The Latest Practice Tips for TCPA Litigation Involving Robocalls and Junk Faxes

The Telephone Consumer Protection Act (TCPA) provides strong private remedies for unwanted robocalls and junk faxes, including statutory damages of $500 to $1500 for each call. Nevertheless, industry continues to send Americans tens of billions of robocalls a year, many of them unwanted and illegal under the TCPA.

The result has been a torrent of private TCPA litigation, including many class actions. The law in this area is continually developing as courts must interpret the application of the TCPA (enacted in 1991) to the industry’s latest technological attempts to avoid the statute’s requirements. This article surveys notable recent rulings and new issues, providing practice tips for successful TCPA litigation involving robocalls and junk faxes. For more detail, see NCLC’s Federal Deception Law Chapter 6—the digital version has just been updated with all the very latest court decisions and expert thinking.

How to Argue That a Robocall Is a Covered Automatic Telephone Dialing System

The TCPA prohibits the use of an Automatic Telephone Dialing System (ATDS) to call cell phones and certain other sensitive numbers without the called party’s consent. Both a 2015 and several earlier FCC orders have adopted a broad definition of an ATDS, facilitating private TCPA litigation. These rulings though were thrown into turmoil by the D.C. Circuit’s 2018 decision in ACA International v. Fed. Commc’ns Comm’n, 885 F.3d 687 (D.C. Cir. 2018), which set aside portions of the 2015 FCC ruling that had adopted a broad definition of ATDS.

ACA International did not address the earlier FCC orders, and thus has left courts trying to resolve whether those earlier expansive orders as to the definition of an ATDS still apply. Among other rulings, the earlier orders hold that predictive dialers and any dialer that operates without significant human intervention are ATDSs. In the past six months, district courts have continued to split on this issue. For the very latest decisions, see NCLC’s Federal Deception Law § 6.3.2.2.3. Maes v. Charter Communication, 345 F. Supp. 3d 1064 (W.D. Wis. 2018), is particularly clear in setting out the arguments for holding that those earlier FCC orders remain in effect.

Courts that find that the FCC’s earlier orders are no longer in effect must then interpret the statutory language itself. The best decision on this question is Marks v. Crunch San Diego, L.L.C., 904 F.3d 1041 (9th Cir. 2018), which holds that a dialer is an ATDS if it stores numbers and then dials them automatically, even if the numbers are not produced randomly or sequentially but are added by humans. Several recent decisions from district courts outside the Ninth Circuit agree with Marks. While a number of other recent lower court decisions disagree with Marks, all of them either read the word “store” out of the statute or give it an untenable interpretation. See NCLC’s Federal Deception Law § 6.3.2.2.3.

How to Combat the Latest Schemes to Evade the ATDS Definition

The industry has attempted to devise calling systems that make massive numbers of calls but evade the TCPA’s definition of ATDS. Some courts have held that a system in which a “clicker agent” repeatedly clicks on numbers presented by a dialing system, which then dials them for another person—often in a faraway location—to take the call, is not an ATDS. This issue is currently before the Eleventh Circuit in Glasser v. Hilton Grand Vacations Co., L.L.C., No. 18-14499J.

TCPA plaintiffs should investigate the facts of these cases very carefully to determine, among other things, how the numbers to dial were generated, whether the dialer stored the number for a period of time and then dialed it, and whether the clicker agent had any discretion to select or reject numbers. See NCLC’s Federal Deception Law § 6.3.2.5. Whether certain text messaging systems are ATDSs also continues to be problematic. See id. § 6.7.2.

How to Plead That a Caller Used an ATDS

The increased uncertainty about the definition of an ATDS makes discovery all the more important. Recognizing that a consumer who receives a call has no way, at the pleading stage, to know the technical details of the calling system that was used, courts have continued to allow plaintiffs to plead fairly generally that an ATDS was used. While merely parroting the statutory definition is likely to be held insufficient, most courts hold that pleading any other facts, such as a delay, a clicking noise, a pattern of calls, or defendant’s statements in job ads, is enough to survive a motion to dismiss. See id. § 6.11.3.

Construe Ambiguities in a Contract Against the Drafter

When a consumer has consented to receive robocalls, the scope of that consent can make the difference between a winning case and a losing case. In such a case, the consent form should be construed against the drafter. Any limits on revocation of consent (which most courts hold to be invalid in any event) or the manner of doing so should be similarly construed. See id. § 6.3.4.2.2, 6.3.4.4.3, 6.3.4.4.3a.

The Latest Advice on Responding to Article III Spokeo Challenges to Robocall Cases

Since the Supreme Court’s decision in Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S. Ct. 1540, 194 L. Ed. 2d 635 (2016), every TCPA plaintiff must be prepared for a motion to dismiss the case on the ground that the plaintiff lacks Article III standing because the unwanted call or junk fax did not cause a concrete injury. In the past six months many more district courts, including courts in the First, Second, Fourth, Fifth, and Eleventh Circuits, where there are not yet Circuit decisions on point, have weighed in with decisions rejecting such arguments in robocall/robotext cases. See NCLC’s Federal Deception Law §§ 6.10.3.5, 6.10.5.

Other new decisions hold that:

• Receipt of “ringless voicemail” is a concrete injury whether or not it causes the consumer’s phone to ring, as the messages take up space in the consumer’s voicemail box, may result in the consumer having to pay a charge, and deplete the phone’s battery: Silbaugh v. Censtar Energy Corp., 2018 WL 4558409 (N.D. Ohio Sept. 21, 2018);
• Failure to object to calls does not defeat Article III standing: N.L. by Lemos v. Credit One Bank, 2018 WL 5880796 (E.D. Cal. Nov. 8, 2018); and
• Plaintiffs need not identify a separate harm from the use of an ATDS that is different from the harm they would have suffered if the defendant had made the calls or sent the text messages manually: Armstrong v. Investor’s Business Daily, Inc., 2018 WL 6787049, at *6 (C.D. Cal. Dec. 21, 2018).

