On June 30, 2022, Michigan State Representative Mari Manoogian introduced House Bill 6307. Prefaced as "[a] bill to prescribe the rights and duties of parties to telephone solicitation sales," the proposed law is Michigan's first step in becoming another state jurisdiction to pass its own telemarketing regulations. The TCPA, or Telephone Consumer Protection Act, is a federal statute designed to protect consumer privacy by restricting certain types of telemarketing communications. The TCPA has been subject to wide-ranging interpretation and, consequently, inconsistent enforcement by courts in various Federal Circuits. Perhaps seeking uniformity in their own jurisdictions, states such as Florida and Oklahoma, have passed their own telemarketing laws, commonly referred to as "Mini-TCPAs." Now, Michigan may be next in line to adopt its own set of telemarketing regulations. Each state's Mini-TCPA statute has significant variations, but it can generally be said that all of them enact more stringent requirements on the telemarketing industry than their federal analogue. Michigan's new bill, if passed, would be the most restrictive yet.
More Stringent Requirements and Penalties Contained in Michigan's Proposed Telemarketing Law
It is important that telemarketing companies operating in Michigan closely examine the language of Michigan's proposed telemarketing law. For starters, while Federal law restricts telemarketers from calling residences before 8 a.m. or after 9 p.m., Section 15(c) of Michigan House Bill 6307 changes the in-state do-not-call hours to before 8 a.m. or after 8 p.m. Shockingly, Section 3 prevents sales calls from being made with a pre-recorded message, in whole or in part, even with consumer consent. Section 7(1) expands what is contained in the TCPA's identification requirements, necessitating that when a consumer answers the phone, a telemarketer must first state his or her true first and last name, and the full name, telephone number and address of the company that he/she is calling on behalf of. Section 39(2) of Michigan's proposed telemarketing bill would require that telemarketers keep records of their telephone solicitations for 4 years. Perhaps the most problematic subsection of Michigan's Mini-TCPA law is 15(b), which restricts telemarketers from "[e]ngaging a subscriber in a telephone solicitation repeatedly, continuously, or in a manner that a reasonable person would consider annoying, harassing, or abusive." Considering the large monetary judgments handed out in some TCPA class action orders, Michigan's proposed integration of a "reasonableness" standard is highly unnerving.
Further complicating matters, Michigan's new telemarketing bill authorizes the State Attorney General's Office to seek up to $25,000 for every violation of the proposed statute. Section 27(1) increases this penalty to $50,000 if the violation targeted vulnerable individuals. While previously mentioned in dicta, this class of individuals had never been codified until now. Section 2(s) defines a vulnerable individual as someone who is 75 or older, or who is disabled as "defined in section 103 of the persons with disabilities civil 1 rights act, 1976 PA 220, MCL 37.1103." If the violation was persistent or knowing, the fine is increased to $75,000. These large potential civil penalties are in addition to the $1,000 (plus attorney fees) that an individual plaintiff can recover for each violation in a private right of action proceeding.
The Michigan Telemarketing Bill's Handling of What Constitutes an Autodialer
Michigan's proposed Mini-TCPA refers to an autodialer as an automatic dialing and announcing device ("ADAD"). Section 2(a) defines an ADAD as any "device or system of devices that is used, whether alone or in conjunction with other equipment, for the purpose of automatically selecting or dialing telephone numbers." The proposed language makes clear that actual use is needed for equipment to qualify as an ADAD. Importantly, however, a single automated component of a dialing system would be enough to qualify the entire setup as an ADAD under Michigan's telemarketing bill. Curiously, as opposed to the TCPA and other Mini-TCPAs, mere use of an ADAD does not trigger liability. Section 9 of the bill makes clear that an ADAD violates the law ONLY if it is used to contact a vulnerable individual, or a consumer who is on the Federal do-not-call list. Consequently, Section 9 appears to be one part of the Michigan's proposed telemarketing law that is actually less stringent than the TCPA.
Why is Michigan's Telemarketing Bill Important?
While House Bill 6307 is not yet law, it is important to examine and prepare for its potential passage. Even if Michigan does not write the bill into law, it becomes one jurisdiction in a long line of states that have either enacted or proposed their own Mini-TCPAs. Again, possibly due to the lack of uniform application of the TCPA, states have decided to increasingly take matters into their own hands to protect their consumers. As always, it is important for national businesses to protect themselves in a regulatory and legal landscape where telemarketing laws vary considerably across state lines.
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