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On August 1, the U.S. District Court for the Northern District of West Virginia granted a plaintiff’s motion for class certification in an action against a satellite TV company (defendant) for allegedly placing unwanted telemarketing robocalls. According to the order, the plaintiffs alleged that the defendant retained a communications company to sell the defendant’s services and that the communications company purchased a list of leads and phone numbers from a third party to make telemarketing calls. According to the plaintiffs, the communications company failed to scrub the list for numbers on the national do-not-call list and called those numbers in violation of the TCPA. The district court noted that “[t]here are two overriding questions in this case: (1) whether [the communications company] contacted class members listed on the do-not-call registry; and (2) whether [the defendant] is liable for [the communication company’s] actions.” The district court further noted that “[a]ny individual issues or defenses are limited and easily resolved with aggregate data from defendant ." In agreeing with the “plaintiffs’ contention that this is a ‘model case for the application of the class action mechanism,’” the district court certified a nationwide class of nearly 114,000 individuals whose telephone numbers were listed on the do-not-call list and who received more than one telemarketing call within any 12-month period at any time from the communications company to promote the defendant.
On April 7, the U.S. District Court for the Northern District of California granted preliminary approval for a $13 million settlement in a class action against an affiliate of a real estate services company for allegedly violating the TCPA by soliciting calls to consumers. According to the plaintiff’s motion for preliminary approval, the plaintiff alleged that he received unwanted telephone solicitations on behalf of the defendant to his residential telephone lines that he had previously registered on the “Do Not Call” registry, in addition to alleging that he received repeated unwanted telemarketing calls even after he had requested that the defendant and/or its agents to not to call him back. If the settlement is approved, each member of the settlement class, which consists of individuals in the U.S. who received two or more calls since September 13, 2014 on their residential telephone number from the defendant’s affiliate that promoted the purchase of the defendant’s goods and services, would receive $350.00. The proposed settlement also seeks an additional $2.77 million in attorney fees and costs.
On March 9, the U.S. District Court for the Western District of North Carolina granted in part and denied in part a defendant university’s motion for summary judgment on claims that it unlawfully placed prerecorded calls to reassigned phone numbers based on the previous user’s consent. The plaintiff alleged that the defendant violated the TCPA by calling cellphones without first obtaining the current phone number owner’s prior express consent and making a “telephone solicitation” to individuals listed on the National Do-Not-Call-Registry. The plaintiff also contended that the defendant failed to provide a method for opting-out of receiving future calls. The defendant countered that it could not be held liable for the allegedly unlawful prerecorded calls because it had reasonably relied on the consent of the previous phone number’s user and was unaware that the number had been reassigned.
In partially denying the defendant’s motion for summary judgment, the court ruled that there was “no basis” in the text of the TCPA to conclude that callers who contact a phone number whose previous user provided consent but whose current owner did not could use “a reasonable reliance or good faith defense” to avoid liability. “Congress passed the TCPA to protect individuals from receiving invasive and unsolicited calls,” the court wrote. “Thus, adopting a good faith or reasonable reliance defense not only would have no basis in the text but also would contravene the stated purpose of the TCPA.” The court also declined to adopt the defendant’s “intended party” argument, finding that “[n]either the language nor the concept of an ‘intended’ party appears” in the TCPA, and that every circuit court that has opined on this issue “has concluded that the term ‘called party’ refers to the individual that actually receives the calls, as opposed to the ‘intended party’ of those calls.”
However, the court determined that the plaintiff’s allegation that the defendant violated the TCPA’s prohibitions on contacting numbers on the National Do-Not-Call-Registry cannot proceed “because, as a tax-exempt, non-profit organization, [the defendant] is not subject to the provisions regarding the National Do-Not-Call Registry.”
On January 18, the U.S. District Court for the Western District of Washington granted a motion for summary judgment in favor of an insurance company (defendant) with respect to a plaintiff’s TCPA allegations. The plaintiff alleged that the defendant, among other things, violated the TCPA by placing telephone calls to him and the putative class members whose telephone numbers are on the National Do Not Call (DNC) Registry. The defendant countered that the plaintiff spoke with the defendant during a 26-minute phone call and provided his personal information and consent to be called by the defendant. The plaintiff alleged that he had not submitted any information, and suggested that hackers may have been involved, and that he had engaged in a lengthy and detailed conversation with the defendant because he was “investigating” the identity of the caller and the motive for calling. However, the court noted that “the personal information [the plaintiff] disclosed during the call supports the contention that he in fact was interested in obtaining a quote and otherwise submitted an internet request,” and that no evidence supported the plaintiff having “investigative” motives.
According to the opinion, a “reasonable jury” would find that the defendant had permission to call the plaintiff and that, even if there were questions about whether the plaintiff had requested or consented to the disputed call, the procedures that the defendant had put in place to comply with the law brought it under the purview of the TCPA's safe harbor provision. The court also found that the defendant “produced significant evidence that as part of its routine business practice, it complies with the standards required by the safe harbor provision and had substantially complied with the purpose of the TCPA, ‘to protect consumers from the unwanted intrusion and nuisance of unsolicited telemarketing phone calls and fax advertisements,’ by only calling those who have requested a life insurance quote and consented to be called.”
