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Mintz Levin Communications Practice
TCPA & Consumer Calling
Monthly TCPA Digest
October 2016
By Joshua Briones, Russell Fox, Alex Hecht, Radhika Bhat, E. Crystal Lopez,
Rachel Sanford Nemeth, Esteban Morales, and Sam Rothbloom
We are pleased to present the latest edition of Monthly TCPA Digest, bringing you insights on TCPA regulatory and legislative updates, class action developments, and trends. If you have suggestions for content you would like us to feature in this newsletter, or if you have any questions about the topics presented in this issue, please feel free to reach out to an attorney on Mintz Levin’s TCPA and Consumer Calling Practice team. You can click here to subscribe.
- The Consumer and Governmental Affairs Bureau issued a Public Notice clarifying that if a telephone number subscriber requests call blocking in order to prevent his or her Caller ID information from being spoofed, a voice service provider may block such calls so they do not reach the recipient consumer – in other words, a provider may block spoofed calls when it is requested by the spoofed number’s subscriber. Consumers are presumptively deemed to have consented to the call blocking when the number’s subscriber has requested it. This clarification is intended to spur development of robocall blocking tools, which Chairman Wheeler has encouraged providers to offer consumers free of charge. The Public Notice states that such tools will require Caller ID authentication and the creation of a “Do-Not-Originate” database of numbers that consumers are likely to trust (e.g., numbers associated with the Internal Revenue Service) but which are frequently spoofed.
- The Consumer and Governmental Affairs Bureau issued an order granting seven Petitions for Retroactive Waiver. The petitions sought the same wavier that the Commission granted to the Coalition of Mobile Engagement Providers and the Dire ct Marketing Association in the 2015 TCPA Order, which allowed them to continue to rely on old nonconforming written consents for the period from October 16, 2013 through 89 days after the 2015 TCPA Order’s release. Waivers were granted to the National Association of Broadcasters, the National Cable & Telecommunications Association, Mammoth Mountain Ski Area, Kale Realty, F-19 Holdings, Rita’s Water Ice, Papa Murphy’s Holdings, Inc., and Papa Murphy’s International.
- The Robocall Strike Force — an industry-led group developing solutions to prevent, detect, and filter unwanted robocalls that was formed in response to a call to action by Chairman Wheeler – released a report containing short and long term deliverables. With regard to short term deliverables, the Strike Force has, among other things: (1) accelerated the standards to verify and authenticate caller identification for calls carried over an Internet Protocol network; (2) developed a plan to educate consumers on the capabilities existing in the market; (3) created a standardized framework for delivering information from the network to the end user device to empower consumers to make informed call decisions; (4) documented and shared best practices regarding identification of robocalls; (5) improved and accelerated robocall traceback via information sharing; (6) initiated a trial to block known numbers that should never originate traffic; (7) established criteria for initiating tracebacks of suspicious traffic; (8) issued guidance on when blocking is acceptable; (9) proposed a safe harbor for cooperating entities; (10) issued guidance about key terminology; and (11) developed recommendations for actions the FCC can take to support industry efforts. Going forward, the Strike Force will also (1) develop an information flow, consumer presentation, and consumer-directed call disposition control options, as well as a framework for deploying resulting solutions; (2) drive adoption of standardized framework for delivering information from the network to a device to empower consumers to make informed call decisions; and (3) recruit companies to the Industry Traceback Group supported by USTelecom and enhance industry best practices for traceback. Chairman Wheeler issued a brief analysis of the report, stressing that industry should (1) grant consumers access to free call blocking and filtering solutions now; (2) set deadlines for the deployment of the frameworks and solutions discussed in the report; and (3) expand the trial on blocking known numbers that should never originate traffic.
- Three parties filed reply comments in response to the Anthem, et al. Petition for Expedited Declaratory Ruling and/or Clarification of the TCPA and the 2015 TCPA Order which asks that the Commission clarify (1) that the provision of a phone number to a HIPAA “covered entity” or “business associate” constitutes prior express consent for non-telemarketing calls allowed under HIPAA for the purposes of treatment, payment, or health care operations; and (2) that the health care exemption in the 2015 TCPA Order applies to all HIPAA “covered entities” and “business associates.”
- Eli Lilly and Company (“Lilly”) filed reply comments in support of the Anthem Petition. Lilly asked that the Commission also extend the proposed relief to pharmaceutical manufacturers making calls as part of a patient support program, noting that for many of its operations Lilly, like other similarly-situated manufacturers, may not be a covered entity or business associate under HIPAA. Lilly argues that pharmaceutical manufacturers’ patient support programs facilitate communications comparable to the health care messages discussed by Anthem because such messages relate to treatment, case management, and care coordination.
