/or an artificial prerecorded voice.  (A higher standard – prior WRITTEN express consent – is required to make calls to cell phones using an ATDS or a prerecorded voice for any telemarketing).

In addition to alleging that the companies never received prior express consent, certain plaintiffs alleged that (1) their cell phone was called concerning another person’s Capitol One account; (2) Capitol One was repeatedly asked to stop calling, but calls continued nonetheless; and (3) Capitol One obtained plaintiffs’ cell number from a third party via skip tracing. 

The settlement is a good reminder of the repercussions that may follow when a company has not closely reviewed and ascertained the sources from which it obtains phone numbers, whether any are cellular phone numbers and the likelihood that such numbers still belong to the customer (or have since been disconnected and reassigned), and are matched with the correct type of consent to be called.  Even slight oversights in this area are exposing a number of companies to claims of potential violations (and massive financial exposure) under the TCPA.