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 Topics
 
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions