TCPA

June 2017

Claims Not Mooted By Deposit With The Court

Fulton Dental v. Bisco
Reversed and remanded – Bisco allegedly sent unsolicited faxes without the statutorily required opt-out notice. Plaintiff rejected a settlement offer (under Rule 68) of $3,005 for the one fax he received. Bisco tried again after the ruling in Gomez v. Campbell-Ewald making an immediate tender (under Rule 67), and the court granted a motion to deposit $3,600 to cover the maximum amount of damages allowed by the TCPA, plus $600 for incidental costs. The district court then ruled that offer mooted plaintiff’s individual and class claims.

The appellate court found no distinction between Rule 67 and Rule 68 in forcing a settlement on an unwilling party. Additionally, an award of damages (and injunction) were merits based rulings. Once the case was moot, the court lacked power to enter a judgement on the merits. Moreover, under Rule 67, defendant was only using the court as an escrow agent, and the funds could only be released to a party proven (via ruling) to be entitled to them. Finally, the fact Bisco indicated it might request return of funds ‘leftover,’ indicated a live controversy over whether the ‘full amount of relief’ had been deposited.

Thus, plaintiff’s claims were not mooted, and since plaintiff had not lost on the merits prior to a motion for class certification, class claims were not barred.
[7th. Circ.; 16-3574 (Orig: N.D. Ill.; 1:15-cv-11038)]
jbho: getting harder to ‘pick-off’ plaintiffs in the 7th.

The court kind-of alluded to the fact the offer did not address any potential service award to plaintiff as class representative. Not sure anyone would be willing to just tack on such an (unknowable?) amount in an offer. If they could, the court observed, that fully compensated plaintiff may no longer be adequate to represent the class.

Note that in the second, the appellate court overturned mootings based on Rule 68 offers in Lary v. Rexall (2nd Circ.; 15-601) and Geismann v. ZocDoc (2nd Circ.; 14-3708) as well.

$280M Penalty In Telemarketing Suit Brought By FTC, States

US v. Dish
Order for permanent injunction – Dish, and its agents, allegedly made tens of millions of unsolicited marketing Robocalls, many to numbers on the National and State specific Do Not Call lists. Dish also allegedly failed to honor opt-out requests. Liability for agent calls was established as Dish had sufficient influence over its agents based on the FCC Declaratory Ruling on Vicarious Liability (Dish’s own petition). The court found Dish failed to respond when it knew, or should have known, large volumes of calls continued to be made in violation of the TSR.

The decision requires Dish to pay:
• $168,000,000.00 to the FTC
• $53,256,000.00 to California
• $17,388,000.00 to Illinois
• $18,648,000.00 to North Carolina
• $22,708,000.00 to Ohio

Additionally, Dish must:
• Demonstrate that Dish and its Primary Retailers are fully complying with the TSR, otherwise it will be barred from conducting any outbound telemarketing for two years
• Hire a telemarketing compliance expert (e.g., PossibleNOW/CompliancePoint) to plan to ensure compliance
• Submit compliance materials, including all outbound telemarketing call records semi-annually; make itself available for impromptu inspections
The decision generally prohibits Dish, directly or indirectly through Authorized Telemarketers or Retailers, from violating the TSR.
[C.D. Ill; 3:09-cv-03073]
jbho: this one has been well covered in the media, so not sure I have much to add. If you’re interested, one of the better analyses I’ve seen is on Law360 at:
https://www.law360.com/privacy/articles/933329/2-dish-network-defeats-suggest-tcpa-is-not-dead-yet (subscription required).

May 2017


$61 Million For Willful Violations – Jury Award Trebled By Judge

Krakauer v. Dish
Memorandum opinion and order – Dish, through its agents, allegedly made unsolicited telemarketing calls to plaintiff’s landline, a number on the national Do Not Call (DNC) list. Calls allegedly continued, despite plaintiff’s request to be added to Dish’s internal DNC list.

In February, a jury held Dish accountable for calls made by its agent, and awarded $400 for each of the ~51,000 calls in question.

The judge tripled the Jury Award, finding Dish willfully and knowingly violated the TCPA. The court determined Dish never investigated whether its vendors had solved compliance problems, despite a 2009 order where Dish agreed it would comply – and ensure its vendors complied – with the TCPA. Furthermore, the court found Dish’s agent knew it was using lists that had not been scrubbed, and knew it was calling people who asked calls cease. “Dish would turn a blind eye to any recordkeeping lapses and telemarketing violations (…) and any lawsuits (…) were (the agent’s) problem.” Even when made aware of violations, the court ruled, Dish took no disciplinary action.

In response to Dish’s argument it shouldn’t be liable since plaintiff only complained about the first call, the court stated “Nothing in the TCPA requires a consumer who receives violative calls to complain.

To deter future violations, the court increased damages from $400 to $1,200 per call, bringing the total award to $61,342,800 ($1,200 * 51,119 calls).
[M.D. NC; 1:14-cv-00333]
jbho: a few lessons here:
• Consent! Consent! Consent!
• When someone says stop calling, STOP CALLING!
• If you are going to work with vendors or list brokers, get representations and warranties that they have consent to use that data, and do your own due diligence to verify.
• Make sure you have well-constructed contractual agreements that clearly define vendor obligations, and distribute liability appropriately.


No Harm In A Couple Unsolicited Texts

Zemel v. CSC Holdings
Dismissed – CSC allegedly sent an unsolicited (ATDS) text to plaintiff’s mobile. Plaintiff claimed he was not a CSC customer, and never gave CSC his number. Plaintiff further alleged that when texting STOP, he received a non-confirmatory reply, asking him which texts he would like to stop.

Zemel

The court found that plaintiff failed to allege a concrete harm:
• he had a monthly plan, and failed to show any additional charges for the texts
• text messages do not implicate the same privacy concerns as a telephone call
• time required to read the three texts could not have caused Plaintiff the annoyance Congress intended to prevent
• loss of some de-minims battery power was not the type of activity the TCPA intended to protect
Thus plaintiff failed to plead “any harm beyond a mere statutory violation” and case was dismissed (without prejudice).
[D. N.J.; 3:16-cv-04064]
jbho: Interesting result. I have a feeling this isn’t the last we’ll see of this case.

One of the few TCPA decision I’ve seen that ruled a TCPA violation isn’t in and of itself a concrete harm. Although, a common theme in those cases has been a single (or low number of) call(s) text(s) or fax(es). AFAIK, only the 9th has ruled on thisCould yet be a circuit split forming.

Remember, per the FCC’s SoundBite Declaratory Ruling, a final, one-time confirmatory opt-out text is permitted if:
• the sender of the text messages has obtained prior express consent, as otherwise required under the TCPA
• the opt-out confirmation does not include marketing solicitations, or an attempt to convince the consumer to reconsider the opt-out decision
• the opt-out confirmation is sent within minutes of the request
— (if more than five minutes, you have some ‘splaining to do)
• the confirmation is the only text messages sent
Note: the FCC also stated that while a one-time confirmation message after receipt of a consumer’s opt-out request does not violate the TCPA, such consent does not extend to a follow-up confirmation voice call.

Given the above, it’s probably safer to not run multiple text programs through the same short code.


Customer Satisfaction Surveys Require Prior Express Written Consent

Katz v. Honda
Defendant’s MSJ denied – Honda, through its agents, allegedly made unsolicited ATDS calls to plaintiff’s mobile. Plaintiff claimed the calls (part of an Acura Client Excellence program) were made after he provided his number during a service appointment. Plaintiff claimed he provided his number only for service purposes, and not for Acura Client Excellence ‘telemarketing’ calls.

ATDS
Honda argued that although a predictive dialer was used, the CellPhone Server integrated into the system did not have the capacity to progressively, sequentially, or randomly dial mobile numbers. Plaintiff countered that the two operated as single system capable of initiating automated calls, thus constituted an ATDS. The court determined these genuine issues of material fact made the matter unsuited for a ruling at the summary judgement stage.

Consent
The court ruled that although plaintiff provided his number, the calls were likely telemarketing (“made for customer service purposes and to increase future sales and revenue“), thus required Prior Express Written Consent. Honda had yet to demonstrate it obtained such consent.
[C.D. CA; 2:15-cv-04410]
jbho: a reminder that surveys can be considered marketing, and the determination of whether a call constitutes ‘telemarketing’ will be based on the perception of the recipient (and the courts) – not your intent – so don’t try to overload ‘informational’ calls with dubious content.

Note the court referenced Chesbro v. BestBuy in its decision making (loyalty program reminder robocalls were telemarketing).

Note also that the court simply and briefly noted that plaintiff automatically had standing under Van Patten v. Vertical Fitness.


