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  • 9th Circuit: Defendant is liable for third-party calls

    Courts

    Recently, the U.S. Court of Appeals for the Ninth Circuit affirmed in part and reversed in part a district court’s ruling that a defendant knew its third-party contractor was making pre-recorded calls to prospective consumers without consumers’ consent in violation of the TCPA. As previously covered by InfoBytes, in December 2017, 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 suit alleged that the defendant hired a company to generate leads and initiate telephone calls to prospective consumers for cruise packages. The U.S. District Court for the Southern District of California denied dismissal of the TCPA action for lack of subject matter jurisdiction, concluding that the Court’s decision in Barr v. American Association of Political Consultants Inc., did not invalidate the TCPA in its entirety from 2015 until July 2020. In Barr the U.S. Supreme Court held that the TCPA’s government-debt exception is an unconstitutional content-based speech restriction and severed the provision from the remainder of the statute. (Covered previously by InfoBytes here.)

    On the appeal, the issue was whether the defendant is liable under the TCPA for prerecorded voice calls made by the third-party contractor to the plaintiffs, who had not given prior express consent to be called. The 9th Circuit agreed with the district court’s decision in granting summary judgment for the defendant where the TCPA did not require the defendant to ensure that the third-party contractor had prior express consent for each call that it made to the defendant’s customers, nor did the defendant have actual authority over the third-party contractor. However, the 9th Circuit concluded that the defendant may be vicariously liable for the third-party contractor’s calls because it might have ratified them. The appellate court noted that the defendant knew that it received 2.1 million warm-transferred calls from the company between January 2017 and June 2018, but only 80,081 of those transfers were from individuals who had allegedly consented to receiving the calls. The defendant also had knowledge that there was a slew of mismatched caller data, and that the third-party contractor placed calls using prerecorded voices. The appellate court wrote that, “[t]hese facts, in combination with the evidence of widespread TCPA violations in the cruise industry, would support a finding that [the defendant] knew facts that should have led it to investigate [the company’s] work for TCPA violations.”

    Courts TCPA Class Action Autodialer U.S. Supreme Court Appellate Ninth Circuit Third-Party

  • District Court preliminarily approves TCPA class action settlement

    Courts

    On October 28, the U.S. District Court for the Northern District of California granted final approval to a $14.1 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 not call him back. 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, will receive $350.00. The final settlement also includes $2.77 million in attorney fees and costs.

    Courts TCPA Class Action Real Estate Do Not Call Registry Settlement

  • District Court denies defendant's motion in FCCPA case

    Courts

    On March 25, the U.S. District Court for the Middle District of Florida denied a TV provider’s (defendant) motion for summary judgment while partially granting and partially denying a motion for partial summary judgment from the plaintiff in a Florida Consumer Collection Practices Act (FCCPA) suit. According to the order, the plaintiff allegedly signed up for the defendant’s service, but “pause[d]” the program, which permitted her to suspend her service for nine months for $5 per month. The plaintiff filed for bankruptcy protection, listed the defendant as an unsecured creditor, and obtained a discharge. The plaintiff’s lawyer sent two faxes to the defendant, which disclosed to the defendant that the plaintiff was represented by counsel. The defendant sent five billing notifications and made six calls to the plaintiff, attempting to collect on the $5 monthly payment. A district court granted the defendant summary judgment on claims that it violated the FCCPA and the TCPA. The plaintiff appealed the decision, which affirmed the ruling on the TCPA claim, but reversed the FCCPA ruling, finding that the defendant may have attempted to collect a debt that was discharged and that it contacted the plaintiff after being notified that she was represented by an attorney. According to the order, the court stated that the “[p]laintiff has proffered enough evidence in the record from which a jury could reasonably infer that [the defendant] knew the Pause debt was invalid and that it did not have the right to collect it,” but “[o]n the other hand, considering the evidence in a light most favorable to [the defendant], a jury could reach the opposite conclusion, as [the defendant] has provided record evidence from which a jury could infer [the defendant] did not know that the Pause debt was invalid.”

