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Financial Services Law Insights and Observations


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  • 11th Circuit: Insurance firm not required to pay broker’s $60 million TCPA judgment


    On June 1, the U.S. Court of Appeals for the Eleventh Circuit held that an insurance firm is not required to pay a $60.4 million TCPA judgment arising out of a Florida-based insurance broker’s marketing campaign accused of sending unsolicited text messages and phone calls to consumers. The broker sought coverage against a class action which alleged, among other things, that “by sending the text messages at issue. . . , Defendant caused Plaintiffs and the other members of the Classes actual harm and cognizable legal injury [including] . . . invasions of privacy that result from the sending and receipt of such text messages.” In response, the insurance firm asserted that the policy did not cover invasion of privacy claims such as those brought in the class action against the broker. Subsequently, the broker settled the suit and assigned all of its rights against its insurer to the plaintiffs, who attempted to enforce the judgment against the insurance firm. The 11th Circuit found that the broker’s insurance policy excluded coverage of certain actions that would prompt a lawsuit, including claims of invasion of privacy. The appellate court also concluded that the TCPA class action arose out of an “invasion of privacy” because the class complaint specifically alleged that the broker “intentionally invaded the class members’ privacy and sought recovery for those invasions.”

    However, one of the judges dissented from the ruling, opining that the policy the insurance firm wrote to the broker is “ambiguous as to whether it refers to the common-law tort called ‘invasion of privacy,’” noting that “in other words, if it could reasonably be so interpreted—then we must interpret it to refer only to that tort.” The judge also noted that it is “unclear to me why any party to an insurance policy would ever allow coverage to be dictated by the conclusory terms and labels that a plaintiff might later choose to include in her complaint.”

    Courts Eleventh Circuit TCPA Appellate Insurance Class Action

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  • 5th Circuit: A single unsolicited text constitutes TCPA standing


    On May 26, the U.S. Court of Appeals for the Fifth Circuit held that receiving a single unsolicited text message is enough to establish standing under the TCPA. The plaintiff alleged he received an unsolicited text message on his cell phone from the defendant after he had previously revoked consent and reached a settlement with the defendant to resolve a dispute over two other unsolicited text messages. The plaintiff filed a putative class action alleging that the defendant negligently, willfully, and/or knowingly sent text messages using an automatic telephone dialing system without first receiving consent, and that the unsolicited message was “a nuisance and invasion of privacy.” The district court dismissed the suit for lack of standing, ruling that a “single unwelcome text message will not always involve an intrusion into the privacy of the home in the same way that a voice call to a residential line necessarily does.”

    On appeal, the 5th Circuit disagreed, concluding that the nuisance arising from the single text message was a sufficiently concrete injury and enough to establish standing. “In enacting the TCPA, Congress found that ‘unrestricted telemarketing can be an intrusive invasion of privacy’ and a ‘nuisance,’” the appellate court wrote, commenting that the TCPA “cannot be read to regulate unsolicited telemarketing only when it affects the home.” In addition, the appellate court found that the plaintiff separately alleged personal injuries that separated him from the public at large by arguing that the “aggravating and annoying” robodialed text message “interfered with [his] rights and interests in his cellular telephone.” In reversing the district court’s ruling, the 5th Circuit disregarded precedent set by the 11th Circuit in Salcedo v. Hanna (covered by InfoBytes here). Calling the other appellate court’s decision “mistaken,” the 5th Circuit contended the other appellate court took too narrow a view of the theory of harm by concluding that there must be some actual damage before an action can be maintained. Moreover, the 5th Circuit stated the 11th Circuit misunderstood the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, writing “Salcedo’s focus on the substantiality of an alleged harm threatens to make this already difficult area of law even more unmanageable. We therefore reject it.”

    Courts Appellate Fifth Circuit TCPA Class Action Autodialer Spokeo

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  • 3rd Circuit: Alleging only a statutory violation of the TCPA does not establish standing to sue


    On May 19, the U.S. Court of Appeals for the Third Circuit affirmed a district court’s dismissal of a proposed TCPA class action suit for lack of standing, finding that the named plaintiff did not claim anything other than a “bare procedural harm that resulted in no harm.” According to the opinion, the plaintiff—who worked as an investigator for an attorney who prepared TCPA lawsuits—received a prerecorded telemarketing call in 2005 from a marketing company on behalf of the defendant national bank. The plaintiff, using a false name and employer, then placed and recorded more than 20 investigative calls to the marketing company to determine the number and frequency of calls it made. He then provided the recordings to the bank and declined the marketing company’s offer to place him on their Do-Not-Call list. In 2011, the plaintiff sued the bank alleging a single count violation of the TCPA but did not allege that he suffered any annoyance or nuisance from the marketing company’s call. The bank moved for summary judgment, arguing that: (i) the plaintiff lacked Article III standing to sue; (ii) “the call was exempt from the TCPA under FCC rules because the parties had an established business relationship” because the plaintiff was a customer of the bank; and (iii) the recorded message’s content did not violate the TCPA. The district court agreed with the bank and granted summary judgment on all three grounds.

    On appeal, the Third Circuit disagreed with the plaintiff’s assertion that all he had to do was allege a statutory violation in order to have standing to sue, declining “to adopt such an absolute rule of standing with respect to the TCPA.” Because “the TCPA is intended to prevent harm stemming from nuisance, invasions of privacy, and other such injuries,” the plaintiff must allege at least one of those injuries to show concrete harm necessary to demonstrate an injury-in-fact and establish standing to sue, the appellate court wrote.

    Courts Appellate Third Circuit TCPA Robocalls Spokeo

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  • Special Alert: Supreme Court narrows TCPA autodialer definition


    On April 1, the United States Supreme Court issued its long-awaited opinion in Facebook Inc. v. Duguid. The 9-0 decision narrows the definition of what type of equipment qualifies as an autodialer under the Telephone Consumer Protection Act (TCPA), a federal statute that generally prohibits calls or texts placed by autodialers without the prior express consent of the called party.

    The TCPA defines an autodialer as equipment with the capacity both “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers. The question before the Supreme Court in Facebook was whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not use “a random or sequential number generator.” The Court held it does not. Rather, to qualify as an “automatic telephone dialing system,” the Court held that a device must have the capacity either to store or produce a telephone number using a random or sequential generator. In other words, the modifier “using a random or sequential number generator” applied to both terms “store” and “produce.”


    In 2014, Noah Duguid received text messages from Facebook alerting him that someone attempted to access his Facebook account. However, Duguid alleged that he never provided Facebook his phone number and did not have a Facebook account.

    Duguid was unable to stop the notifications and eventually brought a putative class action against Facebook, alleging that Facebook violated the TCPA by maintaining technology that stored phone numbers, and sent automated texts to those numbers each time the associated account was accessed by an unrecognized device or web browser.

    The U.S. District Court for the Northern District of California dismissed Duguid’s amended complaint with prejudice, but the Ninth Circuit reversed, finding Duguid stated a claim under the TCPA by alleging Facebook’s notification system automatically dialed stored numbers. The Ninth Circuit held that an autodialer as defined under the TCPA, need not have the capacity to use a random or sequential number generator, but that it need only have the capacity to store number to be called and to dial those numbers automatically.


    The Supreme Court reversed the Ninth Circuit, holding that to “qualify as an ‘automatic telephone dialing system,’ a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.”

    In reaching this decision, the Court explained that “expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw” to the nuanced problems Congress sought to address with the TCPA. It further explained that Duguid’s interpretation of an autodialer—the one adopted by the Ninth Circuit—“would capture virtually all modern cell phones, which have the capacity to store telephone numbers to be called” and “dial such numbers.” “TCPA’s liability provisions, then, could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses.”

    And while the Court acknowledged that interpreting the statute in the manner it did may limit its application, the Court reasoned that it “cannot rewrite the TCPA to update it for modern technology,” and that its holding reflected the best reading of the statute.

