Last week, a magistrate judge in U.S. District Court for the Western District of North Carolina dismissed a Telephone Consumer Protection Act (TCPA) lawsuit brought by a plaintiff who claimed calls made by an insurance lead generator to her cell phone number, which was registered on the national Do Not Call (DNC) registry, were unlawful. The decision takes a view contrary to that of at least one other district court in the Fourth Circuit, but sides with a district court in Texas in finding that the do not call prohibitions of the TCPA do not encompass cell phones.

Does this latest decision, Gaker v. Q3M Insurance Solutions et al., mean that telemarketing calls to cellphone numbers listed on the national DNC list are actually OK? Probably not. For starters, since 2003, the Federal Communications Commission (FCC) has allowed cell phone numbers to be registered on the DNC list and interpreted the TCPA’s do-not-call prohibitions to encompass cell phone numbers. Other courts have followed the FCC’s lead in this matter. However, the judge’s reasoning in the Gaker case is interesting to consider, particularly for anyone following a textualist reading of Congress’s laws.

The TCPA: Relevant Background on Cell Phone Calls

The TCPA has historically been the vehicle that plaintiffs use to sue marketers for unwanted calls because the law provides a private right of action to enforce certain provisions of the TCPA. The TCPA also contains provisions specifically restricting calls to telephone numbers assigned to a “cellular telephone service.” Most notably, the TCPA prohibits calls made using an “automatic telephone dialing system” (commonly referred to as an autodialer) to make calls to numbers assigned to a “cellular telephone service” without consent. Over the years, the FCC has issued rules to enforce the TCPA, and private plaintiffs (including class actions) have used these interpretative rules to file lawsuits against marketers that often resulted in excessive windfalls for plaintiffs and their attorneys and massive headaches for legitimate businesses.

When calls to a cell phone were involved, the go-to allegation had been that the defendant used an autodialer to call the plaintiff’s cell phone without requisite consent. However, these allegations were rooted in broad interpretations of what an “automatic telephone dialing system” was that did not exactly match what Congress had in mind when it defined the term and passed the TCPA in 1991. In April 2021, the Supreme Court rolled back these broad views of the autodialer definition and provided some relief to those inflicted with TCPA lawsuits. You can read our discussion of the Supreme Court’s Duguid decision here.

Separate from the autodialer provisions, a different section of the TCPA allowed the FCC to enact rules to protect the privacy rights of “residential telephone subscribers,” including by establishing a list of “telephone numbers of residential subscribers who object to receiving telephone solicitations,” which the FCC established in 2003 in coordination with the Federal Trade Commission. At that time, the FCC declared that cellphone numbers could be listed on the national DNC list, and its rules prohibiting calls to numbers listed on the national DNC list were applicable to any person or entity making telephone solicitations or telemarketing calls to wireless numbers. Incidentally, the FCC also declared early in its TCPA implementation that “calls” include text message, thereby encompassing text messages in both the autodialer rule and the DNC rules.

Since the Duguid decision, and because of the resulting difficulty of alleging that a marketer used an automatic telephone dialing system of the circa 1991 variety, class action plaintiffs have emphasized violations of the TCPA’s DNC provisions to bring their cell phone lawsuits. Such was the case with Gaker in North Carolina, where the lead plaintiff alleged she had a personal cell phone registered on the national DNC list to avoid unwanted marketing calls. According to the plaintiff, after her name and phone number were entered into a sweepstakes, she received six calls from a lead generator. She apparently answered at least one of the calls, and the lead generator eventually transferred her to a seller of burial insurance policies.

Residential vs. Cell Phone Numbers

North Carolina Magistrate Judge David Cayer dismissed the claims in Gaker after noting that the court was not required to follow the FCC’s interpretation that the cell phone number could be included among “residential telephone subscribers.” Accordingly, Cayer determined that the DNC provisions of the TCPA provided that the regulations implemented pursuant to them concerned only the need to protect residential subscribers.

Using Merriam-Webster, Cayer concluded that a “resident” meant someone who lives in a place for some length of time. He also reasoned that Congress referenced “cellular telephone service” in other provisions of the TCPA, including the autodialer provisions, and deliberately did not reference cellular telephone service in the DNC provisions of the TCPA. Thus, Cayer said, Congress purposefully protected only the privacy rights of “residential telephone subscribers” in the DNC provisions.

That reasoning may make sense to others focusing on TCPA construction and interpretation. Cayer, following reasoning in a 2019 Eleventh Circuit case, which we wrote about here, further opined that cell phone privacy was not the same as residential telephone privacy. According to Cayer, cellphone mobility, coupled with the functionality of being able to silence declined calls, alleviated privacy concerns. He noted that the plaintiff in Gaker alleged no facts about whether she was at home when she received the calls or whether her phone was in silent mode.

Issues to Watch

Whether Cayer’s opinion gains traction in other jurisdictions remains to be seen. Many people believe Congress must update the TCPA, its definitions, and structure to bring the law into the current century. The issues in Gaker may serve to highlight this need.

However, modernizing the TPCA may not be high on Congress’s list of priorities. We have seen state legislatures stepping up to refine and update their state-specific telemarketing laws, including in the autodialer space, to bridge the gaps created by the Supreme Court’s Duguid case. Few states, however, manage their own state-specific do-not-call list and instead use the federal list.

Venable has several attorneys who are well versed in federal and state telemarketing and texting compliance matters that include monitoring developments at the FCC, tracking legislative proposals and solutions, advising on compliance with federal and state laws, and defending threatened and filed claims, including class action litigation.

Please contact us if you need assistance with these matters. Bookmark our All About Advertising Law blog and subscribe to our monthly newsletter for more updates.