Phone User (Non-Subscriber) Has Standing, Concrete Harm For Unanswered Calls

Tillman v. Ally
Defendant’s MSJ denied – Ally allegedly made autodialed and prerecorded debt collection calls to plaintiff’s mobile. Calls allegedly continued despite informing Ally it had reached a wrong number. Plaintiff claimed he installed a paid call-blocking app to avoid calls from Ally (although the app would still direct those calls to voicemail).

The court ruled plaintiff had statutory standing, even if we was not the “subscriber of the cell phone service” (i.e., the ‘called party’). The ‘called party’ determination was only relevant in determining if a call violated the TCPA, not who may bring suit. As the primary user of the phone, who received the calls in question, plaintiff fell “within the zone on interests protected by the TCPA.” That plaintiff shared his phone with his girlfriend was irrelevant, as he remained a person within the ‘zone of interest.’

Plaintiff had constitutional standing since even if he was away from his phone when an unwanted call was received, since he would still receive notification of a voicemail (didn’t have to be aware of the call when it occurred to be harmed). This intrusion upon seclusion was a concrete injury the TCPA intended to prevent. That plaintiff was not charged for the calls was irrelevant, as (1) economic injury was not required for Article III standing, and (2) the TCPA contemplated lack of actual damages, since it gives plaintiff the option of seeking actual or statutory damages.
[M.D. FL: 2:16-cv-00313]
jbho: so you have to have the consent of the person you’re calling, not just the owner of the phone. It would be interesting to see if consent of a subscriber would override an opt-out by the primary user, but that’s a story for another time…

Looks like the call blocking app played a role in the court’s decision. Not quite the automatic standing we’re seeing in the 9th, but furthers the proposition that you don’t have to answer a call to be harmed.


Affirmative Choices By App User Make Her – Not The App – The Sender

Reichman v. Poshmark
Defendant’s MSJ Granted – Poshmark allegedly sent an unsolicited (ATDS) marketing text to plaintiff’s mobile. Poshmark allegedly sent the text through a forward-to-a-friend feature in its mobile app that would ask users to share the app, and then execute an address book blast. Plaintiff alleged the texts were sent without informing app users texts would be sent, and without confirming whether the app user had the consent of potential text recipients.

The court found the app user actually caused the text to be sent. The process implemented by the Poshmark app required the user to:
• Grant the app permission to access a contact list
• Tap on a ‘Find People’ button
• Choose the ‘Find friends from your contacts’ option
• Select individual contacts or all contacts
• Click an ‘Invite’ button to send the invitations
This meant the user – not the app – made the call.

The court also found that in compiling an ‘invite’ list, the app displayed email addresses & phone numbers next to each name, indicating how the invitations would be sent. However, this was not relevant in determining who made the call.
[S.D. CA; 3:16-cv-02359]
jbho: Another case that indicates if you can introduce enough user interaction in the contact selection process, you may be safe moving forward with multiple invites per click. At least in the 9th. The court also referenced Cour v. Life360 (N.D. CA; 4:16-CV-00805) in making its determination (checking and unchecking boxes demonstrated the ‘affirmative choices by the app user’ called out by the FCC in its TextMe ruling). 


No Liability For Obfuscated Opt-Outs

Epps v. Earth Fare
Dismissed – Plaintiff enrolled in an Earth Fare text message program. Earth Fare allegedly continued to send text messages despite plaintiff’s attempts to opt-out. Her opt-out attempts included reply texts stating:
• “I would appreciate if we discontinue any further texts
• “Thank you but I would like the text messages to stop can we make this happen
• “I’m simply asking for texts to stop. I would appreciate that. Thanks
• “As I requested earlier I asked that the text would stop, I would greatly appreciate it. Thank you
In response to the above, Earth Fare would respond “Our system was unable to recognize the command: [text of received message]

The court found that plaintiff failed to reasonably revoke her consent. Each text sent by Earth fare included STOP & HELP instructions (“Text STOP to end, HELP for help+ T&C’s“). Since plaintiff ignored these ‘clear instructions’ and willingly chose a more burdensome method to opt-out, her consent to receive texts remained valid.

Plaintiff has appealed the ruling (Doc#36).
[C.D. CA; 2:16-cv-08221]
jbho: reassuring to see that contrived opt-outs are insufficient to support TCPA claims. Although, if the system doesn’t recognize an inbound text, I’d suggest including STOP & HELP instructions in the ‘unrecognized’ response (as in Viggiano v. Kohl’s). 

Also interesting, in its motion to dismiss (Doc #24-2), Earth Fare included other complaints filed by plaintiff alleging similar opt-out ‘failures.’ As mentioned previously, I’m seeing more and more of this evolving tactic in TCPA litigation.

Finally, the court also stated plaintiff failed to allege an ATDS, finding that “voluntary release of a user’s phone number do(es) not support a plausible inference that an ATDS was used (citation omitted).” Little detail is provided in the dicta, but I’m not sure I see the connection between a voluntary opt-in and a manual dialing system. We may see more on this at appeal.


Claims Fail Since No Express Revocation Of Consent

Self-Forbes v. Advanced Call Center
Defendant’s MSJ granted – Advanced allegedly made autodialed debt-collection calls to plaintiff’s mobile without consent, and allegedly continued calling despite her request calls cease. Calls were made to collect a debt accrued on a Synchrony QVC credit card.

The court found that plaintiff had consented to the calls by providing her phone number on the QVC card application. Despite the lack of any declarations or testimony from Synchrony, there was no question of the genuineness of the application or agreement she signed.

The court further found that plaintiff’s allegations she asked calls cease were unsupported by call logs produced by Advanced. Of the 500+ calls made, none resulted in direct contact with plaintiff. Under Van Patten v. Vertical Fitness [9th Circ.; 14-55980 (orig: S.D. CA; 3:12-cv-01614)], “Revocation of consent must be clearly made and express a desire not to be called or texted.”  Since plaintiff failed to produce evidence of contact with Advanced, her consent to receive the (ATDS) calls was never revoked.
[D. NV; 2:16-CV-1088]
jbho: illustrates the importance of keeping accurate (and authentic) records of consent and any revocation of consent.

April 2017

TCPA Violations Automatic Concrete Harm

Brinker v. Normandin
Motion for reconsideration granted – Normadin, through its agents, allegedly made unsolicited, autodialed and prerecorded telemarketing calls to plaintiffs’ mobiles, some of which were registered on the national Do Not Call list.

The court initially dismissed the case, finding that due to the low number of calls, injuries were ‘too minimal’ to establish standing. On motion for reconsideration, the court referenced the 9th Circuit’s recent decision in Van Patten v. Vertical Fitness [9th Circ.; 14-55980 (orig: S.D. CA; 3:12-cv-01614)], where the court ruled any TCPA violation is a concrete, de facto injury (Van Pattern had standing for two ATDS texts). Based on this precedent, the court reversed itself, and reopened the case.
[N.D. CA; 5:14-cv-03007]
jbho: reinforcing the developing trend that TCPA violations are concrete harms by default (and Spokeo is a no go).

Also a reminder that plaintiffs can double-dip for violations of §227(b) & §227(c).

Flu Shot Reminders Are Health Care Message

Zani v. Rite Aid
Defendant’s MSJ granted – Rite Aid allegedly made an unsolicited, prerecorded message call ‘advertising’ flu shots to plaintiff’s mobile. Plaintiff claimed the prerecorded call did not contain an automated, interactive opt-out, and employees at his local Rite Aid location could not make the calls stop. The one call plaintiff received was made one year after he had a received a flu shot at Rite-Aid.

The court found that the calls ‘advertising’ flu shots where health care messages:
• The call concerned a health-related product/service (prescription medication administered at Rite Aid)
• Plaintiff had availed himself of the service the previous year (Rite Aid only called individuals it vaccinated the previous year)
• The call concerned an established medical need of the recipient (plaintiff’s advanced risk of influenza)

The court further found the call was made by a Covered Entity (or alternatively Rite Aid HQ made the call as a Business Associate of the location that administered the vaccination).

Thus the flu shot calls – as advertisements – qualified for the TCPA’s health care message exception, and required only prior express consent. Since plaintiff provided his number on a flu shot form (when receiving a flu shot the previous year), he consented to the call.
[S.D. N.Y.; 1:14-cv-09701]
jbho: so the courts are starting to clarify the definition of a “health care” message. The dicta does a nice job of breaking it down. A mess that could have been avoided if the FCC had offered some guidance back in 2012.

Also worth noting, the court did say plaintiff had standing (2nd circuit holds that TCPA violations result in concrete harm by their nature).

March 2017

Plaintiff Has Standing For Automated Text Responding To Online Classified Ad

Mohamed v. Off Lease Only
Order on standing – Off Lease Only, in concert with its partners and agents, allegedly sent unsolicited (ATDS) texts offering to buy plaintiff’s vehicle. Although he had listed a vehicle for sale on Craigslist, plaintiff claimed his ad stated: “do NOT contact me with unsolicited services or offers,” “Please don’t text me,” and “please be serious before calling.”

