The first half of 2021 saw one of the most significant TCPA rulings in many years as Facebook v. Duguid, 141 S. Ct. 1163 (2021), appeared to settle the long-debated question of what constitutes an automatic telephone dialing system (“ATDS”). But while the Supreme Court’s April ruling was extremely positive for the TCPA defense bar, it by no means brought an end to TCPA claims. Significant cases have continued to yield decisions, including cases that have sought to interpret Facebook. And the state of Florida stepped into the abyss in passing a “mini-TCPA” statute that went into effect earlier this month that regulates telemarketing at the state level, with a much broader definition of the relevant technology. Thus, the TCPA (and related statute) litigation landscape, while upended to some degree, remains unsettled, and we’ll continue to provide our insights. We summarize here developments since our last update, listed by issue category in alphabetical order.
ATDS: The biggest case in this area was, of course, the Facebook case, where the Supreme Court unanimously held that to constitute an ATDS, the technology used must have the present ability to store or produce a telephone number using a random or sequential number generator and then must actually place a call to the claimant’s phone. This case resolved a circuit split over how to interpret the statutory definition of an ATDS, with the Court’s favoring a narrow interpretation requiring use of the random or sequential generator aspect of the system. Time is already telling and will continue to tell how lower courts will apply this ruling to future claims involving text messages and prerecorded calls. Courts have already begun ruling on particular common dialing systems. In Barnett v. Bank of Am., N.A., a federal district court in North Carolina held that the Avaya system is not an ATDS under the TCPA because it lacks the random or sequential generator function. 2021 U.S. Dist. LEXIS 101171 (W.D.N.C. May 28, 2021). Under the same reasoning, the federal district court in South Carolina ruled that the Aspect predictive dialer is also not an ATDS. See Timms v. Usaa Fed. Sav. Bank, 2021 U.S. Dist. LEXIS 108083 (D.S.C. June 9, 2021). Courts also have begun relying on Facebook to dismiss complaints without adequate ATDS allegations. See, e.g., McEwen v. Nat’l Rifle Association of Am., et al., No. 2:20-cv-00153 (D. Me. Apr. 14, 2021); Hufnus v. DoNotPay, Inc., 2021 WL 2585488 (N.D. Cal. June 14, 2021); Watts v. Emergency Twenty Four, Inc., 2021 WL 2529613 (N.D. Ill. June 21, 2021). But Facebook is not necessarily a silver bullet on the ATDS issue. Courts have still declined to dismiss cases where the complaint adequately alleges the use of an ATDS, as defined in Facebook. See, e.g., Montanez v. Future Vision Brain Bank, LLC, 2021 WL 1697928 (D. Colo. Apr. 29, 2021); Atkinson v. Pro Custom Solar LLC, 2021 WL 2669558 (W.D. Tex. June 16, 2021); Carl v. First Nat’l Bank of Omaha, 2021 WL 2444162 (D. Me. June 15, 2021).
Commercial Pretext: In Ambassador Animal Hospital, Ltc. v. Elanco Animal Health, Inc., 2021 U.S. Dist. LEXIS 30268 (N.D. Ill. Feb. 18, 2021), the court addressed faxes sent to the plaintiff inviting employees to a continuing education presentation. Although the event itself was free, the plaintiff alleged it had a commercial pretext of selling veterinary products and services. The court granted the defendant’s motion to dismiss for two reasons. First, the court held that the faxes did not constitute advertisements under the TCPA because they did not facially offer a product or service for sale. Second, the plaintiffs did not sufficiently allege that the faxes constituted a pretext for a commercial purpose.
Common Carrier Liability: The decision in Mey v. All Access Telecom, Inc., 2021 U.S. Dist. LEXIS 80018 (N.D. W.Va. Apr. 23, 2021), highlights broader potential liability for common carriers and their involvement in making calls. The district court denied motions to dismiss from several defendants that are common carriers. The court referred to a 2015 FCC Order, which extends TCPA liability to an entity that “takes the steps necessary to physically place a telephone call” or is “so involved in the placing of a specific telephone call as to be deemed to have initiated it.” In looking at the totality of the circumstances, the court used seven factors to determine conduct that falls under this definition and ultimately rejected the argument that common carriers are shielded from TCPA liability generally.
Do-Not-Call Policy: In an unusual ruling, the court in Perrong v. All Star Chimney Solutions, Inc., 2021 U.S. Dist. LEXIS 106538 (D. Mass. June 7, 2021), awarded damages for violating the TCPA’s regulation that a company maintain a written do-not-call list policy and produce it on demand to a requesting customer. The plaintiff here received four automatic calls from the defendant but alleged he was listed on the national do-not-call registry. When he requested the defendant’s do-not-call policy, the company failed to produce it. After the suit was filed, the defendant failed to respond to the complaint, thus the court awarded a $500 default judgment to the plaintiff.
Emergency Purpose: The emergency purpose exception in the TCPA has been highlighted in connection with recent claims relating to informational COVID-19 texts and calls. In Gabertan v. Walmart, Inc., 2021 U.S. Dist. LEXIS 41988 (W.D. Wash. Mar. 5, 2021), the court granted the defendant pharmacy’s motion to dismiss on the plaintiff’s claim that text messages with an update on the store’s COVID-19 policies violated the TCPA. The court held that the emergency purpose exception in the TCPA should be interpreted broadly. Additionally, the text was not promoting a commercial product, but rather providing information to its customers.
Standing: Although not a TCPA case, the Supreme Court’s ruling in TransUnion LLC v. Ramirez, 141 S.Ct. 2190 (2021), could significantly impact TCPA litigation. In TransUnion, the Court clarified what constitutes an “injury in fact” for the purposes of Article III standing, holding that “an injury in law is not an injury in fact. Only those plaintiffs who have been concretely harmed by a defendant’s statutory violation may sue that private defendant over that violation in federal court.” Id. at 2205. Thus, a plaintiff cannot recover damages for a statutory violation unless he or she was concretely harmed—and there is a strong argument that many TCPA plaintiffs are not concretely harmed by the statutory violations that form the basis of their complaints. Before TransUnion, the circuit courts directly addressing standing in TCPA cases seemed to conflict. In Leyse v. Bank of America, 2021 WL 1997452 (3d Cir. May 19, May 19, 2021), the Third Circuit held that a plaintiff could not demonstrate sufficient “injury in fact” to establish Article III standing when he alleged only a bare procedural violation of the law with no allegation of harm. But in Cranor v. 5 Star Nutrition, L.L.C., 998 F.3d 686 (5th Cir. 2021), the Fifth Circuit decided (without the benefit of the Supreme Court’s TransUnion decision) that receipt of a single text message allegedly violating the TCPA was enough to establish Article III standing. It remains to be seen whether the Supreme Court will take up these TCPA standing issues directly or rely on the lower courts to properly interpret TransUnion.
Vicarious Liability: In McCurley v. Royal Sea Cruises, 2021 U.S. Dist. LEXIS 17619 (S.D. Cal., Jan. 28, 2021), the court determined that the defendant was not vicariously liable for the calls made on its behalf by the third-party call center vendor it contracted with. The contract between the defendant and the call center contained a provision that defendant would only purchase leads from calls made with consent from the recipients. The court reasoned that because the defendant ensured that the opt-in language on its websites was sufficient and the contract provided for consented calls only, the calls were not made with actual authority. Therefore the defendant was not liable for calls made to individuals who had not consented to them.