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In a big win for Yahoo!, the U.S. District Court for the Southern District of California denied certification of a putative class in a suit alleging that Yahoo! violated the Telephone Consumer Protection Act (“TCPA”).  The litigation arose out of claims that Yahoo! spam-texted consumers by allowing its users to send text messages from a computer to a mobile phone.  In order to send a text message via Yahoo! Messenger, the user must either select the recipient’s name from the user’s Yahoo! contact list or manually input the recipient’s mobile number in the Messenger window.  Yahoo!, then, automatically checks to see if anyone has used its Messenger service to send a message to that mobile number.  If not, Yahoo! sends a “Welcome Message” to the recipient providing a general explanation of the feature.  Yahoo! users agree to the terms of service, and over the years some of these terms of service have included consent for Yahoo! to send text messages.  The plaintiffs claimed that the “Welcome Message” violates the TCPA prohibition on sending automated text messages through an “automatic telephone dialing system” without the recipient’s consent.
Continue Reading Yahoo! Says Yahoo! In Defeating Class Certification in TCPA Texting Case

On August 19, 2015, in Luna v. SHAC, LLC, No. 5:14-cv-00607 (N.D. Cal.), the Northern District of California issued one of the first decisions interpreting the Telephone Consumer Protection Act’s (“TCPA”) definition of “automatic telephone dialing system” (i.e., autodialer) following the FCC’s July 2015 omnibus TCPA order.  Luna may serve as guidepost for future litigants, as the key to the court’s decision lies in the degree of human involvement in the call making process.

In Luna, the defendant-gentleman’s club engaged a third-party mobile marketing company to provide a web-based platform for sending promotional text messages to its customers.  The process to send the text messages through the web-based platform involved multiple steps, all of which required human involvement.  First, an employee would input telephone numbers into the platform manually, or by uploading or cutting and pasting an existing list of phone numbers.  Next, the employee would log in to the platform to draft the message content.  The employee, then, would designate specific phone numbers to which the message would be sent.  Finally, the employee would click “send” on the website to transmit the message to the defendant’s customers.  The messages could be transmitted in real time or as prescheduled messages sent at a future date. 
Continue Reading Court Holds That Human Intervention Covers Strip Club From Liability in TCPA Autodialer Class Action

While plaintiffs’ attorneys seek to streamline the filing of class actions under the Telephone Consumer Protection Act (“TCPA”), a recent court decision serves as a reminder that there are clear limits to a plaintiffs’ ability to recover statutory damages under a theory of vicarious liability. On May 18, 2015, the U.S. District Court for the Central District of California awarded summary judgment to defendant UTC Fire & Security Americas Corporation, Inc. (“UTC”), finding the security equipment manufacturer could not be held vicariously liable for the actions of its authorized dealers under any theory of agency. The decision marks a win for companies that operate using a dealer or retailer network to distribute their products, in a legal area that is a noted favorite of class action lawyers, and provides an example for how companies may avoid vicarious liability under the TCPA by carefully structuring the way in which they authorize resellers to use and advertise their product.
Continue Reading Security Equipment Manufacturer Secure in Its TCPA Defense: Court Finds Company Not Vicariously Liable for Authorized Dealer’s Alleged TCPA Violations

The Supreme Court will decide whether a defendant can “pick off” the named plaintiff in a Telephone Consumer Protection Act (TCPA) class action – and moot the putative class claims – by making a Rule 68 offer of judgment before the putative class representative files a motion for class certification.  Thus, the Supreme Court could streamline putative class actions by eliminating the need for plaintiffs to file “protective” motions for class certification at the same time they file their complaints.  The case, Gomez v. Campbell-Ewald Co., also involves important vicarious liability issues that litigants routinely address in TCPA class actions.