    Courts State Issues Florida Debt Collection Consumer Finance TCPA Bankruptcy

  • District Court denies defendant’s MSJ in TCPA claim regarding plaintiff’s consent

    Courts

    On March 21, the U.S. District Court for the Northern District of Illinois denied a defendant’s motion for summary judgment regarding alleged TCPA violations and dismissed a plaintiff’s FDCPA claim against a debt collector. According to the memorandum, after the plaintiff was hospitalized, she was billed for the balance of her debt once insurance payments were credited to her account. The hospital called the plaintiff to collect the balance and later placed the account with the defendant, who then called the plaintiff eight times, leaving a pre-recorded message, and sent one text message. The plaintiff filed suit, claiming that the defendant violated the FDCPA by failing to send a validation notice and violated the TCPA because she revoked consent to be contacted when the hospital originally called her. As a “unique posture,” according to the district court, the plaintiff claimed to not have standing to pursue the FDCPA claim while the defendant insisted that she did. The plaintiff contended that while she felt “anxiety” when “having to relive the car accident,” “[t]hese are not damages that create injuries-in-fact for purposes of standing under the FDCPA.” The district court agreed and dismissed the FDCPA claim. As for the TCPA claim, the defendant argued both that the plaintiff could not revoke consent to be contacted because she signed a consent form at the hospital and that there was no evidence consent was revoked when she was contacted by the hospital. The plaintiff testified that she spoke with an agent of the hospital, disclosed to the agent that she was not responsible for the balance, and requested to be placed on the do-not-call list. Determining that a genuine issue of material fact existed regarding the plaintiff’s consent, the district court denied the defendant’s motion for summary judgment as to the TCPA claim

    Courts Debt Collection Consumer Finance TCPA FDCPA

  • District Court denies motions in FDCPA and TCPA suit

    Courts

    On March 18, the U.S. District Court for the District of Nevada denied motions for judgment on the pleadings filed by both the plaintiff and defendant in a lawsuit alleging violations of the FDCPA and TCPA. According to the order, the defendant allegedly offered to settle an unpaid medical debt with the plaintiff; the plaintiff accepted the offer and paid the debt. After the settlement, the defendant allegedly called the plaintiff and left voicemails seeking to collect the same debt. The plaintiff filed suit, alleging that the calls violated the TCPA because she revoked consent to be contacted after she paid the debt. The plaintiff also alleged that the defendant violated the FDCPA by attempting to collect the debt after it had been settled. In denying the parties’ cross motions for judgment on the pleadings, district court observed that, although the plaintiff had previously consented to being contacted, it could not “determine as a matter of law whether merely settling the Debt was enough to revoke Plaintiff’s consent.” With respect to the FDCPA claim, the district court “would grant Plaintiff’s motion for judgment on the pleadings under the FDCPA, if it were not for Defendant’s affirmative defense ‘bona fide error,’” for which the debt collector has the burden of proof.

    Courts TCPA FDCPA Debt Collection Consumer Finance

  • District Court: Callers cannot rely on prior cell phone user’s consent to place prerecorded calls

    Courts

    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.”

    Courts TCPA Consumer Protection Class Action Do Not Call Registry

  • District Court partially grants bank’s motion in TCPA case

    Courts

    On March 3, the U.S. District Court for the Western District of Kentucky partially granted and partially denied a defendant bank’s motion for summary judgment in a TCPA case. According to the opinion, the plaintiff allegedly did not meet his minimum monthly credit card payments, so the defendant began conducting debt collection calls. The defendant allegedly attempted 574 communications via phone call, prerecorded messages, or text messages, including 111 prerecorded messages, during a 7-month period.

    The plaintiff filed suit, alleging the defendant violated the TCPA by contacting him using an automatic telephone dialing system (ATDS) before and after he allegedly revoked consent to be contacted. The district court held that the telephone system used by the defendant to contact the plaintiff did not qualify as an ATDS under the Supreme Court’s ruling in Facebook v. Duguid (Covered by a Buckley Special Alert here), which narrowed the definition of an ATDS under the TCPA. The court was “not persuaded by [the plaintiff’s] argument that [the telephone system] is an ATDS simply because it has the ‘capacity to store telephone numbers using a random or sequential number generator, and then to dial those numbers without human intervention.’”

