United States: Lead Generators: What To Do When You Receive A TCPA Subpoena

Last Updated: May 22 2015
Article by David O. Klein

The number of Telephone Consumer Protection Act ("TCPA") class action lawsuits has grown significantly recently, with several thousand cases filed in each of the past several years. Typically, TCPA actions are brought against businesses which contact customers or potential customers via text, telephone or facsimile ("Advertisers"), or against companies that send the text messages, telephone calls or facsimiles on their behalf ("Marketers"). However, lead generators are also frequently involved in TCPA cases. Often lead generators are brought into TCPA cases through the contractual indemnity claim process. Much more often, however, lead generators are served with subpoenas for documents and/or testimony (where they are not named defendants), particularly regarding the issue of whether and how express written consent was obtained from the subject plaintiff. The manner in which the lead generator initially responds to a TCPA subpoena can make a huge difference in determining how time consuming and costly its participation in the applicable action will be and, more significantly, whether it will be added as a party to the lawsuit.

What is the TCPA?

The TCPA was enacted in 1991 and, with some exceptions, allows individuals to file lawsuits (including class actions) to collect damages based upon receipt of certain (SMS) text messages, telemarketing calls, faxes, pre-recorded telephone calls and/or autodialed telephone calls.

The TCPA allows for actual damages, or statutory damages ranging from $500.00 to $1,500.00, per unsolicited call/text message or facsimile transmission. In light of the exacting standards and exceedingly high statutory penalties, the TCPA continues to be one of the most active areas of class action litigation in the country. The October 16, 2013 amendments, together with the overly-expansive interpretation of the TCPA given to it by the Federal Communications Commission ("FCC") and some courts, has further motivated TCPA class action plaintiffs.

What Should Lead Generators do Upon Receipt of a TCPA Subpoena?

First, lead generators should be working on TCPA compliance with experienced TCPA counsel long before they ever receive a TCPA subpoena. TCPA lawsuits are preventable and so are many of the mistakes that companies make in responding to TCPA subpoenas that ultimately result in the subject companies being added as defendants in TCPA actions. The TCPA has some bright line rules that must be followed in obtaining express written consent, however many provisions are more nuanced. Lead generators cannot comply with the TCPA by simply applying common sense, a cursory review of the statute itself, or copying what their peers are doing. TCPA compliance requires knowledge of the statute itself, constantly developing caselaw on the topic, as well as FCC interpretations thereof. Mere technical non-compliance with the TCPA alone has resulted in multi-million dollar judgments against, and settlements by, many companies. Ultimately, the penalty for paying for the defense of class action litigation, and the associated monetary penalty, may be passed down the lead generation chain.

Second, lead generators should be working with counsel to get ironclad contracts in place long before they receive a TCPA subpoena. This includes not only the lead generator that originally obtained the lead but also affiliate networks, lead brokers and any other entity along the lead generation path. The contracts with both the entity from which lead generators obtain the lead, as well as the company(ies) to which they provide the lead must expressly mandate that it/they are fully TCPA compliant. In addition, the contracts with the entity from which leads are obtained must have a clear and enforceable indemnity agreement protecting the lead buyer in case a TCPA action does go wrong and the advertiser, marketer, affiliate network, etc. is looking for indemnity. Upstream indemnity contracts must also be reviewed for reasonableness and to provide lead generators with maximum protection.

Third, when lead generators actually receive a TCPA subpoena, they should not speak to anyone other than their attorneys.  Most importantly, the party that sent the subpoena should not be called. Business practices that the lead generator believes to be proper, and that many of lead generator peers engage in, may in fact be the basis of the plaintiff's claim. Discussing the lead generator's business practices with its adversary may simply confirm plaintiff's case and serve as a clear admission of wrongdoing.

Fourth, lead generators should not speak with employees, marketing partners, advertisers or other industry contacts until after they have spoken with their attorneys. Information discussed or shared with any of the above may be discoverable by plaintiff and may ultimately complicate their subpoena response, make the response more time consuming and expensive, and potentially result in the lead generator being added as a defendant to the subject action. In fact, some of the above individuals and/or entities may have previously agreed to work with plaintiff to avoid being named as a party to the lawsuit.

Fifth, documents should not be created/destroyed.   Document tampering or spoliation will generally be uncovered during the discovery portion of the action. Such activities may create a basis for very costly sanctions against the lead generator and needlessly complicate matters.

Sixth, lead generators should discuss strategy and defenses with their attorneys.   Is the subpoena even valid? Was it issued through the proper court, served properly, or does it request an appearance outside the relevant territorial limit?  Is it overbroad in scope, does it request documents outside the lead generator's control or other objectionable matters?

Finally, lead generators should look hard at their contracts. Discuss with counsel what indemnity rights there are and how business relationships may be affected. If the lead generator has obtained good, TCPA compliant express written consent, the parties may want to fast track that information to plaintiff without the need to raise and litigate indemnity claims. Conversely, if the case proceeds, each party may wish to look downstream to the party that provided it with the lead to cover its legal costs.

If you are a lead generator and not currently working with experienced telemarketing and Internet marketing counsel versed in the intricacies and nuances of the TCPA, you are almost certainly at risk. Moreover, in-house (as well as corporate) counsel should honestly assess how familiar they are with the TCPA and whether consulting with counsel experienced in TCPA compliance best serves and protects their interests. Proper compliance is the only sure fire way to succeed in a TCPA lawsuit.

This topic should be of interest to any company or individual engaging in online lead generation and telemarketing.

If you are interested in ensuring that you are compliant with current TCPA regulations, or if you are facing TCPA class action litigation or other regulatory complaint, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.


Related Blog Posts:

How to Defend a TCPA Lawsuit

Help! I Was Named Personally in a TCPA Lawsuit

Protect Yourself Against Personal Liability Under the TCPA

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
David O. Klein
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.