    If you have any questions regarding the Supreme Court’s decision regarding the TCPA, please visit our Class Actions practice page, or contact a Buckley attorney with whom you have worked in the past.

    Courts U.S. Supreme Court Autodialer TCPA Special Alerts

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  • Court cites 6th Circuit, rules TCPA covers autodialers using stored lists


    On February 25, the U.S. District Court for the Northern District of West Virginia ruled that a satellite TV company cannot avoid class claims that it made unwanted calls to stored numbers using an automatic telephone dialing system (autodialer). The company filed a motion to dismiss plaintiff’s claims that it violated Section 227 of the TCPA when it made illegal automated and prerecorded telemarketing calls to her cellphone using an autodialer. The company argued, among other things, that the “statutory definition of an [autodialer] covers only equipment that can generate numbers randomly or sequentially,” and that “nothing in the complaint plausibly alleges that any of the calls were sent using that type of equipment.” According to the company, list-based dialing cannot be subject to liability under the TCPA. The court disagreed, stating that the TCPA makes it clear that it covers autodialers using stored lists. The court referenced a 6th Circuit decision in Allan v. Pennsylvania Higher Education Assistance Agency, which determined that “the plain text of [§ 227], read in its entirety, makes clear that devices that dial from a stored list of numbers are subject to the autodialer ban.” (Covered by InfoBytes here.) The court also referenced decisions issued by the 2nd, 6th, and 9th Circuits, which all said that the TCPA’s definition of an autodialer includes “autodialers which dial from a stored list of numbers.” However, these appellate decisions conflict with holdings issued by the 3rd, 7th, and 11th Circuits, which have concluded that autodialers require the use of randomly or sequentially generated phone numbers, consistent with the D.C. Circuit’s holding that struck down the FCC’s definition of autodialer in ACA International v. FCC (covered by a Buckley Special Alert). Currently, the specific definition of an autodialer is a question pending before the U.S. Supreme Court in Duguid v. Facebook, Inc. (covered by InfoBytes here). The court further ruled that three out-of-state consumers should be removed from the case as they failed to meet the threshold for personal jurisdiction, and also reiterated that the case could not be arbitrated as the company’s arbitration clause was “unconscionable.”

    Courts TCPA Autodialer Robocalls Appellate Sixth Circuit U.S. Supreme Court

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  • Court holds satellite provider not liable for telemarketer’s calls


    On February 12, the U.S. District Court for the Northern District of Georgia granted summary judgment in favor of a satellite TV company as to a class action’s TCPA claims, concluding that the company was not liable for its telemarketing service provider’s cold calls. As previously covered by InfoBytes, a consumer filed a class action against the company alleging that the company failed to maintain an “internal do-not-call list,” which allowed the company and its telemarketing service provider to contact him eighteen times after he repeatedly asked to not be contacted. The consumer sought certification “of all persons who received more than one telemarketing call from [the telemarketing service provider] on behalf of [the company] while it failed to maintain an internal do-not-call list.” The district court certified two representative classes: the Internal Do Not Call (IDNC) class and the National Do Not Call (NDNC) class. The company appealed the IDNC class and the U.S. Court of Appeals for the Eleventh Circuit vacated the district court’s certification of the IDNC class. The company then moved for summary judgment on the certified NDNC class claims and plaintiff’s individual IDNC claim.

    Upon review, the court granted summary judgment in favor of the company concluding that there was no evidence that (i) the cold calls were made by the telemarketing provider within its actual authority from the company; (ii) the company made representations sufficient to give the telemarketing provider the apparent authority to make the cold calls; or (iii) the company ever ratified the cold calls. Specifically, the court noted that not only did the company “categorically ban[] all residential and cellular cold calls,” it also “regularly issued reminders that [the telemarketing provider] was required to continue implementation of national-do-not-call procedures in compliance with the TCPA.”