The text read:

We are cash buyers for local vehicles. Get a cash offer 24/7 – http://bit.ly/p9z972L – Off Lease Only Miami

Plaintiff alleged Defendant’s acquired his number by scraping Craigslist to obtain numbers for lead gen purposes. Others allegedly received similar unsolicited texts.

The court found that harms were clearly particularized, as plaintiff was affected in a “personal and individual way.” It further found that harms were concrete since a violation of the “substantive privacy rights” the TCPA protected were far from a bare procedural violation. Plaintiff need not (and did not) plead tangible harms of temporary, unwanted occupations of an individual’s time and electronic device. Citing Justice Thomas’s concurrence in Spokeo, the court found interfering with an individual’s (statutorily created) right meets the injury-in-fact requirement.

The court also found Plaintiff did not expressly consent to the texts, since his ad stated his desire not to be contacted by text.
[S.D. FL; 1:15-cv-23352]
jbho: another indicator that TCPA violations are concretes harms by default.

Interesting case. It would seem the offer to buy a car was related to the purpose for which the number was ‘provided’ on Craigslist. However, the court referred to the text as an ‘advertisement,’ and noted plaintiff stated no texts in his ad.

I have to say, the complaint contains one of the most colorful opt-out attempts I’ve seen so far. And it appears it was recognized.

f-u-opt-out

Another phrase you should consider adding to your STOP keywords.

Consent To Call On Current Loan Extends To Previous Loan

Stauffer v. Navient Solutions
Defendant’s MSJ granted – Navinet allegedly made autodialed, prerecorded debt collection calls to plaintiff’s mobile, as often as 4-5 times per day and on weekends. Plaintiff claimed she did not provide her number to Navinet and never consented to the calls. Calls allegedly continued despite requesting they stop.

Proceedings revealed plaintiff had provided three separate phone numbers over the course of 4 years:
• 5039 number – in 2010 for an initial student loan
• 1687 number – in 2012 when executing an unemployment deferment
• 3005 number – in 2014 for a student loan at a separate school
Plaintiff signed agreements providing consent to be contacted in each of the above cases.

Navient had serviced both student loans since May 2013. It claimed it stored numbers at an account, and not a loan, level. Navinet called the 3005 number about the 2010 loan 81 times, and ceased calling when plaintiff informed Navinet a wrong number had been reached (plaintiff subsequently conceded she never revoked consent at the 3005 number).

Plaintiff argued that Navinet had no consent to call the 3005 number about the 2010 loan, as it had not been provided ‘during the transaction that resulted in the debt owed.’ The court disagreed, and found that the number was provided in the context of a business relationship, since both loans were serviced on the same account by the same creditor. Thus Navinet had prior express to call the 3005 number as it was provided in the course of their ‘normal business relationship.’
[M.D. PA; 1:15-cv-01542]
jbho: interesting result, as this ruling reinforces the opinion that consent attaches to any number provided over the course of a relationship – not just the one provided on the agreement. Per the court, “the ruling affirms the unremarkable principle that a creditor may call a debtor at a wireless number provided by the debtor in the course of their business relationship.”

Debt Collector’s System Might Be An ATDS After All

Flores v. Adir International
Reversed and remanded – Adir allegedly sent unsolicited (ATDS) text messages regarding a confidential matter. Plaintiff stated the initial text read:

DEBE LLAMAR HOY MISMO A ADIR INTERNATIONAL, LLC AL 213-639-2090 O EMAIL diegov@icuracao.com PARA INFORMACION CONFIDENCIAL Ref # 83530918 Reply STOP to Cancel.”

After replying stop, plaintiff stated he ‘almost immediately’ received the following text:

Curacao-Gracia! Usted no recibira mas alertas Curacao y sera eliminado de la lista. Para informacion envie un email Mercedesg@icuracao.com

Plaintiff claimed he received the initial text at least three more times, and replied STOP each time. Plaintiff’s cell phone carrier charged him a fee for each incoming text message.

Plaintiff’s claimed an ATDS was used since (i) both the initial and opt-out confirmation texts did not identify the recipient, (ii) both texts were ‘scripted and generic,’ and (iii) the opt-out confirmation texts came ‘almost immediately.’

The district court ruled these were insufficient to allege use of an ATDS, since plaintiff conceded that defendant was specifically targeting him about a specific debt, and not the recipient of of a mass marketing blast (the targeting being inconsistent with random or sequential number generation). Additionally, each text contained the same reference number. Moreover, while an immediate response may indicate some form of automation, automation alone was not enough to satisfy the definition of an ATDS. The court conceded it was possible an ATDS was used, however, plaintiff must allege contextual facts to take his allegation “across the line from conceivable to plausible.” Thus plaintiff’s claims were dismissed.

The appellate court (in an unpublished, non-precedential opinion) determined it was reasonable to assume the system possessed the requisite capacity to store or produce numbers, even if that capacity was not used. Since the lower court focused only on dialing, it failed to “construe the pleadings in the light most favorable to the non-moving party” and thus reversed the decision and remanded the case.
[9th Circ.; 15-56260 (Orig: C.D. CA; 2:15-cv-00076)]
jbho: The capacity question rears its head again. Although the appellate court stopped short of calling the system an ATDS, it did say, “drawing on the court’s judicial experience and common sense, it is reasonable to infer that the equipment used has the capacity to ‘store or produce telephone numbers to be called, using a random or sequential number generator,’ even if it was not presently being used for that purpose” (emphasis added, internal citations omitted). So a broader definition of ATDS appears to prevail in the 9th.

Also interesting, this is the first debt collection text message case I’ve seen. Let me know if you’ve seen others.

TCPA Claims Survive, UCL Claims Not Quantified

Holt v. Facebook
Dismissed in part (leave to amend) – Facebook allegedly sent unsolicited (ATDS) texts to plaintiffs mobile. Plaintiff claimed she was not a Facebook user, and never provided her (reassigned) number to Facebook. The texts allegedly asked her to post status updates to her account, and did not include opt-out instructions. Sample texts in the complaint read:

“What are you up to? Reply with a status update to post to Facebook or go to “

“Your friends have posted [x] updates this week. Reply to post your own status on Facebook or go to “

Texts allegedly continued despite STOP replies.

The court found plaintiff plausibly alleged use of an ATDS, since the texts contained generic elements, and the same messages were received by many individuals. Additionally, there was no evidence any third party or Facebook employee was involved in sending the messages.

The court denied Facebook’s constitutionality challenge based on the same logic in Brickman.

Claims under California’s Unfair Competition Law (UCL) were dismissed, as plaintiff failed to quantify damages resulting from “diminishment”. The court did however grant leave to amend on those claims.
[N.D. CA; 3:16-cv-02266]
jbho: best to honor STOP requests, and not make people login to opt-out of text messages. Here plaintiff couldn’t opt-out since she couldn’t change the message settings of a Facebook account that did not belong to her.

The court did mention Duguid, where ATDS claims were dismissed (login notification texts triggered by a human act directly related to the specific user’s account), and Brickman, where ATDS claims survived (birthday announcement texts where not shown a person ordered a specific message). The court felt the texts here fell in with the latter, stating (in addition to the above) the variable number in certain texts could have easily been a system threshold, and not necessarily an indication of human intervention.

However, the court seemed to go off track by stating the lack of a pre-existing relationship with Facebook was not suggestive of human intervention. This seems to me more like a consent argument, since a human can dial a wrong number same as a machine, n’est-ce pas? Also troubling, the court found it relevant that the texts were sent from a short code (“short codes often indicate use of an ATDS”). I guess the court wanted to wait until discovery to sort that out. “Because text message recipients have no way to deduce the specific type of dialing system a sender uses without discovery, courts allow TCPA claims to proceed beyond the pleading stage where plaintiff’s indirect allegations about the messages “raise an inference that an [ATDS] was utilized” (citing Duguid).”

Deposited Check Doesn’t Moot Class Claims

McCombs v. Cayan
Motions to dismiss denied – Wells Fargo, through its agent Cayan (d/b/a Capital Bankcard), allegedly sent an unsolicited (4 page) fax, that failed to include a proper opt-out notice. Plaintiff claimed she had no prior relationship with Cayan or Wells Fargo, and did not request any of their services.

Plaintiff moved to certify a class 9 days after filing her original complaint. On the same day, defendants served an offer of $7,500 (to cover the fax and costs incurred) – an offer which plaintiff rejected. Nine days after that, the Supreme Court issued its ruling in Campbell-Ewald v. Gomez. Defendants then repeated the offer and included a check for $7,500. Plaintiff again rejected the offer and returned the voided check. The Court later denied defendants’ motion to deposit funds with the Clerk of Court. It did however permitted them to deposit a $7,500 check with a trusted intermediary.