In Gomez v. Campbell-Ewald Co., the defendant marketing consultant allegedly arranged to send the plaintiff unsolicited text messages in violation of the TCPA through a third-party caller called Mindmatics, purporting to recruit for the U.S. Navy.  Before the plaintiff filed a motion for class certification, Campbell-Ewald offered to pay the plaintiff $1,503.00 per violation, in full satisfaction of the plaintiff’s claims.  The plaintiff allowed the offer to lapse and sought class certification.  Campbell-Ewald argued to the United States District Court for the Central District of California and then to the Ninth Circuit that its Rule 68 offer of judgment mooted the plaintiff’s individual and putative class claims.  The Ninth Circuit disagreed with the defendant, aligning the decision with other circuits which have also held that a rejected Rule 68 offer does not moot claims if the offer is made prior to filing or, or ruling on, a motion for class certification.   The Seventh Circuit, in contrast, held in Damasco v. Clearwire Corp. that a Rule 68 offer made before the plaintiff had filed a motion for class certification mooted the class claims. 
Continue Reading TCPA “Pick Off” Play – Supreme Court to Consider whether a Settlement Offer to Named Plaintiff Moots Class Action

New Jersey traditionally has had the most onerous state Do Not Call law, which prohibited all telemarketing sales calls to cell phones.  The law did not even allow such calls to be made with the consumer’s consent.  With 90% of Americans owning cell phones and 58.8% of households being either entirely or predominantly wireless today, that was particularly bad news for telemarketers.

However, on January 29, 2015, New Jersey Governor Chris Christie signed into law state Senate bill 1382, which significantly loosens the state’s restrictions on telemarketing to cell phones.  The bill clarifies the state’s Do Not Call law to prohibit only unsolicited telemarketing sales calls from being made to cell phones.  The amended law – which took in effect immediately upon Governor Christie’s signing – defines “unsolicited telemarketing sales call” as any telemarketing sales call other than a call made (1) in response to the express written request of the consumer called or (2) to an existing customer.  The New Jersey Senate Commerce Committee clarified that the latter carve-out from the state Do Not Call law permits the placement of collection calls and calls to follow up on customer’s contractual obligations “unless the customer has stated to the telemarketer that the customer no longer desires to receive the telemarketing sales calls of the telemarketer.”Continue Reading “Glory Days”: New Jersey Allows Certain Telemarketing Calls to Cell Phones

It seems as if every few weeks, a new court decision weighs in on how to interpret the Telephone Consumer Protection Act (“TCPA”), especially the meaning of “automatic telephone dialing system” (“autodialer”) and “called party.”  Trade associations and telemarketers have petitioned the Federal Communications Commission (“FCC”) for clarification, hoping to reduce the compliance burden and prevent lawsuits from aggressive plaintiff’s attorneys (See TCPA Update for recent filings).  Now, fourteen United States Senators have provided their two cents, not on the specific meaning of any definitions, but rather the general direction the FCC should take when clarifying the rules. The Senators’ clear message:  Don’t weaken the TCPA’s protections for consumers.

On January 28th, fourteen Senators signed a letter to Chairman Wheeler at the FCC expressing “deep concerns” that the proposed changes being considered by the FCC would “undermine the intent and spirit of the TCPA.”  The letter discussed the purpose of the TCPA, indicating that it was passed by Congress to protect consumers from intrusions into the home by telemarketers.  Emphasizing the importance of broader protection for consumers, the letter explained that “by banning autodialing and pre-recorded calls to land lines and mobile phones, with certain exceptions, and establishing the National Do Not Call Registry, the law created a zone of privacy that remains hugely popular with consumers to this day.”  In closing, the letter reiterated: 
Continue Reading Some Senators Make an Unsolicited Call to the FCC

Telemarketers are all too aware that automatic telephone dialing systems (“autodialers”) are a hot topic in the litigation world. The Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, and the Federal Communications Commission’s (“FCC”) implementing rules, 47 C.F.R. § 64.1200, prohibit making any autodialed call or text message to cell phones without the called party’s prior express consent (with express written consent required for marketing calls). However, as we have noted previously, no one seems to know the full extent of devices that are properly classified as autodialers under the TCPA. As a result, parties have been fighting over the proper meaning of autodialer in the courts, and numerous petitions have been submitted to the FCC requesting clarification. As our TCPA Alert highlights, the lawsuits continue to pour in, while the FCC prepares clarifications and guidance that could remove some of the uncertainty.
Continue Reading TCPA Autodialers 101: What Makes an Autodialer and What’s Next from the FCC

