United States: TCPA Tracker - January 2023

RECENT NEWS

FCC Clarifies Ability of Government Agencies and Their Contractors to Make Medicaid Calls

On January 23rd, the FCC released a Declaratory Ruling and Order confirming that federal and state governmental agencies, and certain third-parties, may, under certain circumstances, make autodialed and prerecorded or artificial voice calls or send autodialed text messages to raise awareness of the eligibility and enrollment requirements for Medicaid and other governmental health programs without violating the TCPA.

While the TCPA prohibits "any person" from making certain calls using an autodialer without prior express consent of the called party, the FCC has previously clarified that federal and state governments making calls in the conduct of official business do not fall within the meaning of "any person," and thus are not subject to the TCPA's prohibitions. However, third-parties and contractors calling on the government's behalf are "persons" that may be subject to the TCPA, and do not enjoy a similar exemption.

In its January 23, 2023 Declaratory Ruling, the FCC first confirmed that if government agencies are themselves "tak[ing] the steps necessary to physically place a telephone call" regarding government health care programs, then they are not "persons" for the purposes of the TCPA and may make calls or send texts using an autodialer even without prior express consent of the called party. However, third-parties and contractors are not afforded the same protections. They are only similarly exempted if the governmental agency is "so involved" in making the call. However, the FCC cautions that when the agency itself is not physically placing the phone call, the decision as to whether the agency is "so involved" that the call is considered to be made by the agency, and not from a "person," is a fact-specific analysis. The FCC therefore, while noting that contractors could avoid TCPA liability when the government agency is "so involved" in making the call, declined to generally opine on the issue and cautioned contractors to not be overly reliant on this method of avoiding TCPA liability.

However, the FCC clarified that third-parties and contractors may make calls that would typically violate the TCPA when the called party provides a telephone number on an application for coverage in Medicaid or other governmental health care programs. Such a provision of a number constitutes "prior express consent" to be contacted at that number regarding enrollment eligibility and other updates pertaining to their applications or coverage. The Order notes that customers who provide their number in such circumstances likely "expect and welcome calls" updating them on their coverage and eligibility. However, the FCC warned that those making calls pursuant to this "consent" should be prepared to demonstrate that they are acting pursuant to the direction and authorization of a governmental agency to make calls or send text messages to enrollees. Additionally, calls or texts constituting advertisements or telemarketing, or calls to numbers that have been reassigned from a Medicaid enrollee to a different person, fall squarely outside of the consent given in these cases.

Finally, the FCC also noted that calls to residential telephone lines that merely raise awareness of eligibility for government programs, rather than advertising them, will not incur TCPA liability. As long as the calls are "raising awareness for the eligibility and enrollment in [government programs]," "do not include or introduce an advertisement or constitute telemarketing," and are purely informational, they are exempt from the prior consent requirement.

You can find the entire text of the FCC's Declaratory Ruling and Order here.

CASES OF NOTE

On January 19th, the Third Circuit affirmed a district court's grant of summary judgment and agreed that a fax notifying a doctor's office of a free educational seminar did not constitute an "unsolicited advertisement" under the TCPA.

Plaintiff Robert Mauthe is a medical doctor with a private practice in Center Valley, Pennsylvania. Defendant Millenium Health LLC operates a laboratory that provides drug testing and medication monitoring services to healthcare professionals. Plaintiff used Defendants' services on occasion to test patients' urine samples, and in doing so, provided the Defendant with his practice's fax number.

On May 2, 2017, Millenium faxed all of its customers a single-page flyer promoting a free educational seminar in opioid misuse and abuse and "the role of medication monitoring as a valuable tool that provides objective, actionable information during the care of injured workers." Though Millenium did offer a type of urine testing that could detect opioids, the fax did not mention that service or its availability. The fax also did not mention any pricing information, discounts, or product images. The seminar did not promote any goods, services, or property for sale, or follow up with registrants or attendees.