On defendants’ motion to dismiss, the court found:

  • Plaintiff had standing, as a violation of the TCPA gives rise to a concrete injury
  • Deposit of the check did not moot, since:
    • plaintiff made her intention to pursue class certification clear
    • the court had not entered judgment for the defendant
    • tenders may not be used to “undermine the purposes of the class action device
  • Defendants were promptly and adequately put on notice of the proposed class
    • although the initial complaint only generally referred to ‘class members’ and ‘the class,’ the class was defined shortly after in plainitff’s motion for class certification
    • seeking certification is the normal practice in TCPA cases

The court also found that the fax here named Wells Fargo first, advertised a Wells Fargo Service, contained a contract to which Wells Fargo was a signatory, and indicated Cayan represented Wells Fargo. Wells Fargo’s actual role, as well as claims of potential “sabotage liability” were issues for discovery and summary judgment.

UPDATE: 11April2017 – plaintiff accepted an offer of class wide injunctive relief, and a cash award of $7,500 (Doc#133).
[N.D. Ill; 1:15-cv-10843]
jbho: a fax case, but again instructive for procedural reasons. Still very difficult to pick-off plaintiffs in the seventh.

Additionally, the court rejected the contention that the cover sheet statement claiming “we called your office earlier” constituted proof of consent.
Also if you are tracking alleged non-compliant opt-out notices, here the text stated:

To be removed from our offer to LOWER your merchant cost, write REMOVE at the top and fax this back to (888) 519-4214 (emphasis in original)

And finally, a reminder the TCPA does apply to B2B marketing.

February 2017

$20M Jury Award For DNC Violations

Krakauer v. Dish
Dish, through its agents, allegedly made unsolicited telemarketing calls to plaintiff’s landline, a number on the national Do Not Call (DNC) list. Calls allegedly continued, despite plaintiff’s request to be added to Dish’s internal DNC list.

The jury held Dish accountable for calls made by its agent, and awarded $400 for each of the ~51,000 calls in question.

Notices have been approved, and any post-trial issues must be filed by 31 March 2017 (Doc # 314).

UPDATE: 9Mar2017 – Dish has filed a motion for new trial (Doc #320) citing “numerous prejudicial errors at trial (and) implor(ing) the jury to punish Dish for … conduct in 2004-2005, as opposed to the conduct at issue in the case.”

UPDATE: 6May2017 – the court denied Dish’s motion for a new trial

[M.D. N.C.; case number 1:14-cv-00333]
jbho: I’ve not seen many TCPA cases go to trial, but this is the first I’ve seen that included DNC violations (47 USC §227(c)).

Does Consent Extend To Affiliates?

Hoover v. Sears
Motion to dismiss denied – Sears, through its agent Vibes, allegedly sent some 68 unsolicited marketing (ATDS) texts to plaintiffs mobile. Plaintiff claimed he was not a Sears customer and never enrolled in the “Sears Alert Program.” Sears argued plaintiff consented to the texts through a double opt-in. Plaintiff replied he had previously enrolled in a K-Mart Shop Your Way (SYW) program, but that did not constitute consent to receive Sears texts (even though Sears owns K-Mart).

The court found plaintiff sufficiently alleged TCPA violations, which constituted an injury-in-fact. Additionally, as with other TCPA actions, the individualized nature of consent was better suited to be addressed at the class certification stage. Finally, with respect to ACA’s active challenge to the 2015 Omnibus Rulemaking, the court found a decision in the DC Circuit would not be binding in New Jersey, and the court was not convinced the issue at hand would be address there at all.

UPDATE: 27Apr2017 – Arbitration Compelled (Doc #43). The court found that plaintiff had agreed to the terms – that included the arbitration provisions – when he signed up for the KMart text program through a POS terminal.
https://jbho.blog/2017/06/18/pinpad-consent-creates-valid-contract/

[D. N.J.; 3:16-cv-04520]
jbho: I don’t believe the 2015 Omnibus order addresses that applicability of a consent – or revocation – across affiliates. The only mention I see is that the “one call safe harbor” applies across affiliates & subsidiaries (p.40 footnote 261). Although, I believe under DMA principles, affiliates are permitted to process opt-outs on a brand/division basis.

It appears the timing of the two programs is as follows:
• Plaintiff enrolled in K-Mart texts: 1Dec2014 – 11Sep2015
• Sears Texts Sent: 4Oct2015 – 26Jun2016
I haven’t seen anything that states how or if plaintiff ‘unenrolled’ from the K-mart program. Nor have I seen if the written consent for the K-Mart program specified whether Sears Holdings could send (additional) texts. Perhaps they will be produced during discovery. Let me know if you see anything.

Nonetheless, to err on the side of caution, I’d say you might want to:
• make it clear in your PEWC who will do the calling/texting (consent to receive calls/texts from [enumerated parties])
• specify the purpose(s) of the calls/texts (consent to receive calls/texts about [enumerated topics])
• If you’re running multiple programs, make sure the scope of a particular opt-out is clarified (e.g., STOP = “you’ve opted out of ‘program x'” STOPALL = ends all texts from shortcode/holding company)

You might also want to check out the DMA guidelines at https://thedma.org/wp-content/uploads/DMA_Guidelines_January_2014.pdf, and of course you should know the rules themselves: http://www.ecfr.gov/cgi-bin/text-idx?rgn=div6&node=47:3.0.1.1.11.12

 Another Court Rules Live Vox HCI Is Not An ATDS

Smith v. Stellar Recovery
Report and Recommendation – Stellar, on behalf of its client, allegedly made autodialed and debt collection calls to plaintiff’s mobile, for a debt that had been discharged in bankruptcy. On motions for summary judgement, magistrate found:

  • The Right Party Connect (RPC) system was an ATDS (simply click play, and the LiveVox RPC predicatively dials all the numbers in a campaign)
    • Plainitff’s MSJ should be granted for any calls made through the RPC system
    • Questions of fact remained as to whether treble damages were warranted
  • The Human Call Initiator (HCI) system is not an ATDS (clicker agents must accept and confirm each phone number in order to place a call)
    • Defendant’s MSJ should be granted for any calls made through the HCI system

[E.D. MI; 2:15-cv-11717]
jbho: if a human is doing the predicting, your system may not be an ATDS after all.

So now a court in the 6th has joined the 11th (Pozo v. Stellar Recovery: M.D. FL; 8:15-cv-oo929) in ruling HCI is not an autodialer. Interesting trend developing.

Revocation Of Consent Must Be ‘Express’

Van Patten v. Vertical Fitness
Affirmed – Vertical Fitness allegedly sent unsolicited text messages to plaintiff’s mobile. Plaintiff provided his mobile number on a Gold’s Gym application (operated by Vertical Fitness), but later cancelled the account. When the gym changed brands to Xperience Fitness (still owned by Vertical Fitness), inactive members – including plaintiff – received text messages inviting them to join the re-branded gym.

The appellate court found that although TCPA violations by their nature were sufficient to establish an injury in fact, plaintiff consented to the texts (about a gym membership) by knowingly providing his number on the initial gym application. A “come back” message fell within the scope of that consent. Since the texts in question occurred before 16 October 2013, prior express consent was sufficient.

In response to plaintiff’s argument his consent should have been revoked upon cancellation of his membership, the appellate court found that “(r)evocation of consent must be clearly made and express a desire not to be called or texted.” Since plaintive took no affirmative action to revoke his consent, it remained valid.
[9th Circ.; 14-55980 (orig: S.D. CA; 3:12-cv-01614)]
jbho: interesting is that the court read into the TCPA an ‘express revocation’ requirement. A bit dichotomous, don’t you think? If prior express consent can be inferred by conduct, couldn’t revocation? Another reason we need the new FCC to help clarify.

Also, the court focused on the fact that ownership and operation of the gym never changed. I wonder what would have happened if a contact list was transferred as an asset in a purchase.

Finally, despite the court’s opinion, I’d advise it’s safest to consider a closed accounts as opted-out. Vertical Fitness came away with a win here, but after almost five years of litigation, this can’t have been a cheap victory (initial complaint entered on 28Jun2012).

TCPA Harms Concrete, But Consent Revocation Individual Issue

Cholly v. Uptain Group
Motion to dismiss denied – Uptain, on behalf of its client Alere, allegedly made autodialed debt collection calls to plaintiff’s mobile. Calls allegedly continued despite plaintiff’s request they stop, and informing Uptain she was filing for Bankruptcy. Uptain allegedly told plaintiff she must provide a bankruptcy case number to stop the calls. Calls allegedly continued, even after informing Alere in writing of her bankruptcy petition, which listed the debt she owed Alere. Plaintiff also alleged it was Uptain’s policy to deny oral revocation requests.

The court found that TCPA violations are concrete injuries, and plaintiff adequately alleged such injuries. That plaintiff failed to list calls made prior to filing for bankruptcy as a an asset had no impact on the litigation process (bankruptcy trustee has abandoned interest in such claims), and no estoppel was warranted.