- Anthem, et al. also filed reply comments, noting that the vast majority of comments filed were in support of the petition and contending that the record demonstrates that health care related texts and automated calls to mobile phones lead to more engaged patients, better patient outcomes, and lower health care costs for consumers. Moreover, (1) the record does not contain any evidence that consumers will be harmed by Anthem’s proposal; (2) the 2015 TCPA Order has caused HIPAA covered entities and business associates to curtail outreach programs for fear of litigation; and (3) as is, the 2015 TCPA Order could be read to be inconsistent with the FCC’s prior TCPA decisions and the intentions of Congress regarding privacy and HIPAA.
- Robert Biggerstaff filed reply comments urging the Commission to deny the Anthem Petition unless it also requires that (1) the entity collecting the consumer’s phone number expressly provide a clear and conspicuous mechanism at the point of collection that allows the consumer to limit use of his or her phone number; and (2) any restrictions the consumer places on use of that phone number also be respected by any other entity that acquires the phone number from the original entity.
- The National Consumer Law Center, Consumer Action, Consumer Federation of America, EPIC, National Association of Consumer Advocates, Public Citizen, and Public Knowledge (collectively, the “Public Interest Groups”) late-filed comments on the Anthem Petition. The Public Interest Groups do not oppose the Anthem Petition per se, however, they ask that the Commission include additional language to make clear that (1) telemarketing calls are not covered by the requested clarification, whether or not these calls are subject to HIPAA; and (2) the scope of the consent provided by the consumer is still limited by either the express instructions provided by the consumer or, if none are provided, the subject of the transaction for which the consumer provided the telephone number. With regard to the latter, the Public Interest Groups note that whether HIPAA covers the calls and the relationship between the parties is irrelevant to the question of whether consent has been provided for the calls to be made, as the primary determining factor is whether the consumer has consented to the content of the calls. Consumers Union separately late-filed comments in support of the above clarifications and suggested a few additional wording adjustments to ensure that the Anthem Petition’s requested changes do not capture non-HIPAA entities, interactions, or purposes.
- WellCare Health Plans, Inc. (“WellCare”) met with staff from the Consumer and Governmental Affairs Bureau to urge the FCC to grant the Anthem Petition, of which WellCare is one of the petitioners.
- Reply comments were filed regarding the Professional Services Council’s (“PSC”) Petition for Reconsideration of the Broadnet Declaratory Ruling, which seeks a modification of that portion of the ruling necessary to provide TCPA relief to government contractors acting on behalf of the federal government, in accordance with their contract’s terms and the government’s directives, without regard to whether a common-law agency relationship exists.
- PSC filed reply comments in support of its petition, arguing that (1) common law agency was not an essential ingredient in the FCC’s determination that government contractors are not persons under the TCPA; (2) the Supreme Court’s decision in Yearsley v. W.A. Ross Cost. Co. makes clear that derivative sovereign immunity exists; (3) Campbell-Ewald Co. v. Gomez did not hold that a government contractor may not enjoy immunity for TCPA violations; rather, the respondent’s inability to secure immunity was predicated on its failure to follow the government’s “explicit instructions”; and (4) granting PSC’s request is in the public interest because it would facilitate government use of government contractors’ services when the government chooses.
- Robert Biggerstaff filed reply comments in opposition to the PSC Petition, arguing that (1) the threat of government contractors violating the TCPA is real; (2) the Broadnet Declaratory Ruling leaves consumers with no remedy for bad behavior; (3) Congress intended the TCPA to apply to federal government contractors, as is made clear by the specific exemption added to the TCPA for federal contractors collecting government debt; (4) the Commission should instead grant an exemption to federal contractors under 47 U.S.C. § 227(b)(2)(C), which allows exemptions for free to end user calls; and (5) Yearsley established a narrow rule regarding claims arising out of property damage caused by public works projects, and is inapplicable here. Craig Cunningham filed supplemental comments to respond to PSC’s statements regarding Cunningham’s status as a frequent TCPA litigant.
- Aytan Y. Bellin, attorney for Craig Cunningham, filed an ex parte regarding the PSC Petition. Bellin argued that (1) the Commission erred when it relied on the “extra-textual ‘legal and factual context of this proceeding’” to exclude federal contractors from the term “person” in 47 U.S.C. § 227(b)(1); and (2) the Commission’s justifications for reading federal contractors out of the definition of the “person” do not hold up because federal contractors are already protected from lawsuits if the government contract specifically requires them to violate the TCPA and because the government itself is immune from suit due to sovereign immunity.