The Plaintiff had previously "sued fax senders in more than ten lawsuits since 2015, each seeking damages for violations of theTCPA." Here, Plaintiff filed a putative class action in the Eastern District of Pennsylvania, and the District Court granted summary judgement for Millenium, finding that "the fax did not constitute an unsolicited advertisement" because it "promote[d] a free seminar rather than any commercially available product."

In affirming this decision, the Third Circuit found that the statutory definition of the term 'unsolicited advertisement' does not depend on the "subjective viewpoints of either the fax sender or recipient," but rather an objective standard governing whether a fax meets this requirement for recovery under the TCPA. To support this, the Court cited Mauthe v. Optum, 925 F.3d 129 (3rd Cir. 2019) (discussed here) for the proposition that a fax "does not become an advertisement merely because the sender intended it to enhance its profits." Rather, to be an unsolicited advertisement, a fax must "promote goods or services to be bought or sold and have profit as an aim."

The Court also addressed the Federal Communications Commission's "pretext theory." Under the pretext theory, adopted by other circuits, the Court would "examine not only the fax for a free seminar but also the contents of the free seminar to determine whether the fax 'turn[s] out to be [a] pretext for a later solicitation.'" The Court found that even if the pretext theory were applicable, the free-seminar fax would still not amount to an "unsolicited advertisement" because the seminar contained no advertising or products, services, or property, did not discuss pricing, and did not follow up with attendees about the testing services. In sum, "nothing about the free seminar would lead a reasonable recipient of Millennium Health's fax to believe that it was an advertisement." The Third Circuit therefore affirmed the grant of summary judgment for Defendant Millenium Health.

Robert W Mauthe Maryland PC v. Millennium Health LLC, 2023 U.S. App. LEXIS 1267 (3rd Cir. Jan. 19, 2023)

Court Finds Attempts to Retrieve Data Are Not Actionable Under the TCPA

The Southern District of Texas recently dismissed a TCPA claim brought against GVC Capital, a "real estate lead generator in the business of acquiring consumer data to assist investors and realtors to buy and sell homes, for profit." GVC's website states that the information submitted on the site is "sent to a network which consists of real estate investors, real estate agents, and direct buyers." Plaintiff alleged that GVC Capital sent her multiple "telephone solicitations" offering to buy her home. Plaintiff alleges that she was contacted by GVC Capital without her consent, and that GVC Capital did not respond to Plaintiff's requests that they stop its behavior.

The Court, however, found that GVC Capital's text messages to Plaintiff were not "telephone solicitations" actionable under the TCPA. GVC Capital argued that they called/texted "only offer[ing] to buy something," and not sell something. The Court relied on precedent from the Western District of Michigan in a case involving solicitations by a company that purchased structured settlements. There, the company called the plaintiff offering her the service of selling her settlement rights. The court in that case held that the company was both the "service provider and the purchaser" of the settlement rights and that the calls were thus a "solicitation" under the TCPA.

Here, however, the Court found that GVC Capital was not both the "service provider and the purchaser." In GVC Capital's business model, the consumer does not pay for any of GVC Capital's services, nor does GVC Capital themselves purchase homes. GVC Capital only seeks to acquire data. Although GVC Capital's website is "webuyhomes4cash" and states that "we are looking to buy homes in your area," the Court found that the "we" merely referred to investors, agents, or direct buyers to whom GVC Capital transmits consumer information, and not GVC Capital itself. Consequently, the Court held that Plaintiff's allegations failed to plead an inference that GVC Capital was offering a service or good to the Plaintiff in exchange for payment and therefore failed to plead that GVC Capital's messages were "solicitations" actionable under the TCPA. The Court therefore dismissed the claim.

Pepper v. GVG Cap. LLC, No. CV H-22-2912, 2023 WL 205297 (S.D. Tex. Jan. 17, 2023)

D.C. District Court Bans Serial-Litigant from "Harassing" Defendant with TCPA Lawsuits

The District Court for the District of Columbia granted Defendant Howard University Hospital's motion that Plantiff Na'eem Betz's TCPA claim failed because, among other reasons, the calls were not auto-dialed, and considered enjoining a repeat-TCPA plaintiff from filing any suit in courts in the district.

