I. Introduction

On January 20, 2016, the U.S. Supreme Court issued its highly anticipated opinion in Campbell-Ewald Co. v. Gomez, ruling that an unaccepted settlement offer, or offer of judgment, without actual payment and/or entry of judgment does not moot a named plaintiff’s class action claims.  In essence, the ruling prevents defendants from offering (but not paying) complete individual relief and then arguing for dismissal of a putative class action based on satisfaction of the class representative’s individual claim.  Although this ruling was a loss for class action defendant Campbell-Ewald Co. (“Campbell”), the opinion potentially validates a powerful tool for class action defendants going forward because it suggests that actual payment of complete individual relief and/or entry of judgment for that individual relief, rather than a mere offer, is sufficient to fully satisfy a class representative’s individual claim, resulting in the entry of judgment based on the absence of Article III standing and in dismissal of the class claims without prejudice.
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In two federal decisions handed down on the same day (Dec. 17, 2015), federal courts in California and Georgia gave early Christmas presents to defense lawyers by granting requests to stay TCPA cases based on proceedings before the U.S. D.C. Circuit Court of Appeals and the U.S. Supreme Court.  See Fontes v. Time Warner Cable, Inc., 2015 U.S. Dist. LEXIS 169580 (C.D. Ca. Dec. 17, 2015); Luster v. Jewelers, 2015 U.S. Dist. LEXIS 169115 (N.D. Ga. Dec. 17, 2015).  These decisions highlight how TCPA cases have increasingly become simultaneous multi-front battles before district courts, courts of appeal, the Supreme Court, and the FCC and how proceedings in one or more other venues often can influence defense at the district court level (even without perfect party or claim parity among the various matters).

In Fontes, defendant Time Warner Cable argued that the ATDS and pre-recorded message putative class action should be stayed again (it had already been stayed once pending action by the FCC) because of “re-assigned number” issues addressed by the FCC in its July 10, 2015 Declaratory Ruling and Order and the subsequent appeal of that order to the D.C. Circuit.  See 2015 U.S. Dist. LEXIS 169580 at *10 (consolidated case pending as ACA Int’l, et al. v. Fed. Commncn’s Comm., No. 15-1211 (D.C. Cir. 2015)).  The court agreed and granted the stay, reasoning that “in light of the close divide amongst the FCC commissioners and the fact that at least one commissioner believes the FCC’s ruling is ‘flatly inconsistent with the TCPA,’ there is a legitimate possibility that the Court of Appeals may overturn that ruling.  Accordingly, the proper interpretation of the TCPA remains unclear.”  Id. at *12.
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Joining a trend of decisions finding that conclusory ATDS allegations cannot survive Rule 12, Judge Leinenweber of the U.S. Northern District of Illinois found earlier this month that a plaintiff asserting ATDS (automatic telephone dialing system) and prerecorded voice claims under the TCPA (Telephone Consumer Protection Act), 47 U.S.C. § 227, “must supply enough additional

Over the past three months in the Media & Privacy Risk Report, we’ve analyzed the various parts of the July 10, 2015 FCC TCPA Order (the Order). See 80 Federal Register 61129. The Order’s implications for corporate America are in many respects staggering.

Although the petitioners to the FCC had hoped for clarity, reason and decreased litigation expense as a result of the Order, they instead face more uncertainty, numerous administrative leaps of logic, and exponentially increasing litigation expense because of the blood the TCPA plaintiffs’ bar now sees in the water. At this point, their having petitioned the FCC on the various points covered by the Order appears to have been a very perilous maneuver indeed. But only time will tell whether following administrative protocol before the FCC to ripen these issues for determination by a U.S. Circuit Court of Appeals will pay off in the long run.
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In the July 10, 2015 FCC Order regarding the TCPA (the “Order”), the FCC didn’t just sharpen the litigation “sword” that consumers can use against telemarketers—it also gave them a shield. The FCC affirmed that “nothing in the Communications Act or our rules or orders prohibits carriers or VoIP providers from implementing call-blocking technology that can help consumers who choose to use such technology to stop unwanted robocalls.” Order at ¶ 152. The FCC expressly rejected the notion that “[t]he current legal framework simply does not allow [phone companies] to decide for the consumer which calls should be allowed to go through and which should be blocked,” (Order at ¶ 153) and found that “[a]s long as the carrier offering its own product or coordinating with another product provider offers adequate disclosures, such as that the technology may inadvertently block wanted calls, consumers have the right to choose the technology.” (Order at ¶ 160.) In essence, the FCC found that although common carriers cannot block calls of their choosing, there is no rule against consumers choosing to block calls.
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In the July 10, 2015 Order, the FCC considered whether to allow an exemption to the prior express consent requirement for financial and health care alerts (i.e., autodialed calls to cell phones and text messages) and, if so, under what circumstances. The FCC attempted to strike a balance between consumers’ legitimate needs for time-sensitive information against potential invasions of their privacy rights. In the end, the petitioners—the American Bankers Association (ABA), on the one hand, and the American Association of Healthcare Administrative Management (AAHAM), on the other—got some, but not all, of the relief they had requested.
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If someone asked you to “call” him, what would you do? Shoot him an email? Start a chat on Facebook? Send a text message? Tweet him? Find him on LinkedIn? Chances are, even in this modern era when there are countless ways to communicate, you would still pick up the phone and make a traditional phone call. And certainly that was the case when the TCPA was passed in 1991, before text messages and social media even existed. So it seems like common sense that when the TCPA refers to a “call,” it means a traditional phone call—not a text message. FCC Commissioner Michael O’Rielly expressed this same sentiment in his dissent to the July 10, 2015 FCC Order (the “Order”): “I disagree with the premise that the TCPA applies to text messages. The TCPA was enacted in 1991—before the first text message was ever sent. The Commission should have gone back to Congress for clear guidance on the issue rather than shoehorn a broken regime on a completely different technology.” Order at p. 127.
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So far, our series on the July 10, 2015 FCC Order has painted a pretty bleak picture for businesses hoping to stay in compliance and limit litigation risks. But there was some good news in the FCC Order for certain businesses. Among the many petitions considered by the FCC were three focused on the rule change related to prior express written consent enacted by the FCC in 2012. The FCC’s response to those petitions was generally positive, although the relief actually granted was limited mostly to the petitioning organizations and their members. Still, in an order that is generally considered harmful to businesses, this has to be considered a small victory.
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One of the most troubling aspects of the July 10, 2015 FCC Order interpreting the TCPA is what it has to say about consent in the context of reassigned numbers. In his dissent, Commissioner Ajit Pai says that the rule “creates a trap for law-abiding companies by giving litigious individuals a reason not to inform callers about a wrong number” and calls it a “veritable quagmire of self-contradiction and misplaced incentives.” That may be one of the best descriptions of the TCPA on record, but it doesn’t exactly help us answer the core questions here: What is the rule and, perhaps more importantly, how can businesses avoid the traps being set by plaintiffs?
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The question seems simple: For purposes of the TCPA, who can be liable for making the call at issue? But with new technologies and service providers like YouMail, Glide and TextMe constantly emerging in the marketplace to make person-to-person communication more efficient and cost-effective, the answer to this question is more complicated than ever. The July 10, 2015 FCC Order provided some touchstones for this analysis, but much of the FCC’s language was tailored to the specific petitions before it, leaving open for interpretation how the Order might be applied to different technologies and factual circumstances.
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