United States: TCPA Class Action Lawsuit Defense: A Primer

Last Updated: June 27 2014
Article by David O. Klein

The number of Telephone Consumer Protection Act ("TCPA") class action lawsuits has exploded in the past few years.  The October 16, 2013, regulation amendments and the liberal interpretation of the TCPA by courts and the Federal Communications Commission ("FCC"), has further emboldened TCPA class action plaintiffs.

What is the TCPA?

The TCPA was enacted in 1991 and, with some notable exceptions, allows individuals to file lawsuits (including class action lawsuits) to collect damages for having received unsolicited text messages, faxes, pre-recorded telephone calls and autodialed telephone calls (to cell phones).  The TCPA allows for actual damages, or statutory damages ranging from $500.00 to $1,500.00, per unsolicited call/text message.  Not surprisingly, the TCPA (particularly its applicability to text message marketing) has become fertile ground for class action litigation.  Notwithstanding this trend, experienced counsel can help you identify a wide range of potential defenses to such actions.  Remember, before there can be a TCPA class action, there must be a viable underlying TCPA claim.

Defenses to a TCPA Class Action Lawsuit

As noted in previous blogs, upon receipt of a TCPA lawsuit, your first call should be to an attorney, preferably one thoroughly familiar with the TCPA, as well as telemarketing law in general.  After discussing your contracts, business model, your place in the marketing chain and all known potholes and landmines, many defenses to the underlying TCPA claim may become readily apparent.   For example, did you have prior express written consent to engage in the telemarketing at issue?  Does the plaintiff have jurisdiction over you and/or your business?   Was your relationship with the marketing campaign attenuated enough to fall outside the scope of TCPA liability?  Had you sold or transferred assets of the business prior to the campaign at issue or have you otherwise been named in error?  Often plaintiff's counsel, despite its best efforts, does not have all of the material facts or, more particularly, is not aware of the factual defenses, that may apply to your case.

Defenses to TCPA Class Certification

Even if there appears to be a violation of the TCPA, there are still several hurdles which plaintiff must overcome in order to proceed with the case as a class action, rather than an individual claim.  A stand-alone TCPA claim could settle for as little as $200, whereas many TCPA class actions have settled for, or resulted in judgments of, several millions of dollars.   By way of example, defenses to class certification in a TCPA case include, but are not limited to, the following:

The potential class may not be large enough to justify the use of a class action vehicle.  For example, if the named plaintiff received a test mailing, or an ad hoc call or text which was not part of a full campaign, class certification may be unlikely.

Further, the claims or defense of the representative parties may not be typical of the claims or defenses of the proposed class.  This is an area where plaintiffs frequently run into trouble.  Because lack of consent is an element of a TCPA claim, the issues of whether the potential class members provided consent can be very problematic for plaintiff.  The issues of consent, particularly prior express written consent, might need to be determined on a case by case basis.  As such, proceeding as a class action may be impractical, if not impossible, for plaintiff.

Finally, the representative parties may not fairly and adequately protect the interests of the class.  This is an often overlooked and underutilized provision of Rule 23.  A careful analysis of the potential class plaintiff may reveal a myriad of reasons why he/she will not serve as a proper class representative.   Has the class representative been refunded or tendered other payment to make him/her whole?  Does he/she have a criminal record?  Were there any improprieties in the underlying sign-up process when plaintiff's information was acquired which makes this a questionable representative?  In one case that Klein Moynihan Turco LLP handled, unbeknownst to plaintiff's counsel, the class representative actually died prior to class certification.  Needless to say, we promptly provided a copy of the obituary to plaintiff's counsel and the case was soon dismissed.

Avoid Being Named Altogether

Notwithstanding the above, the best defense remains simply staying off plaintiff's radar screen altogether.  If you are an advertiser or telemarketer, the days of "seat of your pants" TCPA compliance are over.  You must be working on a regular basis with attorneys versed in the intricacies and nuances of the TCPA, telemarketing practices and online marketing to advise you on an ongoing basis.  This will go a long way toward making sure a class action complaint, or regulatory complaint, never gets filed in the first place.

This topic should be of interest to any company or individual engaging in a commercial venture within the United States, especially those involved in text message marketing and telemarketing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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