- Mortgage Bankers Association (“MBA”), Quicken Loans, and PNC Bank (collectively, the “Mortgage Interests”) representatives met with Consumer and Governmental Affairs Bureau staff and with advisors to Chairman Wheeler regarding the MBA Petition for Exemption, which requests that the Commission exempt autodialed and prerecorded residential mortgage servicing calls to wireless numbers, when the calls are not charged to the called party and do not contain an advertisement or constitute telemarketing. The Mortgage Interests argued that (1) mortgage servicing calls help consumers; (2) the communications that MBA seeks to exempt are not “robocalls” as that term is commonly understood; and (3) the proposed exemption would not leave mortgage servicing calls unregulated, given other existing statutes and regulations and the limitations MBA itself has proposed for the exemption.
- Representatives from Quicken Loans and Rock Connections, part of the Quicken Loans family of companies, met with Consumer and Governmental Affairs Bureau staff to express support for MBA’s petition. Quicken Loans noted that it is an Internet-based company and that its business model relies heavily on the ability to transact business by telephone. It argued that granting the exemption would allow mortgage servicers to more effectively help clients stay in their homes and keep their credit intact.
- ADT representatives met with an advisor to Chairman Wheeler. ADT stated that it is working with industry, public interest groups, and congressional staff on a legislative proposal that would offer incentives to spur greater business use of compliance programs and would clarify TCPA vicarious liability provisions. ADT noted that this legislative proposal served as the basis for the language in an amendment to the FCC Reauthorization Act of 2016 filed by Senator Daines.
- Neustar, Mozilla, and Cisco representatives met with staff from the Office of Strategic Planning and the Public Safety and Homeland Security Bureau regarding methods and standards for phone call authentication. Neustar representatives also separately met with Consumer and Governmental Affairs Bureau staff to discuss technologies to combat unlawful robocalling and caller ID spoofing.
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Legislative activity in Congress will heat up after Election Day when members return to Washington for a “lame-duck” session. On their agenda may be matters related to the Telephone Consumer Protection Act (TCPA). Twenty-five years after its passage, the landmark law remains extremely popular across the country. Yet, due to legal developments and technological advances that have occurred over the last quarter century, members on both sides of the aisle have expressed interest in revising the TCPA. The outcome of the election may affect the scope and direction of some possible changes. However, what is clear to both parties is that the proposals with the best odds of becoming law are those that strike the balance between enhancing the TCPA’s consumer protections and reducing its ambiguity for the business community.
Congress may consider some of these proposals in the upcoming lame-duck session. If it does, it will be following a recent precedent: Late last year, Congress passed an exemption to the TCPA for federal debt collectors as part of an end-of-the-year appropriations measure. The end of this year could see even more changes to the law. In last month’s update, we mentioned the two bills that are mostly likely to come up for a vote in the lame-duck session: the Spoofing Prevention Act (S. 2558) – or the Anti-Spoofing Act of 2016 (H.R. 2669), as it is known in the House – and the Repeated Objectionable Bothering of Consumers on Phone (ROBOCOP) Act (S. 3026 and H.R. 4932). Of note, late last month, the House passed by voice vote the Anti-Spoofing Act as a part of an eight-bill package, titled the Communications Act Update Act of 2016 (S. 253), which is now pending in the Senate. These bills’ prospects in the lame-duck session are tied to the fate of FCC Commissioner Jessica Rosenworcel, whose renomination has been in limbo this past year. Should lawmakers not consider changes to the TCPA in the lame-duck, they likely will in the 115th Congress. Then, they will have the opportunity to vote on bills, for which members are still building support, such as Senator Steve Daines’ amendment (which we summarized in detail last month).
Between now and the start of the next Congress, some of the biggest news affecting the TCPA will probably relate to congressional committee leadership elections. Assuming that Republicans continue to hold the House, Representatives John Shimkus of Illinois and Greg Walden of Oregon are expected to be the two frontrunners for the chairmanship of the House Energy and Commerce (E&C) Committee. Both members have expressed interest in revisiting the TCPA, as have Representatives Marsha Blackburn (R-TN) and Bob Latta (R-OH), the two presumed frontrunners to succeed Walden as the Subcommittee Chairman. In the Senate, Senators John Thune (R-SD) and Roger Wicker (R-MS) most likely will stay as their party’s leaders on both the Senate Commerce Committee and the Subcommittee on Communications, Technology, Innovations, and the Internet, respectively, with Senators Bill Nelson (D-FL) and Brian Schatz (D-HI) remaining the top members on the Democratic side. Regardless of which party is in control, we expect consideration of the TCPA and, as noted earlier, those proposals with bipartisan support will have the best chance of becoming law.