However, the court did strike class claims, as the individualized issues of consent revocation would predominate over common questions. Thus the case could only proceed on an individual basis.
[N.D. Ill.; 1:15-cv-05030]
jbho: when someone says stop calling, STOP CALLING!

Additionally, I’d argue it’s probably best to consider a bankruptcy petition as a sign the debtor is represented by an attorney. Remember that PNC is settling a case where the court ruled PNC should have known plaintiffs were represented by an attorney, since its debt was listed in bankruptcy proceedings (Bray v. PNC: M.D. FL; 6:15-cv-01705).

Note also that although the court here previously dismissed revocation claims based on the bankruptcy petition, plaintiff has maintained a Bankruptcy Stay Sub-Class for purposes of appeal.

The Importance Of List Scrubbing (And Due Diligence)

O’Shea v. American Solar
Class certified – American Solar allegedly made autodialed telemarketing calls to plaintiff’s mobile, on a weekly basis, and as many as three times a day. Plaintiff stated he never consented to the calls, and calls continued despite requests they stop calling.

The court found that Defendant used a ViciDial predictive dialer to make 897,534 calls to 220,007 phone numbers purchased from list brokers. Thus numerosity was satisfied, and common issues prevailed. As plaintiff suffered the same harms as the rest of the class, he was adequate representation.

On consent issues, the court rejected defendant’s contention it was entitled to a good faith defense based on the fact it believed it was dialing landlines only (relying on list brokers). Furthermore, individualized issues regarding consent would not prevail as defendant could not assume consent simply because it was dialing a landline. Finally, the court found that even if a called party ultimately made a purchase, that consent would be subsequent to the call, and not the prior express consent required by the TCPA.

Similarly, individualized damages did not present barriers to certification as outbound call lists would identify with precision each number dialed and how many times it was dialed. Damages calculations would then be a simple process of multiplication.
[S.D. CA; 3:14-cv-00894]
jbho: when someone says stop calling, STOP CALLING.

Yet another reminder of the importance of good data hygiene, and that dealing with list brokers can be a risky business. If you are going to work with list brokers, make sure the data is collected in a fair and lawful manner, get representations and warranties that you have consent to use that data, and do your own due diligence to verify. Additionally, make sure you have well-constructed contractual agreements to make sure vendor obligations are clearly defined, and liability is appropriately distributed.


Facebook System Not An ATDS?

Duguid v. Facebook
Dismissed with prejudice – Facebook allegedly send (ATDS) texts to plaintiff’s mobile alerting him of someone else’s account logins. Plaintiff claimed he did not have a Facebook account, and texts allegedly continued despite following instructions provided by Facebook to stop the texts (replying “off”). The district court previously ruled that plaintiff failed to sufficiently allege an ATDS had been used (“… does not suggest that Facebook sends text messages en masse to randomly or sequentially generated numbers”), and dismissed the action with leave to amend.

In response to the amended complaint, the court found that the alleged TCPA violations were sufficient to confer standing, plaintiff again failed to plausibly allege an ATDS had been used. That facebook used a computer system did not mean “capacity” was present or could be trivially added, and plaintiff failed to allege any equipment pairing that would have resulted in the capacity to store or produce numbers and dial those numbers at random, in sequential order, or from a database of numbers. The court determined further amendment “would be futile” and dismissed the amended complaint with prejudice.
[N.D. CA; 3:15-cv-00985]
jbho: impressive to get a favorable ATDS ruling at the motion to dismiss phase. The courts usually allow discovery before making a call on ATDS claims.

Interesting that two very similar cases in the same district reached different conclusions about the ATDS definition. It appears the nature of the texts played a roll in classifying the system.
• In Duguid (above) it seems the event based alerts implied there was no storage or dialing from a list.
• In Brinkman (below) it seems the queuing of the day’s birthday messages implied there was storage or dialing from a list (although the court said it was a ‘close call’).
I doubt Facebook is using two distinct systems for the different text types – so which one is it? Another argument for much needed TCPA reform.


Facebook System Is An ATDS?

Brickman v. Facebook
motion to dismiss denied – Facebook allegedly sent autodialed birthday notification texts to plaintiff’s mobile. The text read:

Today is [Facebook friend’s] birthday. Reply to post a wish on his Timeline or reply with 1 to post “Happy Birthday!”

Plaintiff claims he never selected ‘active text messaging’ in his Facebook ‘Notification Settings,’ nor did he ‘Activate Text Messaging’ in his ‘Mobile Settings.’ Plaintiff contends by choosing to not activate text messaging, he affirmatively had NOT consented to receive text messages of any kind.

Facebook moved to dismiss on the basis no ATDS was used, citing the ruling in Duguid v. Facebook where login notification texts were determined to have not been sent by and ATDS (N.D. CA; 15-cv-00985). The court felt there were differences between the login notification texts in Duguid and the birthday texts at issue here. The court ruled plaintiff sufficiently alleged an ATDS could have been used: the Facebook system compiled a list of phone numbers, stored them in a a queue, and dialed them sequentially from that queue. That a human at some point must enter a number did not necessarily mean the system was not an ATDS, since “a person will always be a but-for cause of any action’s machine, “human intervention” for purposes of the TCPA requires more than but-for causation.”

On Facebook’s constitutionality challenge, the court ruled the limited number of exceptions*, carefully balanced against the interests of consumers meant the TCPA was not underinclusive. And since callers were always able to make manual calls, the TCPA was not overinclusive. Moreover, the TCPA serves a compelling interest in protection residential privacy. The TCPA therefore withstood a “strict scrutiny” review.

UPDATE: 27Apr2017 – the court has granted a motion for appeal (Doc #99) to address:
1) the definition of an ATDS
2) whether the TCPA, as a government content-based regulation of speech, is constitutional (survives strict scrutiny)
If an appeal is denied, the case will be stayed pending the D.C. Circuit’s decision in ACA v. FCC (D.C. Circ.; 15-1211).
[N.D. CA; 3:16-cv-00751]
jbho: another constitutional challenge bites the dust. However, the court did indicate that the ATDS ruling was a ‘close call’, and reached primarily based on the fact that at the motion to dismiss phase, allegations must be viewed in a light most favorable to the non-moving party.

* The exceptions addressed were those specifcally in the TCPA:
• emergency calls (§227(b)(1)(A)); and
• debts owed the governement (§227(b)(1)(A)(iii))
Facebook did not contest exemptions created under §227(b)(2)(C).

FYI – if you haven’t memorized it yet, you can read the TCPA at https://www.law.cornell.edu/uscode/text/47/227

Blue Shield Escapes Class Action Over Single Call

Smith v. Blue Shield
Defendant’s MSJ granted – Blue Shield allegedly made a prerecorded call to plaintiff’s mobile reminding her to renew her insurance policy. Plaintiff claimed she did not consent to the call and the recording provided no automated, interactive opt-out mechanism or call back number (as required by 47 CFR § 64.1200(b)(2)&(3)).

The court found that since the prerecorded message was “virtually identical” to the statutorily required written notice of renewal (required under the ACA), the call was informational, and not telemarketing. Therefore, written consent, an automated, interactive opt-out mechanism, or call back number were not necessary – plaintiff consented to the call by knowingly providing her number on the initial Blue Shield enrollment forms.
[C.D. CA; 8:16-cv-00108]
jbho: interesting to note, is that the court did spend several pages stating plaintiff had standing since “TCPA violations necessarily cause harm to consumers” (p.10).

No Vacation From The TCPA

Glasser v. Hilton
Motion to dismiss denied – Hiltion allegedly made autodailed calls promoting vacation packages to plaintiff’s mobile without prior express written consent. Hilton argued plaintiff failed to allege a concrete injury, and that plaintiff consented to the calls when she signed up for the HHonors program.

The court found that invasion of privacy, depletion of battery, and being charged for incoming calls were sufficient to allege concrete injury – plaintiff didn’t have to allege she actually answered the calls. The court also ruled consent was a merits issue, and not relevant in determining standing or jurisdiction.

Finally, the court also fond that Hilton failed to show evidence it bound Plaintiff to an agreement with a valid forum selection clause, so the case would remain in the 11th (for now).
[M.D. FL; 8:16-cv-00952]
jbho: seems the Spokeo defense still has little influence over TCPA cases.

December 2016

Consent Not Individualized When A Purchased List

Bridging Communities v. Top Flite
Reversed and remanded – Top Flite, through its vendor B2B solutions, allegedly sent unsolicited faxes to some 4,000 numbers. Plaintiffs claimed they never consented to the faxes and there was no established business relationship (EBR) with Top Flite. The district court denied class certification ruling that class claims failed on predominance, as determining whether individual class members might have solicited or consented to the faxes would require investigation of the factual circumstances for each number that received a fax. Top Flite then made an offer of full relief on plaintiffs’ individual claims, which was rejected. The district court then dismissed the individual claims as moot.