Not to be outdone by last year’s changes to Federal Communication Commission rules under the Telephone Consumer Protection Act (“TCPA”), the Federal Trade Commission (“FTC”) has teed up a number of issues that may be the focal point of big changes to the Telemarketing Sales Rule (“TSR”).  Similar to the TCPA rules, the TSR includes the FTC’s version of Do-Not-Call rules and restrictions on the use of prerecorded message calls.  Unlike the TCPA rules, the TSR imposes certain disclosure and other requirements for outbound calls, some inbound calls, and upsells on both outbound and inbound calls.  When the FTC announced on July 31, 2014, that the TSR has come due for review, it asked for public comment on issues that suggest the FTC is considering restrictions on telephone “data pass” and broader application of negative option and other disclosure requirements to inbound calls currently exempt from the scope of the TSR.  While the ongoing stream of lawsuits filed under the TCPA continues, it is worth taking a closer look at the FTC’s Rule Review, Request for Public Comments (“Request”) to determine what additional restrictions/requirements could be on the horizon for telemarketers. 
Continue Reading TSR Under Review: What Telemarketers Should Know about FTC’s Request for Public Comments

With the FCC’s recent record fine of $7.5 million against Sprint Corp. for alleged Do-Not-Call violations, the more restrictive prior express written consent rule for marketing calls made to cell phones by an autodialer, and the continuous filing of class action complaints (See TCPA Update for recent filings), it is easy to understand why companies are wary of liability under the Telephone Consumer Protection Act (“TCPA”).  As we’ve discussed previously, general uncertainty around how to interpret certain provisions of the TCPA has resulted in numerous petitions being filed with the FCC.

Although many areas still require clarification, the law around vicarious liability under the TCPA continues to develop.  Most recently, on July 2, 2014, the Ninth Circuit weighed in on Thomas v. Taco Bell Corp. in an unpublished decision that addresses vicarious liability under the TCPA. Let’s take a closer look.Continue Reading No Agency, No Claim: Taco Bell and the TCPA’s Vicarious Liability Standard

Over the past couple of months, we have been waving the caution flag in the air while attempting to warn businesses about the potential liability for violations under the TCPA.  In our previous posts, we noted the numerous consumer lawsuits that have been filed against businesses throughout the country, a list which continues to grow on a weekly basis (see our TCPA Update for more recent filings).  On May 19, 2014, the Federal Communications Commission (“FCC”) announced a record $7.5 million fine against Sprint Corp. (“Sprint”) in a settlement for violations of the “Do-Not-Call” law, which should send a clear message to telemarketers that class actions are not the only threat to a telemarketer’s bottom line.  Indeed, the FCC’s statement on the settlement explicitly states:

We expect companies to respect the privacy of consumers who have opted out of marketing calls.  When a consumer tells a company to stop calling or texting with promotional pitches, that request must be honored.  Today’s settlement leaves no question that protecting consumer privacy is a top enforcement priority.

First, a brief refresher of the “Do-Not-Call” law’s history and basic statutory framework may be helpful.  Under 15 U.S.C. § 6151, the “Do-Not-Call Registry Act of 2003” went into effect in 2003, establishing a national registry for consumers to opt out of telemarketing calls for free.  The statute formally ratified the FTC’s do-not-call registry provision of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(b)(1)(iii).  The “Do-Not-Call Implementation Act of 2003,” 15 U.S.C. § 6152 et seq. authorized the FCC to issue do-not-call regulations under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq.  As a result, in June 2003, the FCC supplemented its TCPA rules to also include a national Do-Not-Call list.  As a result, businesses must comply with both FCC and FTC regulations when making telemarketing calls.  Note that the FCC Guide on Unwanted Marketing Calls indicates the law applies only to personal landline and wireless phones—not business phones.  The “Do-Not-Call” law also exempts calls made with express prior written consent, calls made by nonprofit organizations, or calls from a person or organization with an established business relationship. 
Continue Reading Caller Beware: FCC’s Record “Do-Not-Call” Fine Highlights Liability Under TCPA