Plaintiff Na'eem Betz, who has filed twenty lawsuits in the district over the last decade, including three TCPA claims against Howard University Hospital, claimed that three phone calls from the hospital between 2021 and 2022 violated the TCPA. In this case, a pseudonymous patient, known as Patient Doe, provided a phone number that happened to be the Plaintiff's cell phone number to the Defendant. The Defendant called that number on three separate occasions, leaving voicemails regarding "whether the patient has health insurance, and, if not, to see whether [they] could help that patient with Medicare." The Plaintiff did not identify anything about the calls "that suggest[ed] they came from an automatic dialing machine," rather than an individual employee. Accordingly, the Court entered judgment in Defendant's favor on this point.

The Court then considered whether to impose a pre-filing injunction, an "extreme sanction" and "exception to the general rule of free access to the courts." The Court noted that it had the jurisdiction to ban Plaintiff from "filing any suit in courts in this district or in any other federal court." (emphasis in original). To determine the propriety of a pre-filing injunction, courts consider whether the plaintiff has "notice and opportunity to be heard... [and then considers] the volume of a plaintiff's filings and the extent to which they are harassing or frivolous."

Here, the Court found that each of the elements were met. First, Betz had the opportunity to be heard. Next, because he filed 20 lawsuits in the district under the TCPA, including three against this Defendant, the quantity of suits ripened Betz for enjoinment. Third, the Court found that the lawsuits "qualif[ed] as harassing, and certainly so with respect to Howard." The Court also found Betz's claims to be frivolous because they "propound[] substantially the same legal arguments that have not succeeded elsewhere and that lack merit." The Court therefore entered a pre-filing injunction. However, it limited the injunction to only enjoin Betz "from harassing Howard with further TCPA lawsuits."

Betz v. Howard Univ. Hosp., 2023 U.S. Dist. LEXIS 3601 (D.D.C. Jan. 9, 2023)

Alleging Only "Conclusory Harms" Fails Article III Standing in FTSA Claims, According to Southern District of Florida

The Southern District of Florida recently dismissed a complaint alleging Florida Telephone Solicitation Act ("FTSA") and TCPA violations for lack of Article III standing. Plaintiff alleged that he, along with at least a hundred others in Florida, received five unsolicited text messages from Defendant Global Motivation. Plaintiff vaguely alleged that the Defendants used a computer software system that "automatically selected and dialed Plaintiff's . . . telephone number" without his consent and that the messages were to "solicit the sale of consumer goods and/or services."

The Court, following the framework laid out by the Eleventh Circuit in Salcedo v. Hanna ( which we discuss here) found that the Plaintiff failed to allege a concrete injury and thus lacked Article III standing. In addition to his vague factual allegations, Plaintiff failed to plead an injury other than the "inconvenience, invasion of privacy, aggravation, annoyance, and violation of [his] statutory privacy rights." The Court noted that Salcedo "rejected the notion that generalized allegations of wasted time or annoyance caused by isolated text messages amount to a constitutionally cognizable harm."

While Salcedo dealt with only one unsolicited text message and the Plaintiff here received five, the Court found that fact to be of little consequence. The Court in Salcedo explicitly found that there is "no minimum quantitative limit required to show injury; rather, the focus is on the qualitative nature of the injury, regardless of how small the injury may be." In other words, the Court said, the concreteness of the harm for Article III purposes does not depend on the "mere number of unwanted communications." The vagueness of Plaintiff's alleged injury and failure to allege any financial loss or other pecuniary harm rendered his claim without Article III standing, and the Court thus dismissed the case.

Muccio v. Glob. Motivation, Inc., No. 22-81004-CIV, 2022 WL 17969922 (S.D. Fla. Dec. 27, 2022)

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