    Courts TCPA Eleventh Circuit Class Action Appellate

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  • Court again rejects “unconscionable” arbitration provision


    On February 12, the U.S. District Court for the Northern District of West Virginia denied for a second time a satellite TV provider’s (defendant) motion to compel arbitration in a TCPA class action, concluding that the arbitration provision was “overbroad, absurd and unconscionable.” As previously covered by InfoBytes, the plaintiff filed a lawsuit against the defendant alleging the defendant violated the TCPA by making automated and prerecorded telemarketing calls to an individual even though her number was on the National Do Not Call Registry. The defendant moved to compel arbitration, claiming that the plaintiff’s dispute was covered by an arbitration agreement in the contract governing her cell phone service with a telecommunications company, which is an affiliate of the defendant. The district court denied the request, ruling that the allegations “did not fall within the scope of the arbitration agreement.” On appeal, the U.S. Court of Appeals for the Fourth Circuit issued a split opinion vacating a district court’s decision with the majority concluding that the allegations fit within the broad scope of the arbitration agreement, and that even though the plaintiff agreed to arbitration with a telecommunications company in 2012, the agreement extends to the TCPA allegations against the defendant after the telecommunications company acquired the defendant in 2015. Specifically, the appellate court stated that the arbitration agreement had a “forward-looking nature,” and that it seemed unlikely that the telecommunications company and its affiliates “intended to restrict the covered entities to those existing at the time the agreement was signed.” The 4th Circuit remanded the case back to the district court for consideration of unconscionability.

    On remand, the district court again denied the motion, stating that the “arbitration provision is overbroad, absurd and unconscionable, and far exceeds anything contemplated by Congress in enacting the [Federal Arbitration Act].” Specifically, the court stated the plaintiff was “an ordinary wireless consumer” given a “small electronic pinpad device” with a few lines of the agreement displayed at a time and an option to skip to an acknowledgment screen, which required her signature, in order to “obtain her line of service.” She would then be “irrevocably locked in to face demands that she arbitrate any dispute arising out of any relationship with virtually any of [the telecommunications company]’s corporate cousins—a list that could, overtime, comprise [] current competitors or not-yet created subsidiaries.” Because the arbitration provision was unconscionably broad, the court denied the motion to arbitrate.

    Courts TCPA Appellate Fourth Circuit Arbitration Federal Arbitration Act

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  • Courts say TCPA not invalidated by Supreme Court decision


    On January 31, the U.S. District Court of the Central District of California denied dismissal of a putative class action alleging that a consumer lender violated the TCPA, concluding that the U.S. Supreme Court’s decision in Barr v. American Association of Political Consultants Inc. (AAPC) (covered by InfoBytes here) does not bar the claims. According to the order, a consumer filed the putative class action alleging that the lender violated the TCPA by placing telemarketing calls to residential numbers listed on the National Do Not Call Registry. The lender moved to dismiss the action, arguing that the Court’s decision in AAPC (holding that the government-debt exception in Section 227(b)(1)(A)(iii) of the TCPA is an unconstitutional content-based speech restriction, and severing the provision from the statute), invalidated the entire TCPA from the time the offending exception was added in 2015 to July 2020 when the Court severed the provision from the statute. The district court disagreed, concluding that the Court’s decision in AAPC was limited to the specific provision for robocalls to cell phones in Section 227(b) and did not extend to Section 227(c)’s do not call provisions. Additionally, the court concluded that the “Court in AAPC did not conclude that the entire TCPA was unconstitutional.” Thus, Section 227(c) “remained ‘fully operative as law’” from 2015 through July 2020.