The appellate court found that the District court erred in dismissing class claims, as
• The faxes were sent to a list obtained from a list broker,
• B2B did not contact anyone on the list to verify consent, and
• Top Flite merely argued class members might have given consent without providing evidence to support that supposition.
This possibility of defense was insufficient to defeat the predominance requirement, so the district court abused its discretion in denying class certification.

Additionally, the Supreme Court’s ruling in Campbell-Ewald stated that an unaccepted offer had no operative effect, and although the SCOTUS decision was reached while the current case was on appeal, the appellate court must apply the law in effect at the time it rendered its decision.
[6th Circ.; 15-1572 (orig: E.D. MI; 2:09-cv-14971)]
jbho: A reminder that dealing with list brokers can be a risky business. If you are going to work with list brokers, make sure the data is collected in a fair and lawful manner, and get representations and warranties that you have consent to use that data, and do your own due diligence to verify. Additionally, make sure you have well-constructed contractual agreements to make sure vendor obligations are clearly defined, and liability is appropriately distributed.

Also, a reminder to vet your vendors not only on performance matters, but on liquidity as well. The now bankrupt B2B Solutions has been the focus of many TCPA cases. For example, In City Select Auto Sales v. David Randall Associates, a $1,775 agreement with B2B lead to a $22M TCPA settlement (D. N.J.; 1:11-cv-02658). In American Copper & Brass v. Lake City Industrial Products, Lake City paid B2B $92 dollars to send some 10,000 unsolicited faxes, and ended up being on the hook for a $5.2M TCPA judgement – ultimately leading to the bankruptcy of Lake City Financial (W.D. MI; 1:09-CV-1162).

And finally, yet another reminder that the TCPA applies to faxes.

Depositing Funds Alone Does Not Moot Claims

Wendell H. Stone Co. v. Metal Partners Rebar
Motion to dismiss denied – Metal Partners allegedly sent unsolicited faxes that failed to include the statutorily required opt-out notice. In response to plaintiff’s class complaint, Metal Partners filed a motion to deposit funds and entry of judgement. Plaintiffs subsequently filed a ‘placeholder’ motion for class certification.

The court found that defendant could not create a jurisdictional bar to plaintiff’s claims by imposing a judgment on plaintiff through a motion to deposit funds. The court went on to say an actual deposit of the full amount owed to the plaintiff could not render individual claims moot. Even if accepted by plaintiff, that only provided defendant with affirmative defense rather than a jurisdictional bar.

Similarly, as individual claims could not be mooted, class claims remained active as well (plaintiff had not been given the opportunity to pursue discovery thus had not received a fair opportunity to pursue class certification). Moreover, plaintiff moved for class certification before the Court granted Metal Partners permission to deposit funds and before any entry of judgment.

Finally (almost as an afterthought), the court indicated the number of faxes sent to plaintiff had yet to be determined; another reason an entry of judgment could not be made, as the amount offered by Metal Partners may not constitute full relief.
[N.D. Ill; 1:16-cv-08285]
jbho: another fax case, but I again found interesting for the procedural elements. Here the court indicated that “even if the district court were to enter judgment on the plaintiff’s individual claims before class certification, the plaintiff would still be entitled to seek class certification,” quoting the 9th Circuit decision in Chen v. Allstate (13-16816). Continuing by referencing the 3rd Circuit opinion in Richardson v. Bledsoe (15-2876), the court went on to say “The message from these courts is clear: plaintiffs pursuing class claims will not find those claims undermined by the defendant’s attempt to pick them off.” Another indication that SCOTUS’s on-the-fence-ruling in Campbell-Wald did little to resolve the circuit splits.

November 2016

Text Reminder to Finish Web Order Not Telemarketing

Wick v. Twilio
Dismissed – Twilio allegedly sent an unsolicited text message to plaintiff who had abandoned an internet order. Plaintiff provided his number – a number on the national do not call list – on a webform to order a ‘free’ product, but then changed his mind before completing the order. The text read:

Noah, Your order at Crevalor is incomplete and about to expire. Complete your order by visiting http://hlth.co/xDoXEZ.”

In addition to the text, plaintiff ‘simultaneously’ received a telephone call encouraging him to complete the order.

Plaintiff claimed he did not expect, nor had he consented to, either the text or the call, the purpose of which were to promote, market, advertise, or encourage the current or future sale of Crevalor products (requiring Prior Express Written Consent).

The court found the purpose of the communications were simply to remind plaintiff to complete his order so he could receive his free product. These ‘customer service’ contacts did not constitute telemarketing. As plaintiff knowingly provided his number on the order form, he provided his prior express consent to receive the reminder text and call. CEMA claims also failed, as the text was not ‘commercial.’
[W.D. WA; 2:16-cv-00914]
jbho: Interesting decision. It seems the ‘free’ nature of the product may have been critical, as the opinion repeatedly states the calls were about a free sample/product. I wonder what the outcome would have been had the calls been related to an abandoned purchase?

Although the court did not discuss it, the complaint goes into technical detail and code review to describe how the Twilio platform – through APIs used to execute calls/texts – has the active capacity to dial a ‘list’ of uploaded numbers. Would have been interesting to see how the court landed on that one.

Plaintiff-Initiated Text Not PEWC

Larson v. Harman Mgmt (A&W)
Motion to dismiss denied – Harman Management Corporation (HMC) allegedly enrolled plaintiff’s mobile in a recurring text program without Prior Express Written Consent (PEWC). Plaintiff texted the word “BURGER” to receive a free A&W Papa Burger Single, and immediately received the following message:

You have joined A&W Mobile Alerts. Up to 30 messages per month. Text HELP for help. Text STOP to cancel. Message and data rates may apply.”

Plaintiff subsequently received several texts that (allegedly) advertised the availability of and encouraged the purchase of goods at A&W Restaurants.

The court found that although plaintiff consented to the first text by making the request, that request did not constitute the Prior Express Written Consent needed for the subsequent marketing texts (and the court found those subsequent texts were ‘plausibly’ marketing).
[E.D. CA; 1:16-cv-00219]
jbho: something to keep in mind. Even if your text program is fully MMA/CTIA compliant, that may not be enough for TCPA compliance.

In this case, the text campaign was promoted through in-store signage/TV/print ads, and went viral through social media channels. Plaintiff stated he learned of the free burger promotion through word of mouth.

Perhaps the solution may have been to implement a double opt-in. Then the first (legal) text simply asks the recipient to confirm enrollment – and thereby evidences Prior Express Written Consent for future texts?

Also, yet another case where plaintiffs use snippets of computer code to back their case. Plaintiff quotes 3seventy’s API documentation to allege the system had the capacity to generate random and sequential numbers.

Botched Data Transfer Leads To TCPA Liability

Etzel v. Hooters
Motion to dismiss denied – Hooters allegedly sent (ATDS) marketing texts to individuals who declined to opt-in in advance of the 16 October 2013 PEWC rules going into effect. Hooters then moved to a new text provider, and in the transition, the consent records – who had replied to the PEWC requests – were apparently corrupted.

The court found* that sending text messages in violation of the TCPA – even a single text – constitutes a concrete injury in fact to the recipient.

*quoting heavily from Mey v. Got Warranty (N.D. W.V.; 5:15-cv-00101)
[N.D. GA; 1:15-cv-01055]
jbho: reminder of the importance of good data hygiene, especially if you plan to switch SMS providers.

Attorney Representation Constitutes Revocation Of TCPA Consent?

Bray v. PNC
Motion to dismiss denied – PNC allegedly made autodialed and prerecorded debt collection calls to plaintiffs’ home and mobile numbers, despite being informed in writing plaintiffs were in bankruptcy. Claims were filed under the TCPA and FCCPA.

FCCPA
PNC argued that notice plaintiffs were being represented in a bankruptcy case did not mean plaintiffs were represented for the specific debt PNC sought to collect. The court disagreed, finding “(a) bankruptcy proceeding is ultimately a proceeding to organize or liquidate all of the debtor’s financial obligations.” Since the debt was listed in the bankruptcy proceedings, PNC should have known plaintiffs were represented for the specific debt.

TCPA
Plaintiffs argued they never consented to the calls, and if they did give consent, it was subsequently revoked. The court felt PNC offered no evidence it had consent to contact plaintiffs. Thus there was insufficient evidence to rule on the TCPA claims at the motion-to-dismiss stage.

UPDATE: 20Feb2017 – parties have reached a confidential settlement and the case has been dismissed (Doc #48).

[M.D. FL; 6:15-cv-01705]
jbho: once you know someone is represented by an attorney, probably a good idea to opt them out of future calls.

Disputes Over Oral Consent

Espejo & Levins v. Santander
Ruling on consolidated class claims – In Pereir/Espejo, Santander allegedly made autodialed debt collection calls to skip-traced and wrong numbers, and continued calling after being asked to stop. In Bonner/Levins, Santander allegedly made autodialed & prerecorded debt collection calls without consent, and continued calling despite requests to stop.

