As 2022 comes to a close, we wanted to look back at the most significant Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) decisions of the year. While we didn’t see the types of landscape-altering decisions that we saw in 2021, there’s still plenty to take note of. We summarize here the biggest developments since our last update, listed by issue category in alphabetical order.
Arbitration: In Kelly v. McClatchy Co., LLC, 2022 WL 1693339 (E.D. Cal. May 26, 2022), the District Court denied the defendant’s motion to compel arbitration because the contractual relationship between the parties had terminated before the unwanted calls were made. Plaintiffs had originally signed defendant’s Terms of Service which bound them to an arbitration provision for all legal disputes. Plaintiffs then cancelled their subscriptions which subsequently ended the enforceability of the Terms of Service against them. However, plaintiffs then received unwanted calls from Defendant seeking service renewals which the court deemed were not covered by the arbitration clause, even under a theory of post-expiration enforcement.
ATDS: Following Facebook v. Duguid, 141 S. Ct. 1163 (2021), courts are still struggling to define an “automatic telephone dialing system,” and the Third Circuit weighed in through Panzarella v. Navient Sols., Inc., 2022 WL 2127220 (3d Cir. June 14, 2022). The district court granted defendant’s motion for summary judgment on the grounds that plaintiffs failed to show that an ATDS was used to call their phones. The Third Circuit upheld the summary judgment ruling but did not decide whether the dialing equipment used constituted an “ATDS” under the TCPA. Rather, its ruling hinged on the fact that defendant’s dialer pulled phone numbers from its internal database, not computer-generated tables. As such, the Third Circuit found that even though the system may very well be an unlawful ATDS system under the TCPA, if it is not used in that way, defendants could not be held liable.
In an interesting move, the court in Jiminez v. Credit One Bank, N.A., Nco Fin. Sys., 2022 WL 4611924 (S.D.N.Y. Sept. 30, 2022), narrowed the definition of an “ATDS,” choosing to reject the Second Circuit approach in favor of the Third Circuit’s approach in Panzarella. Here, plaintiff alleged that defendant used a dialing system to send numerous calls without consent. The Second Circuit follows the majority view that, if a system used to dial numbers has the ability to store or generate random numbers, the call made violates the TCPA, even if the random dialing function is not actually utilized. But the court in Jiminez found the Third Circuit’s reasoning persuasive and applied it to the case, finding that plaintiff failed to show the dialing system was actually used in a way that violated the TCPA. It granted summary judgment to defendants on the TCPA claims because the evidence showed the numbers used were all taken from a pre-approved customer list, not generated from random dialing.
Similarly, in Borden v. Efinancial, LLC, 2022 WL 16955661 (9th Cir. Nov. 16, 2022), the Ninth Circuit also adopted a narrower definition of an ATDS, finding that to qualify as an ATDS, a dialing system must use its automation function generate and dial random or sequential telephone numbers. This means that a mere ability to generate random or sequential numbers is irrelevant, the generated numbers must actually be telephone numbers. Given the circuit split on this issue, it seems likely that the Supreme Court will eventually have to weigh in.
Notably, in May 2022, the FCC issued a new order which will target unlawful robocalls originating outside the country. The order creates a new classification of service providers called “Gateway Providers” which have traditionally served a transmitters of international robocalls. These providers are domestic intermediaries which are now required to register with the FCC’s Robocall Mitigation database, file a mitigation plan with the agency, and certify compliance with the practices therein.
Class Certification: In Drazen v. Pinto, 41 F. 4th 1354 (11th Cir. July 27, 2022), the Eleventh Circuit considered the issue of standing in a TCPA class action. Plaintiffs’ proposed settlement class included unnamed plaintiffs who had only received one unsolicited text message. Because the court held in an earlier case (Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019)) that just one unwanted message is not sufficient to satisfy Article III standing, it found that some of the class members did not have adequate standing. The district court approved the class with these members in it, finding that those members could remain because they had standing in their respective Circuit and only named plaintiffs needed to have standing. The Eleventh Circuit held otherwise and vacated the class certification and settlement in the case. It remanded, allowing for redefinition of the class giving all members standing.
Consent: Chennette v. Porch, 2022 WL 6884084 (9th Cir. Oct. 12, 2022), involved a defendant who used cell phone numbers posted on publicly available websites, like Yelp and Facebook, to solicit client leads to contractors through unwanted text messages. The court rejected defendant’s argument that plaintiffs consented to the calls because their businesses were advertised through these public posts with the intent of obtaining new business. Beyond that, the court also found that even though these cell phones were used for both personal and business purposes, the numbers still fell within the protection of the TCPA, allowing plaintiffs to satisfy both statutory and Article III standing.
Damages: In Wakefield v. ViSalus, 2022 WL 11530386 (9th Cir. Oct. 20, 2022), the Ninth Circuit adopted a new test to determine the constitutionality of an exceptionally large damages award. Defendant was a marketing company that made unwanted calls to former customers, soliciting them to renew their subscriptions to weigh-loss products. After a multi-day trial, a jury returned a verdict for the plaintiff with a statutory damages award of almost $1 billion. The Ninth Circuit reversed and remanded to the district court to consider the constitutionality of the award. While the district court’s test asked whether the award was “so severe and oppressive” as to violate defendant’s due process rights, the Ninth Circuit instructed it to reassess using a test outlined in a different case, Six Mexican Workers. The Six Mexican Workers test assesses the following factors in determining the constitutionality of the damages award: “1) the amount of award to each plaintiff, 2) the total award, 3) the nature and persistence of the violations, 4) the extent of the defendant’s culpability, 5) damage awards in similar cases, 6) the substantive or technical nature of the violations, and 7) the circumstances of each .” We are still awaiting that determination on remand.
Standing: In Hall v. Smosh Dot Com, Inc., 2022 WL 2704571 (E.D. Cal July 12, 2022), the court addressed whether plaintiff had standing under the TCPA as a cell phone plan subscriber where the text messages were only received by someone else on the plan; in this case, plaintiff was the subscriber and her minor son was the recipient of the unwanted text messages. The court granted defendant’s motion to dismiss for lack of standing because she could not show that status of a subscriber alone could convey adequate standing under Article III.
In Rombough v. State Farm, No. 22-CV-15-CJW-MAR, (N.D. Iowa June 9, 2022), the court evaluated standing under the TCPA based on a plaintiff’s number being listed on the Do Not Call list. It determined that being on the DNC was not an easy ticket into court, plaintiff needed to allege more than just having its number on the list. Rather, the plaintiff need have actually registered their own numbers on the list.