United States: TCPA: The Muddled Madness Continues!

Last Updated: October 24 2014
Article by Judith L. Harris

Tuesday evening, the Federal Communication Bar Association held a seminar in Washington designed to help practitioners make some sense of the ever-expanding number of class actions that have been brought under the Telephone Consumer Protection Act ("TCPA") by often over-zealous plaintiffs' attorneys; the inconsistent decisions that have been rendered by the courts; and the scores of requests for declaratory rulings that are currently pending before the Federal Communications Commission ("FCC," "Agency," or "Commission"). While the participants on the seminar's two panels (the first designed as a litigation update and the second intended to provide a look down the road) quibbled over substance throughout the evening, they did seem to share one common perspective: the TCPA is a mess!

Not surprisingly, the panelists – especially the FCC's representative – were much more adept at identifying open issues than at providing answers. Nonetheless, we were able to gain some insight into what are generally considered to be the most difficult TCPA-related issues and how some of the current confusion might eventually sort itself out.

  • There seems to be universal agreement that the FCC will issue an order "any day now" dealing with opt-out requirements in situations involving solicited faxes. We got the sense that an order is already signed by at least the necessary three Commissioners, and that the Agency will cut a little bit of slack in limited circumstances, to telemarketers responding to consumer requests or sending faxes to existing customers who have consented to receiving them. We'll see.
  • It also seems that Commission staff is currently grappling with the definition of "called party" in the case of reassigned mobile phone numbers. The courts have recently reached differing conclusions regarding that definition for purposes of ascertaining consent, some holding that the called party is the intended recipient of the call and others concluding that it's the current subscriber. We're guessing that this will be the subject of the next important TCPA order issued by the FCC.
  • The good money is betting that the other big questions (in particular, the many pending requests for declaratory rulings relating to the definition of an ATDS, the capacity debate, etc.) will be wrapped into the omnibus rulemaking currently pending before the Agency. It appears that the Commission would be very interested in arriving at a compromise position that could be embraced by both businesses and consumers. Panelist Jason Goldman, Counsel at the U.S. Chamber of Commerce, offered that the Chamber is very focused on trying to proactively develop solutions to some of these issues as, not surprisingly, this whole area of the law is of grave concern to the Chamber's members.
  • Interestingly, in the first panel, two different answers were given by private practitioners to the question of how many petitions for declaratory rulings are currently pending before the FCC (41 and 52). During the second panel, which included Kristi Lemoine – an attorney with the FCC's Office of Consumer and Governmental Affairs who described herself as spending more than 90 percent of her time on TCPA issues – Kristi confessed that she herself doesn't know which of those two numbers was accurate, as petitions keep coming on a regular basis, and even she is having a hard time keeping track of them. As expected, Kristi gave the usual caveats before she spoke: (1) that she was only speaking for herself and not on behalf of the Commission; and (2) that she wasn't going to have a lot to say because virtually all the issues that the audience might be interested in were currently the subject of pending petitions for declaratory rulings, which she was not at liberty to discuss. Then she proceeded to say almost nothing and made no predictions. She did advise that the FCC was attempting to group the petitions by issue, but even just doing that was tough because of the frequency with which petitions were being filed, and the fact that many posed more than a single issue.
  • There seemed to be some consensus that, currently, one of the most interesting open questions relates to the scope of third-party liability for mobile marketing TCPA violations. Several panelists referred to the recent decision of the Ninth Circuit holding that companies that hire third parties to send unsolicited text messages on behalf of yet another entity can be held liable for TCPA violations. See, Gomez v. Campbell-Ewald Co., __F. 3d___, 2014 WL4654479. The Gomez case reversed and remanded an order granting summary judgment in favor of defendants, holding that a marketing company, hired by the U.S. Navy to run a recruitment campaign, could be held liable for violations by a third party with which the marketing company had subcontracted to send text messages in furtherance of the Navy's recruitment campaign. While the FCC has previously opined that third-party liability should be based on common law principles of agency (actual/apparent authority/ratification), everyone agreed that this Ninth Circuit decision, holding, as it did, that a middle man that hired a vendor on behalf of an entity that contracted with the middle man to have calls made or messages sent, could be held liable for acts of the vendor with which the middleman contracted, is really pushing the envelope; and may or may not end up accurately reflecting the law.
  • Finally, there were several references during the seminar to the Federal Trade Commission's ("FTC") announcement in August of the winners of its "Zapping Rachel" robocall contest as evidence that the relevant federal enforcement agencies remain laser-focused. According to the description on the FTC's website: "Zapping Rachel marks the latest step in the FTC's ongoing campaign to combat illegal, pre-recorded telemarketing calls known as robocalls. The contest challenged participants to design a robocall honeypot which is an information system designed to attract robocallers and help law enforcement authorities, researchers, and others gain enhanced insights into robocallers' tactics." Beware! The award winners came up with some pretty innovative ideas!

In other news, the FCC also released an Enforcement Alert. The Alert contains a warning (in this election season) that the TCPA's prohibitions about auto-dialed calls and pre-recorded messages also apply to political calls, and that the Commission intends to enforce the law and its regulations in this regard. For you beleaguered defendants out there: turnaround is fair play!

This article is presented for informational purposes only and is not intended to constitute legal advice.

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