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In what appears to be the first of its kind in California, earlier this month the U.S. District Court for the Northern District of California dismissed a TCPA class action premised on the receipt of a fax transmission on the basis that the named plaintiff lacked Article III standing. Supply Pro Sorbents v. RingCentral, Inc., No. 16-02113, 2016 U.S. Dist. LEXIS 140033 (Oct. 7, 2016).
The plaintiff filed its TCPA claim after receiving a fax with a cover sheet including an identifier with defendant RingCentral, Inc.’s logo and a line of text that stated, “Send and receive faxes with RingCentral, www.ringcentral.com.” The defendant in the case, RingCentral, Inc., provides cloud-based business communications services and specifically allows users access to technology by which to send and receive faxes and provides form fax cover sheets that users can select when sending faxes. Though RingCentral did not prepare the body of the fax at issue, plaintiff contended that RingCentral nonetheless violated the TCPA because it was identified on the fax cover sheet.
Pointing to Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the Northern District of California held that plaintiff failed to allege having actually suffered an injury-in-fact that is concrete. Though a recipient of a fax may lose time, toner, and paper, and have its telephone line tied up, plaintiff failed to explain “how … it specifically suffered these particular harms from the single line identifier on the optional cover sheet of a solicited four-page fax it received.” The Court granted plaintiff leave to amend but was skeptical of the success of further amendment as it “is not clear how Plaintiff could identify sufficient injury-in-fact to rise to the level of constitutional standing.”
The decision is part of a growing body of California case law in which courts have dismissed TCPA claims based on the pleadings at various stages of litigation. See Romero v. Dep’t Stores Nat’l Bank, No. 15-CV-193, 2016 U.S. Dist. LEXIS 110889 (S.D. Cal. Aug. 5, 2016) (dismissing with prejudice TCPA case premised on the receipt of over 290 telephone calls); Smith v. Aitima Medical Equipment, Inc., No. CV 16-00339, 2016 U.S. Dist. LEXIS 113671 (C.D. Cal. July 29, 2016) (dismissing with prejudice TCPA claim premised on receipt of a telephone call); Ewing v. SQM US Inc., No. 16-1609, (S.D. Cal. Sept. 29, 2016) (same).
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In an economy where timely and effective communication with both current and prospective customers is vital to the success of nearly every business, modern technology, such as autodialers, recorded and artificial voice messages, text messaging, and e-mail provide companies the ability to reach large numbers of people with increasingly smaller up-front costs. But, companies cannot afford to overlook the hidden costs of using these mass communication methods if the many regulations that govern their use are not carefully followed.
Companies have been hit with class action lawsuits under the Telephone Consumer Protection Act (TCPA) for tens or even hundreds of millions of dollars. Mintz Levin's multidisciplinary team work tirelessly to help our clients understand the ever-changing legal landscape and to develop workable and successful solutions. TCPA rules can apply to certain non-sales calls, such as a recorded call to employees about a new work schedule or a text to customers about a new billing system. We advise on how to set up calling campaigns that meet state and federal requirements as well as how the Federal Communications Commission and the Federal Trade Commission apply their rules on calling, faxing, and texting. Given the uncertainties surrounding the TCPA as a result of the FCC's extensive and confusing rulings, we work with clients across many industries, health care, retail, communications and financial services, on matters relating to the following issues:
Compliance: Our TCPA team routinely advises companies on compliance with federal and state sales and marketing requirements. We also know what type of consumer consent is needed for each type of call and how specific consents must be worded. We know when and how to apply a do-not-call list and when and how an opt-out provision must be afforded.
Consumer class action defense: We've been called upon to handle TCPA class actions across all industries and in federal courts across the nation. Our seasoned litigators know the serial plaintiffs and counsel well and are unfazed by their schemes. Fortunately for our clients, our team has succeeded in winning at the motion stage or earlier in the vast majority of TCPA matters we have defended. That is what truly sets us apart. And if a case must go to trial, we have the experience and strength to follow it to the end.
Insurance coverage disputes: We know the arguments insurers use to deny coverage in TCPA suits because we've defended against them. More important, we have a long track record of convincing carriers to fund the defense of these actions and, in some cases, to pay significant portions of settlements. Our goal is to help secure insurance protection and to see to it that carriers make good on their coverage obligations when a claim arises.
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Related Practices
Related Industries
Joshua Briones, Member
Russell Fox, Member
Alexander Hecht, ML Strategies - Vice President of Government Relations
Radhika Bhat, Associate
E. Crystal Lopez, Associate
Rachel Sanford Nemeth,
ML Strategies - Director of Government Relations
Esteban Morales, Associate
Sam Rothbloom, Project Analyst
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