Espejo
Santander allegedly contacted Espejo at a number he used to contact Santander. Santander claimed he consented to future contact on the call. Espejo claimed when asked if that was a number to contact him, he responded ‘yes’ to confirm his identity, NOT to permit him to be contacted at the number. Santander also disputed whether Espejo actually asked for calls to stop. The court found these disputes were questions to resolve at trial.

Levins
Santander allegedly contacted Levins at three different numbers:
• one on her credit application (6954) – defendant’s MSJ granted
• one where Levins eventually gave consent (9678) – parties agreed on liability for four calls made before consent obtained (doesn’t say how)
• one in Santander case notes listed as “a good number”, but plaintiff claims Santander never verified (6074) – class certification denied
That plaintiffs challenged the content, clarity, accuracy, and completeness of Santander’s case notes made Levin’s class unascertainable. Class claims also failed on commonality and predominance due to the individualized nature of consent.

ATDS
Santander also argued the “Aspect Telephone System” was not an ATDS, since agents had to push a button to initiate calls. The court disagreed, finding that although agents may push a button, this was only to signal availability so the Aspect system could (auto)dial numbers from an uploaded list and algorithmically assign the call to an available agent. Thus, the Aspect dialer – not the agents – made the calls.
Espejo v. Santander (Pereira v. Santander) [N.D. Ill; 1:11-cv-08987]
Levins v. Santander (Bonner v. Santander) [N.D. Ill; 1:12-cv-09431]
jbho: make sure scripts used to obtain oral consent are clear (maybe send a confirmation email as well).

A reminder that preview mode dialing is no safe harbor.

October 2016

LiveVox HCI Still Not An ATDS

Pozo v. Stellar Recovery
Dismissed without prejudice (private settlement) – Stellar allegedly made autodialed and prerecorded debt collection calls to plaintiff’s mobile after receiving his written cease and desist request. Stellar also allegedly failed to identify itself as a debt collector, repeatedly called debtors with intent to harass, as well as repeatedly called third parties looking for information about the debtor.

The district court granted Stellar’s motion for summary judgement on TCPA claims, ruling the human intervention component of the LiveVox HCI meant it did not constitute an ATDS. Plaintiff filed a motion for reconsideration on that ruling (Doc#65). The parties subsequently reached a private settlement, and the case was dismissed without prejudice (Doc#75).
[M.D. FL; 8:15-cv-00929]
jbho: follow up on from last month. It would have been interesting to see if the HCI process would survive the additional scrutiny. PACER lists an order on the Motion for Reconsideration (Doc#74), but there is no link to that order. Perhaps Steller wanted to put this to bed based on the FDCPA claims (i.e., do 40 calls over a two-month period constitute harassment?).

Spokeo Defense Fails In The Tenth

LaVigne v. First Community Bank
Motion to dismiss denied – First Community Bank (FCB), through its agents, allegedly made autodialed debt collection calls to plaintiff’s mobile, calls intended for another person. Calls allegedly continued despite informing FCB it had reached a wrong number.

The court found that while plaintiff must show an injury-in-fact for each individual call, there was no minimum cost or harm threshold required for Article III standing (“(r)egardless of how small the harm is, it is actual and it is real”). Furthermore, the TCPA directly forbids autodialed calls to mobiles, and unlike the FCRA claims in Spokeo, there was no variation in the impact of a statutory violation of the TCPA. The receipt of unsolicited calls alone caused the concrete harm.
[D. N.M.; 1:15-cv-00934]
jbho: the court was critical of the recent decision in Romero v. Department Stores National Bank (S.D. CA; 3:15-cv-00193), where the court found there was no difference in harm from a manual or autodialed call. “Under Romero, it appears to be nearly impossible for a plaintiff to allege a private right of action under the TCPA for automated solicitation calls.”

September 2016

LiveVox Human Call Initiator (HCI) Not An ATDS

Pozo v. Stellar Recovery
Defendant’s MSJ granted on TCPA claims – Steller allegedly made autodialed debt collection calls to plaintiff’s mobile regarding another person’s debt. Calls allegedly continued despite plaintiff informing Stellar they had reached a wrong number and asking Steller to stop calling – verbally and in writing.

The court found that the Human Call Initiator (HCI) system used by Stellar did not constitute an ATDS since:

  • Each call initiated from HCI must be initiated by a human ‘clicker agent’
    • a ‘clicker agent’ monitors a real time dashboard which displays numbers to be called, along with ‘closer agents’ available to take the calls (a ‘closer agent’ is the one who actually speaks with the called party about the debt)
  • A ‘clicker agent’ must click a button to launch a call particular telephone number
  • A ‘closer agent’ must be available to take a call before HCI will allow a number to be dialed
  • If a call is answered, the ‘clicker agent’ transfers the call to a ‘closer agent’

Additionally, with respect to the capacity question, the court found:

  • HCI is separate from other dialing systems offered by LiveVox
  • HCI uses its own unique software and hardware
  • HCI does not use any statistical algorithm to minimize agent wait time between calls, nor does it incorporate any random or sequential number generator
  • HCI does not possess any features that may be activated to enable automated calling

The fact that Stellar might be able to hypothetically hire a team of programmers to modify and rewrite large portions of HCI’s code to be an autodialer did not mean HCI had the ‘potential functionality’ to be an autodialer within the meaning of the TCPA and the 2015 FCC Order.

Plaintiff has already filed a motion for reconsideration (Doc #65).
[M.D. FL; 8:15-cv-oo929]
jbho: another potentially helpful guideline in determining whether or not a system constitutes an ATDS.

This case is interesting for several reasons:

  1. The HCI appears to have predictive qualities, but a human does the predicting – a human pushes a button to make a call, then the machine routes the call to a waiting agent. Clever. 
  2. Plaintiff appears to have dropped FCCPA claims in his amended complaint. Perhaps since he is not the debtor, he had no standing? Wonder if this will impact the FDCPA claims.
    • Note: 15 U.S.C. § 1692d does say, “(a) debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” While FL 559.72(7) says, “(i)n collecting consumer debts, no person shall: … (w)illfully communicate with the debtor or any member of her or his family with such frequency as can reasonably be expected to harass the debtor or her or his family, or willfully engage in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her or his family.” (emphasis added)
      However, in Juarez v. Citibank (N.D. CA; 16-cv-01984) the court declined to dismiss Rosenthal Act claims since “(plaintiff) fits perfectly well into the second classification of debtor — those who are alleged to have a consumer debt.” (emphasis added)
  3. Will the jury determine that 40 calls over a two-month period constitutes harassment?

Stay Tuned…

Depositing Funds Moots Individual and Class Claims

Fulton Dental v. Bisco
Dismissed – Bisco allegedly sent fax advertisements without consent and without the statutorily required opt-out notice. Plaintiff rejected a settlement offer of $3,005 for the one fax he received ($1,500 for sending the fax and $1,500 for failing to include the opt-out notice). The offer was made prior to plaintiff filing a motion for class certification. Bisco then filed a motion to deposit $3,600 to cover the maximum amount of damages allowed by the TCPA, plus $600 for incidental costs.

On plaintiff’s individual claims, the court found that that:
1) Deposits are permitted even if they have substantive effects on the parties’ legal positions (immediate tender under Rule 67).
2) Bisco’s motion represented an “unconditional surrender” of funds without regard to the outcome of the lawsuit. This “unconditional surrender” meant there was no longer a live controversy on plaintiff’s individual claims.
3) Although the failure to receive declaratory relief could cause harm, such harm did not establish Article III standing.
4) Since the order will require Bisco to stop sending improper faxes to plaintiff, injunctive relief was also satisfied.
Thus, plaintiff would have no remaining personal stake in the litigation.

On class claims, the court found that plaintiff’s class claims were moot as Fulton failed to file a motion for class certification BEFORE its individual claims were mooted. The mere presence of collective-action allegations in the complaint could not save the suit from mootness once the individual claim were satisfied (at least not in the 7th).

Therefore, plaintiff’s individual and class claims were both mooted, and the case was dismissed for lack of subject matter jurisdiction.
[N.D. Ill.; 15-cv-11038]
jbho: a fax case, but still interesting for the procedural elements – in this case what it takes to successfully ‘pick-off’ the lead plaintiff.

Also, a reminder that plaintiffs can claim multiple TCPA violations for a single call/text/fax.

August 2016

Unwanted Calls Cause Harm Sufficient For Standing; ATDS Determination Is A “Merits Issue”

Ung v. Universal Acceptance
Motion to dismiss denied – Universal allegedly made autodialed debt collection calls to plaintiff’s mobile. The calls were intended for a tenant living in one of plaintiff’s properties. Plaintiff claimed he did not have an account with Universal, never provided his number to Universal, and that calls continued despite his requests they stop.

