The law rarely moves in a uniform direction. This is especially true when it comes to the Telephone Consumer Protection Act ("TCPA"). Several recent decisions interpreting the TCPA's autodialer prohibition have come to the same conclusion: equipment is only an autodialer if it uses a random or sequential number generator to produce the number that is called or sent text messages. But a recent decision from an Arizona court, captioned Jance v. Homerun Offer, takes a different approach on TCPA violations.
How does the Jance decision affect what constitutes TCPA violations?
The Jance decision addressed three issues: (1) the autodialer provision, (2) the federal Do Not Call provision, and (3) vicarious liability. Jance allegedly received 29 unwanted calls on his cellphone from Homerun Offer. He filed a lawsuit against Homerun Offer and All Star Investments for alleged TCPA violations. Both defendants moved to dismiss the complaint, arguing that Jance failed to sufficiently allege TCPA violations.
In its decision, the Court sided with Jance on the autodialer claims and with the defendants on the Do Not Call and vicarious liability claims. Unlike several of its sister courts, the Court found that equipment with the capacity to produce numbers using a random or sequential number generator could constitute an autodialer, even if not used as such when the subject calls were placed.
The Court went on to hold that the TCPA's prohibition on calling numbers listed on the National Do Not Call Registry does not prohibit a business from calling to purchase something from the recipient. Rather, the Do Not Call provision only prohibits the caller from attempting to sell something to the call recipient.
All Star made the additional argument that it was not vicariously liable for the calls that Homerun placed. The Court agreed, finding that Jance had not alleged that All Star exercised substantial control over Homerun such that the two defendants were in an agency relationship.
Why does the Jance decision matter to your business?
The Jance decision, along with another recent decision by a Missouri court, demonstrates how the TCPA can change day to day and even differ in how courts interpret it. Following the Supreme Court's decision in Facebook v. Duguid, the general direction of TCPA law has been towards a narrower definition of what constitutes an autodialer, requiring use of a number generator to produce the subject called or texted telephone number(s). Looking beyond the ongoing autodialer dispute, Jance offers further guidance on two issues that are part of almost every case involving alleged TCPA violations.
We know that most of the telemarketing industry is focused on selling goods and services. A smaller percentage of it may have commercial aims, but may not necessarily fit squarely within the federal Do Not Call prohibition. With the autodialer definition having been narrowed by the Facebook decision, plaintiffs are now increasingly turning to the Do Not Call rule in recent litigation proceedings.
The Jance decision also highlights the heightened requirements plaintiffs face when trying to allege vicarious liability in telemarketing cases. Vicarious liability exists where the person or company that hires a call center to make telemarketing calls is also liable for the call center's TCPA violations. That relationship must be close enough that the company doing the hiring exercises substantial control over the party placing the subject phone calls. With so much of the telemarketing industry contracting with third parties to send text messages or place calls, the Jance Court's vicarious liability analysis should be a useful guide to businesses that wish to avoid future TCPA liability.
Hire experienced TCPA attorneys.
Running a business is difficult on its own. Trying to keep up with which direction the TCPA is moving from one day to the next is nearly impossible without good help. Hiring experienced attorneys who focus on all things telemarketing can make the difference between spending tens of thousands of dollars on litigation or being TCPA compliant and spending that money on expanding your operations. The attorneys at Klein Moynihan Turco have the telemarketing law experience to help your business stay TCPA compliant. If you need assistance with updating your telemarketing practices and procedures or defending against TCPA litigation, please email us at firstname.lastname@example.org or call us at (212) 246-0900.
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