    Earlier on January 28, the U.S. District Court for the Southern District of California denied dismissal of a TCPA action for lack of subject matter jurisdiction, concluding that the Court’s decision in Barr, did not invalidate the TCPA in its entirety from 2015 until July 2020. According to the order, consumers filed a consolidated class action against a cruise line, alleging violations of, among other things, the TCPA for marketing calls made to class members’ cell phones using an automatic telephone dialing system between November 2016 and December 2017. The cruise line moved to dismiss the action, arguing that the Court’s decision in AAPC (holding that the government-debt exception in Section 227(b)(1)(A)(iii) of the TCPA is unconstitutional “because it favored debt-collection speech over political or other speech in violation of the First Amendment,” and severing the provision from the statute), invalidated the entire TCPA from when the offending exception was enacted in 2015, until the Court severed the amendment in July 2020. Disagreeing with other district courts (covered by InfoBytes here and here), the district court rejected the cruise line’s argument, concluding that the Court did not intend to have TCPA actions “cavalierly dismissed by a district court.” The district court relied on a statement made by Justice Kavanaugh in the Court’s plurality opinion, stating “our decision today does not negate the liability of parties who made robocalls covered by the robocall restriction.” The district court rejected the cruise line’s argument that Kavanaugh’s statement is dicta, because, among the fragmented decisions, seven justices “agree that the 2015 amendment should be severed and the liability of parties making robocalls who were not collecting a government debt is not negated.” Thus, because the cruise line was not attempting to collect a government debt, the district court denied the motion to dismiss.  

    Courts TCPA U.S. Supreme Court Class Action Autodialer

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  • FCC: Contractors must get consent to make robocalls under TCPA

    Federal Issues

    On December 14, the FCC released an order concluding that federal and state contractors are subject to the restrictions of the TCPA and must obtain prior express consent to call consumers. The order reverses a 2016 decision, which extended the presumption that “the word ‘person’ [in the TCPA] does not include the federal government absent a clear ‘affirmative showing of statutory intent to the contrary’” to calls made by contractors acting as agents of the federal government. The FCC acknowledges a number of requests to reconsider this conclusion, and in an effort to combat unwanted robocalls, the FCC now concludes that this presumption should not be extended to contractors. The FCC notes that there is “no longstanding presumption that a federal contractor is not a ‘person’” and the FCC did not “find any ‘context that otherwise requires’ [them] to ignore the express language of the Communications Act’s definition of the term ‘person’ in this situation.” While the presumption still applies to federal and state governments, the order clarifies that local governments are still considered a “person” under the TCPA and therefore, subject to the robocall restrictions without prior express consent.

    Federal Issues FCC TCPA Robocalls

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  • Eleventh Circuit affirms ruling in TCPA re-consent case


    On December 4, the U.S. Court of Appeals for the Eleventh Circuit affirmed summary judgment in a TCPA action in favor of a student loan servicer and an affiliate responsible for performing default aversion services (collectively, “defendants”), concluding that the plaintiff re-consented to being contacted on his cell phone after filling out a form on the servicer’s website. According to the opinion, following a class action settlement in 2010—in which members of the class (including the plaintiff) who did not “submit revocation request forms were ‘deemed to have provided prior express consent’” to be contacted by the defendants—the plaintiff later claimed to have revoked consent to being contacted through the use of an automated telephone dialing system (autodialer) during a call with the servicer. While on the call, the plaintiff filled out an online automatic debit agreement to make payments on his delinquent loan. The agreement included a demographic form with an option for the plaintiff to update his contact information, which included an optional cell phone number field and a disclosure that granted consent to being contacted on his cell phone using an autodialer. The defendants began contacting the plaintiff on his cell phone after he fell behind on his loan payments, and the plaintiff sued, alleging the defendants violated the TCPA by placing calls using an autodialer without obtaining his prior express consent. The district court granted the servicer’s motion for summary judgment, ruling that the plaintiff “expressly consented” to receiving the calls and could not “unilaterally revoke” consent “given as consideration in a valid bargained-for-contract,” and that the plaintiff nonetheless “reconsented when he submitted the demographic form.” The plaintiff appealed, arguing, among other things, that he did not re-consent to being contacted because the form was submitted directly after his oral revocation to the servicer. 

    On appeal, the 11th Circuit agreed with the district court, holding that while it was true that the plaintiff “filled out the demographic form just moments after he orally revoked his prior consent, [the plaintiff] cites no authority that this temporal proximity should require this Court to consider the separate interactions (of revoking consent and later reconsenting) as one lumped-together interaction.” As such, the appellate court disagreed with the plaintiff’s argument “that the revocation of consent standard should stretch to apply to [his] later reconsent to [the servicer].”

    Courts Appellate TCPA Eleventh Circuit Autodialer

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