On Article III standing, the court found the FCC and Case Law have recognized the harms inherent in the receipt of automated calls, and that the receipt of unwanted phone calls constitutes a concrete injury sufficient to create standing under the TCPA.

On the ATDS question, Universal claimed the calls were manually dialed, but the court found “a defendant may transgress the (TCPA) by manually dialing an unwanted phone call, as long as the system used to make the call has the capacity to autodial.”

Interestingly, the court went on to say it made no difference whether the calls were manually dialed or autodialed because the resultant harm was the same. The question of whether the calls were autodialed or manually dialed was a merits issue, not a jurisdictional issue such as standing. Thus Universal’s Motion to Dismiss for Lack of Jurisdiction was denied.
[D. MN; 0:15-cv-00127]
jbho: a reminder that the interpretation of what constitutes an ATDS remains very broad.

Mercury Predictive Dialer Is An ATDS?

Manuel v. NRA Group
Plaintiff’s motion for summary judgment granted in part and denied in part – NRA allegedly made some 140 autodialed, prerecorded debt collection calls to plaintiff’s mobile, a number NRA obtained from a skip-tracing company who claimed it was a landline number. Calls continued despite plaintiff’s request they stop. Plaintiff claims he also submitted a complaint to the CFPB, after which the calls stopped.

NRA argued the calls were manually dialed, as human intervention was required for each call (pressing F4). However, the court found that the Mercury Predictive Dialer, as used by NRA did not require human intervention, as the F4 key merely signaled an agent was available to be transferred to a preexisting live connection. That the Mercury Predictive Dialer would automatically terminate calls when reaching an answering machine further illustrated the lack of human involvement in the dialing process.

Plaintiff’s motion for treble damages was denied, as there was insufficient evidence to demonstrate NRA knew, or should have known, it was dialing a mobile number. That determination was best left to a jury.
[M.D. PA; 1:15-CV-00274]
jbho: a reminder of the low bar in defining an ATDS.

Interestingly, the court hinted it may have reached a different result if collection agents had to affirmatively prompt the Mercury Dialer to place each individual phone call. Perhaps a lesson on how to tune call assist technologies to avoid the ATDS determination.

Also, this is not the first time the Mercury Predictive Dialer has been deemed an ATDS. A Florida court reached a similar decision in Brown v. NRA Group (M.D. FL; 6:14-CV-00610) in June 2015. In that case, the court declined to assess treble damages based on NRA’s claim it was unaware that the Mercury Predictive Dialer was in fact a predictive dialer. 

July 2016

Mobile App Dodges Suit Over Friend Invitations

Cour v. Life360
Dismissed – Life360, through a Forward-To-A-Friend invite feature of its mobile app, allegedly sent an unsolicited autodialed text to plaintiff’s mobile. The text read:

[Recipient’s name], check this out! life360.co/[hyperlink to Life360’s website]
Plaintiff claims he had no relationship with Life360, and never consented to receive the text.

The court found that although plaintiff had standing on injury claims, Life360 was not the maker/sender of the texts. The process employed by the Life360 app was consistent with processes the FCC determined made the app users – and not the app – the maker/sender of texts (2015 omnibus rulemaking on TextMe petition).

The process:

  • After downloading the Life360 app and creating an account, users were asked, “Want to see others on your map?”
  • Users who clicked ‘Yes’ were asked for permission to access their contacts
  • Users who allowed permission were then brought to an ‘Add Member[s]’ screen with a tickbox next to each contact o the Life360 app preselected ‘recommended’ contacts (prechecked tickboxes)
  • Users were presented an ‘Invite’ button showing the number of selected contacts o after pressing ‘Invite’, users could select to be notified when their contacts join
  • Users were not shown the invite, and could not edit the invite message
  • Users were not informed how invitations would be sent

The court deemed there was sufficient user intervention to make the app users the maker/sender of the texts. That the user could check and uncheck boxes demonstrated the ‘affirmative choices by the app user’ called out by the FCC in its TextMe ruling.

The court also found the fact that the Life360 app did not specify invites would be sent via text was irrelevant, as the channel was irrelevant in determining who “makes” a call.
[N.D. CA; 4:16-CV-00805]
jbho: I’d still advise against address book blasts, but look like if you can introduce enough user interaction in the contact selection process, you may be safe moving forward with multiple invites per click.

Lyft Partially Dodges Liability For User Generated Texts

Wright v. Lyft
Dismissed with prejudice – Lyft allegedly sent unsolicited (ATDS) text invitations through a Forward-to-a-friend feature of its mobile app. The text read:

Jo Ann C. sent you a free Lyft ride worth $25. Claim it at http://lyft.com/getapp/MD15M215.

The court found the processes implemented by Lyft made clear the texts were user generated invitations permitted under the TCPA (consistent with the 2015 FCC rulemaking addressing the TextMe petition). Users were prompted to access an “invite friends” function in the app which accessed the users address book and allowed the user to identify specific contacts or choose a “Select All” function. This multi-step process demonstrated the user made affirmative choices so as to be deemed the initiator of the call. TCPA claims were thus dismissed.

However, the court found plaintiff adequately plead claims under Washington’s Commercial Electronic Mail Act (CEMA), as CEMA does not distinguish initiators of a commercial message, and the message in question was “commercial” (citing Chesbro v. Best Buy). Additionally, claims under Washington’s Consumer Protection Act (CPA) as injury – however minuscule – were plausibly alleged (e.g., paying to receive the unsolicited text, losing full capacity of his phone, wear and tear on battery).
[W.D. WA; 2:14-CV-00421]
jbho: probably best to avoid offering consideration in Forward-to-a-Friend campaigns (makes the message marketing).

And a reminder it’s not just the TCPA, some states have telemarketing/anti-spam laws that are equally or even more restrictive.

Consumer Did Not Prove Revocation of Consent 

Reyes v. Lincoln Automotive Financial
Defendant’s MSJ granted – Lincoln allegedly continued to make autodialed debt collection calls after plaintiff requested they stop. The court found that the letter sent was insufficient to revoke consent as:
• it was vaguely addressed
• it was unsigned
• plaintiff had no recollection of sending
• plaintiff had no recollection of the address to which the letter was sent
• defendant had communicated to plaintiff the alleged letter was never received

Update – 22June2017: The appellate court found the district court erred in discounting the revocation letter, as there were actual facts in dispute that raised questions for a jury. However, the appellate court ruled that plaintiff had no right to revoke consent, as consent was obtained as a ‘bargained-for consideration in a bilateral contract.
https://jbho.blog/2017/06/25/tcpa-consent-not-revocable-if-part-of-contract/

[E.D. NY; 2:15-cv-00560]
jbho: Sounds like plaintiff may have been trying to entrap? All he had to do was say ‘stop calling’.

Also interesting here is that the Credit Terms and Conditions had a clause indicating plaintiff consented to Ford Credit using “any telephone number” provided by Plaintiff. I wonder if Ford would have got the same ruling if the calls had been to a skip-traced number?

No Injury Where Plaintiff Manufactured Claims

Stoops v. Wells Fargo
Defendant’s MSJ granted – Wells Fargo allegedly made autodialed debt collection calls to reassigned (wrong) mobile numbers. Plaintiff purchased 35 pre-paid phones in Pennsylvania, but specifically requested Florida area codes. Plaintiff admitted she selected the numbers specifically so they would appear to come from economically depressed areas – and were thus more likely to get collection calls – as part of her ‘business’ as a professional TCPA plaintiff.

The court ruled that despite the fact Wells Fargo made the calls without consent, she had suffered no injury to privacy interests (only purpose in using her cell phones was to get calls to file TCPA lawsuits), nor to her economic interests (purchased airtime for the sole purpose of receiving more calls). Furthermore, absent injury, plaintiffs interests did not fall within the ‘zone of interests’ intended to be protected by the TCPA.
[W.D. PA; 3:15-cv-00083 ]
jbho: bad news for TCPA trolls…

Robocalls Cause Concrete, Particularized Harm

Mey v. Got Warranty
Defendant’s motion to dismiss denied – Got Warranty allegedly made autodialed telemarketing calls promoting the extended automobile warranties to plaintiff’s mobile, a number that was on the National Do Not Call Registry.

The court found that unwanted phone calls cause concrete harm.

  • Tangible harms:
    • depleting phone battery / cost of electricity to recharge (“While certainly small, the cost is real, and the cumulative effect could be consequential.”)
    • depleting limited minutes / incurring charges for calls (for pre-paid phones)
  • Intangible Harms:
    • invasion of privacy
    • intrusion upon and occupation of the capacity of a phone (trespass to chattels)
      wasting the consumer’s time
    • causing the risk of personal injury due to interruption and distraction

[N.D. WV; 5:15-cv-00101]
jbho: another example of how plaintiffs can double dip for violations of §227(b) & §227(c).

More TCPA Fun

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