    The plaintiff also argued that the defendant violated the TCPA by sending the 111 prerecorded messages. The court determined that while the plaintiff had initially consented to being contacted by the defendant when he provided his telephone number to create his account, there was a genuine dispute of material fact as to whether the plaintiff subsequently revoked his consent. Even though the defendant submitted seven call recordings between itself and the plaintiff in support of its argument that the plaintiff did not specifically revoke consent, the court explained that “the evidence could lead reasonable minds to differ,” including the plaintiff’s deposition testimony, his request to have information sent to him via mail, his refusal to talk to a collector and hanging up the phone on a subsequent call, and his failure to answer the phone when the defendant called.

    Courts TCPA Autodialer U.S. Supreme Court Debt Collection Consumer Finance

  • FCC proposes record $45 million fine against robocaller

    Federal Issues

    On February 18, the FCC released a proposed $45 million fine against a lead generator accused of conducting an illegal robocall campaign that made false claims about the Covid-19 pandemic to induce consumers into purchasing health insurance. This is the FCC’s largest ever proposed robocall fine to date. According to the FCC, the lead generator violated the TCPA by placing 514,467 robocalls to cellphones and landlines without subscribers’ prior express consent or an emergency purpose. The Florida-based lead generator allegedly purchased lists of phone numbers from third-party vendors and acquired phone numbers from consumers seeking health insurance quotes online, “without clearly disclosing that, by providing contact information, the consumers would be subject to robocalls.” It then left prerecorded voice messages marketing insurance plans sold by companies that had hired the lead generator. Many of these robocalls, the FTC claimed, were also unlawfully made to consumers on the Do Not Call Registry. FCC Chairwoman Jessica Rosenworcel issued a statement announcing that, in addition to the record fine, the Commission also established a new partnership with 16 state attorneys general in order to share information and resources to mitigate robocalls.

    Federal Issues FCC Enforcement Robocalls TCPA Lead Generation State Attorney General State Issues

  • FCC proposes to classify ringless voicemails as “calls” under the TCPA

    Agency Rule-Making & Guidance

    On February 2, FCC Chairwoman Jessica Rosenworcel announced a proposal that would classify technology that leaves ringless voicemails on consumers’ cell phones as “calls” under the TCPA and therefore subject to the FCC’s robocalling restrictions. If adopted by the full Commission, callers using this form of technology would be required to obtain a consumer’s consent before delivering a ringless voicemail. The announcement explained that the TCPA “prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.” According to Chairwoman Rosenworcel, ringless voicemails should face the same consumer protection rules as other robocalls. The proposal is in response to a petition that asked the FCC to find that ringless voicemails are not calls protected by the TCPA.

    Agency Rule-Making & Guidance FCC Robocalls TCPA

  • District Court grants class certification in robocall TCPA suit

    Courts

    On January 27, the U.S. District Court for the District of Arizona granted a plaintiff’s renewed motion for class certification in an action against a national bank defendant for allegedly contacting noncustomers with unauthorized robocalls, in violation of the TCPA. According to the plaintiff’s motion for class certification, the defendant allegedly placed calls with an artificial or prerecorded voice to the plaintiff class, who were not the defendant’s customers. The plaintiffs alleged that they did not consent to the calls, which regarded overdue credit card accounts, and sought to certify a nationwide class of those who received these calls since August 2014 despite not being a customer. Among other things, the defendant argued that the common questions of fact did not predominate because individualized determinations needed to be made to determine whether the defendant had consent to call a putative class member, and whether a prerecorded message actually played. The court determined, however, that the plaintiffs’ allegations were not only “typical of the class, they are largely identical.” Additionally, though the court noted that “some persons who otherwise would be class members may have consented to receive [the defendant’s] robocalls,” the court was ultimately “persuaded based on [the plaintiffs’] argument and past caselaw” that “individualized issues of consent can be overcome without resort to a series of minitrials.” The court further noted that “the basic questions in this case are the same for all class members: Did [the defendant] call a putative class member without authorization? And, did a prerecorded or artificial voice play during the call? If the answer to both questions is yes—and all evidence indicates that it will be yes for many putative class members—recovery is appropriate. Precedent ... demonstrates these questions can be litigated as a class.”

    Courts TCPA Class Action Robocalls

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