On January 5, the FTC issued its National Do Not Call (DNC) Registry biennial report to Congress. According to the report, more than 244 million consumers have now placed their telephone numbers on the DNC Registry over the past two years. The report also highlighted that in FY 2021, the Commission received more than five million DNC complaints, the majority of which reported robocalls violations as opposed to live telemarketing. The FTC reported that the increased number of illegal telemarketing calls correlates with advancements in technology that make it easier for telemarketers to “spoof” the caller ID information accompanying a call. “[M]any telemarketers use automated dialing technology to make calls that deliver prerecorded messages (commonly referred to as ‘robocalls’), which allow violators to make very high volumes of illegal calls without significant expense,” the FTC said. Imposters posing as government representatives or legitimate business entities topped the complaint list, followed by calls related to warranties and protection plans, debt-reduction offers, and medical and prescription issues. Last month, in response to the consistently high level of impersonator scam complaints, the FTC issued an advanced notice of proposed rulemaking seeking comments on a wide-range of questions related to government and business impersonation fraud (covered by InfoBytes here). The FTC noted that these scammers are looking for information that can be used to commit identity theft or seek monetary payment and often request that funds be paid through wire transfer, gift cards, or cryptocurrency. Additionally, the FTC stated that since the beginning of the Covid-19 pandemic, it has received more than 18,000 Covid-related DNC complaints.
On November 23, the FTC released the National Do Not Call Registry Data Book for Fiscal Year 2021. The Data Book provides the most recent fiscal year information available on telemarketing sales calls and robocall complaints, including the types of calls reported to the FTC and a state-by-state analysis. In FY 2021, the Commission received 3.4 million robocall complaints—an increase from the 2.8 million robocall complaints received in FY 2020 but consistent with the higher number of complaints received in prior years. Imposters posing as government representatives or legitimate business entities topped the complaint list, followed by warranties and protection plans and supposed debt-reduction offers. Other common complaints included calls related to medical and prescription issues as well as computers and technical support. The Data Book contains aggregate data about phone numbers on the Do Not Call Registry, telemarketers and sellers that access the registry, as well as DNC complaints by topic and type.
On June 25, the FTC announced a major crackdown on illegal robocalls named “Operation Call it Quits,” which includes 94 enforcement actions from around the country brought by the FTC and 25 other federal, state, and local agencies. In addition to actions targeting the actors, the operation also includes a consumer education initiative and promotion of the development of technology-based solutions to block robocalls and fight caller ID spoofing. In addition to the 87 other enforcement actions brought under the initiatives, the FTC announced four new actions, some of which were filed by the DOJ on the FTC’s behalf, and three new settlements targeting robocallers for violations of the FTC Act and the Telemarketing Sales Rule (TSR), among other things. The FTC alleges many of the actors used illegal robocalls to contact financially distressed consumers regarding interest rate reductions, sell fraudulent money-making opportunities, pitch free medical alert systems, or develop leads for solar energy companies. The affected consumers in these actions were often listed on the Do Not Call Registry. The FTC provided a complete list of the 94 actions brought under Operation Call it Quits.
State Attorneys General participating in the initiative are: Alabama, Arizona, Colorado, Florida, Illinois, Indiana, Michigan, Missouri, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Texas, and Virginia. Additionally, local agencies include: the Consumer Protection Divisions of the District Attorneys for the Counties of Los Angeles, San Diego, Riverside, and Santa Clara, California; the Florida Department of Agriculture and Consumer Services; and the Los Angeles City Attorney.
On April 16, the U.S. District Court for the Eastern District of Pennsylvania granted in part and denied in part a telemarketing company’s motion to dismiss, concluding that the plaintiff did not have standing to bring some of his claims under the TCPA. According to the opinion, the plaintiff filed a lawsuit against the company for various claims under the TCPA, alleging that he received ten calls from the company to a phone number he had listed on the “National Do Not Call Registry” (Registry), nine of which were allegedly placed using an automatic dialing system (autodialer). The plaintiff requested orally, and later in writing, that the company cease calling the number, but the company allegedly continued to do so. The company moved to dismiss the action, arguing that the plaintiff created a business model to “encourage telemarketers to call his cellphone number so that he can later sue the telemarketers under the TCPA,” and therefore, has not suffered an injury-in-fact that the TCPA was designed to protect. The court agreed with the company on two claims related to the Registry, holding that the plaintiff does not have standing to bring claims under the TCPA’s prohibition of contacting numbers on the Registry because the phone was for business use and “business numbers are not permitted to be registered on the [Registry].” The court denied the motion to dismiss as to the remaining TCPA claims and ordered the company to respond.
- Kathryn L. Ryan and Jedd R. Bellman to discuss “Risk and compliance management: Are you covered?” at a Mortgage Bankers Association webinar
- Melissa Klimkiewicz and Daniel A. Bellovin to discuss “Things to know about flood insurance” at a NAFCU webinar
- Hank Asbill to discuss “Ethical issues at sentencing” at the 31st Annual National Seminar on Federal Sentencing
- Max Bonici will moderate a panel on “Enforcement risk and other regulatory and compliance issues related to crypto and digital assets” at the American Bar Association’s 2022 Annual Meeting
- John R. Coleman to provide a “CFPB Update” at MBA’s 2022 Regulatory Compliance Conference
- Amanda R. Lawrence to discuss “The shifting data privacy and data protection landscape” at MBA’s 2022 Regulatory Compliance Conference
- Jeffrey P. Naimon to provide “An update on key fair lending cases and the CRA and UDAAP rules” at MBA’s 2022 Regulatory Compliance Conference
- Benjamin W. Hutten to discuss “Fundamentals of financial crime compliance” at the Practicing Law Institute
- Benjamin W. Hutten to discuss “Ongoing CDD: Operational considerations” at NAFCU’s Regulatory Compliance & BSA Seminar
- James C. Chou to discuss ransomware at NAFCU’s Regulatory Compliance & BSA seminar