The Latest Advice on Responding to Article III Spokeo Challenges to Junk Fax Cases

Courts are split on the question whether the recipient of an unsolicited fax has Article III standing where the only TCPA violation alleged is that the required notice of the recipient’s right to opt out of receiving further faxes does not comply fully with the FCC’s rules. In St. Louis Heart Center, Inc. v. Nomax, Inc., 899 F.3d 500 (8th Cir. 2018), the Eighth Circuit termed this a technical violation and held that the harm the plaintiff claimed—loss of toner and paper, wasted time, and invasion of privacy—was not fairly traceable to the violation, so the plaintiff lacked Article III standing. This decision stressed facts that may be a basis for distinguishing it: that the plaintiff did not claim that the faxes were sent without consent; that the faxes provided a method of opting out by checking a box and faxing the notice back to the sender; that they included the name, telephone number, and email address of a contact person at the company sending the fax; and that the plaintiff had not attempted to opt out.

Moreover, it can be argued that the decision erroneously treats the lack of a proper opt-out notice as merely a procedural violation. First, many courts treat denial of information that a party is required by statute to provide as a concrete injury in and of itself. In any event, the TCPA’s opt-out provisions create certain rights that are indisputably substantive, such as the requirement that the sender set up a system to receive opt-out notices twenty-four hours a day, seven days a week. While a number of district courts have issued decisions similar to St. Louis Heart Center, a significant number of decisions have disagreed and found Article III standing. See NCLC’s Federal Deception Law § 6.10.6. A claim that is based largely on the absence of a compliant opt-out notice is more likely to survive an Article III standing challenge if the plaintiff read the opt-out notice and was deterred or confused by the elements that did not comply with the statute.

New Rulings on the Requirement of an Opt-Out Notice on Solicited Faxes

As originally written by the FCC, the requirement of an opt-out notice applied not just to unsolicited faxes, but also to solicited fax advertisements—those sent with the recipient’s prior express invitation or permission. However, in 2017 the D.C. Circuit held that the application of the opt-out notice requirement to solicited faxes exceeded the FCC’s statutory authority. Bais Yaakov of Spring Valley v. Fed. Commc’ns Comm’n, 852 F.3d 1078 (D.C. Cir. 2017). On November 14, 2018, the FCC repealed the requirement. Order, In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, Junk Fax Prevention Act of 2005, 2018 WL 6017682 (F.C.C. Nov. 14, 2018), published at 84 Fed. Reg. 10,266 (Mar. 20, 2019). Both the FCC’s order and the D.C. Circuit’s decision leave intact the requirement of an opt-out notice on faxes sent pursuant to an established business relationship. See NCLC’s Federal Deception Law § 6.8.2.4.

Sixth Circuit Weighs In on When a Junk Fax Is an Unsolicited Advertisement

The junk fax rule generally prohibits any unsolicited “advertisement,” i.e., material that advertises the commercial availability or quality of property, goods, or services. 47 U.S.C. § 227(a)(5); 47 C.F.R. § 64.1200(f)(15). Many courts have held that a fax that does not purport to include an advertisement but that covertly promotes a product is an advertisement. The Sixth Circuit has now held that, while the fax must propose a commercial transaction, it need not be a direct transaction between the sender and the recipient. Accordingly, a fax was an advertisement where it sought the recipient’s contact information so that others could send it advertisements. Matthew N. Fulton, D.D.S., P.C. v. Enclarity, Inc., 907 F.3d 948 (6th Cir. 2018). See NCLC’s Federal Deception Law § 6.8.2.1.

Plaintiff and Defendant Tactics Involving Motions in Limine and Evidence

Motions in limine are important in TCPA cases and are discussed in a new section added to the title’s digital version—NCLC’s Federal Deception Law § 6.11.5a. For example, a court granted a TCPA plaintiff’s motion in limine to exclude references to the amount of statutory damages that can be awarded under the TCPA. Mohamed v. Off Lease Only, Inc., 2018 WL 3882774 (S.D. Fla. July 18, 2018). The court allowed the defendant to mention that statutory damages are available, but excluded reference to their amount.

One court granted a defense motion to exclude the terms “autodialer” and “robocaller” as unfairly prejudicial. Barnes v. Conn Appliances, Inc., 2018 WL 4100943 (S.D. Miss. Aug. 28, 2018). However, the wide use of these terms in decisions, FCC pronouncements, and vernacular English makes this ruling questionable. Another court, noting that the parties had used the terms “autodialer” and “ATDS” interchangeably throughout the case, rejected a motion to require the parties to refer only to “automatic telephone dialing system” rather than “autodialer” at trial. Mey v. Venture Data, L.L.C., 2017 WL 10398568 (N.D. W. Va. July 6, 2017).

Evidence of other TCPA complaints and claims against a defendant is relevant to knowledge or willfulness, so is admissible at trial. Lardner v. Diversified Consultants Inc., 2014 WL 1979221 (S.D. Fla. May 8, 2014).

New Holding Limits Exemption for HIPAA Providers and Financial Institutions

In 2015, the FCC allowed “free to end user” calls to be made by financial institutions and health care providers for certain time-sensitive messages under specified conditions. In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961, ¶¶ 38–46 (F.C.C. July 10, 2015). A court has now ruled that if the caller does not show that its calls complied with all the conditions for one of these exemptions, the exemption is inapplicable. Smith v. Rite Aid Corp., 2018 WL 5828693 (W.D.N.Y. Nov. 7, 2018). See NCLC’s Federal Deception Law § 6.3.3.2.