TCPA Connect

Roth Invited to Give a Briefing on the New FCC TCPA Ruling in Upcoming PLI Webinar

The FCC's July Declaratory Ruling and Order on the Telephone Consumer Protection Act significantly impacted how companies in all business sectors may communicate with customers via telephone and text message. Marc Roth, co-chair of Manatt's TCPA Compliance and Class Action Defense Group, has been invited by PLI to present a briefing titled "New FCC TCPA Ruling—Significant Compliance Challenges for Companies" that will address the nuances and pitfalls of the new ruling, as well as provide practical compliance suggestions and strategies.

The webinar will be held on September 21, 2015. For more information or to register, click here.

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New Bill Would Create Criminal Penalties for TCPA Violations

Could telemarketers be facing jail time for violations of the Telephone Consumer Protection Act?

The answer might be "yes" if a bill introduced by Sen. Charles Schumer (D-N.Y.) gains approval in Congress. The Quell Unnecessary, Intentional and Encroaching Telephone Calls Act of 2015 (the QUIET Act) would impose criminal penalties for violations of the statute.

Specifically, defendants could face up to 10 years in prison or $20,000 in fines per call pursuant to the bill.

Currently being considered by the Senate Judiciary Committee, S. 1681 would apply to any commercial robocall made with an automatic telephone dialing system or prerecorded voice "for the purpose of soliciting or encouraging the purchase or rental of, or investment or enrollment in, property, goods or services."

Prior written consent from recipients would be required to make such calls. The measure does maintain some of the current exceptions found in the TCPA, such as emergency calls and calls made by nonprofits with tax-exempt status.

Sen. Schumer has proposed similar legislation in the past based on the belief that the existing penalties for statutory violations are not sufficient enough to deter bad actors.

"When it comes to the robocall industry, which is blatantly ignoring federal laws, we need to fight fire with fire—that means higher penalties, jail time and better technology to fight the spammers who have ruined countless family dinners, sporting events and other family gatherings," Sen. Schumer said in a statement when he first introduced the QUIET Act in 2014. "Existing laws, including the federal Do Not Call list, are great tools to protect consumers, but only if they have real teeth that will stop illegal robocalls in their tracks. The QUIET Act would stiffen both financial and legal penalties when federal law is violated and should provide a much greater disincentive to skirt do-not-call laws."

To read S. 1681, the QUIET Act, click here.

Why it Matters: The possible penalties created by the QUIET Act are certainly alarming, but the bill failed when first introduced in 2014 and the current proposal will again likely face strong industry opposition.

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Suit Claims Microsoft Solicited Numbers With Scams, Then Sent Texts in Violation of TCPA

The Federal Communications Commission's new declaratory order will change the interpretation of some aspects of the Telephone Consumer Protection Act, but one thing remains the same—putative class actions seeking large damage awards will continue to be filed.

In the most recent example, Edmund Pietzak filed suit in California federal court, alleging that Microsoft "solicits mobile phone numbers from potential customers using deceptive posting on social media websites" and then automatically enrolls the numbers "in a text message advertising program that repeatedly transmits unsolicited advertisements for Microsoft products to mobile phones of potential customers."

According to the complaint, one advertisement appeared on Facebook suggesting that users text the word "Surprise" to a short code in order "to find out how to win great prizes." Other offers instructed social media users on Instagram, Twitter, and YouTube to text "Happy" for "a special surprise offer" or "HALO" for "a chance to win a limited edition Xbox One console."

Instead of great prizes or Xboxes, those who texted began receiving messages from Microsoft at a rate of up to 10 texts per month, Pietzak said. Nowhere did Microsoft disclose that consumers would be enrolled in the automatic marketing text message system, the complaint alleged.

The plaintiff, an account manager at a Los Angeles literary and talent agency, claimed he suffered "actual harm and embarrassment in his profession" due to the unwanted ringing of his mobile phone. Characterizing the texts as a "relentless effort to advertise [Microsoft's] products," the complaint sought the maximum statutory damages of $1,500 per message as well as injunctive relief to halt the allegedly unlawful text messages.

To read the complaint in Pietzak v. Microsoft Corporation, click here.

Why it Matters: In addition to Microsoft, the complaint also named marketing company HelloWorld, the entity that according to the complaint orchestrated the text message campaign, as a defendant. Both defendants should be found liable, Pietzak told the court, referencing the FCC's recent order. "As its very name makes clear, the Telephone Consumer Protection Act is a broad 'consumer protection' statute that addresses the telemarketing practices not just of bad actors attempting to perpetrate frauds, but also of 'legitimate businesses' employing calling practices that consumers find objectionable," the FCC said. The mere filing of the case means nothing at this point, but does stand as a warning for advertisers to vet all campaigns proposed by agencies that involve the collection and use of consumer mobile phone numbers.

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New Jersey Court Enters $22M Default Judgment in TCPA Suit

Notorious marketing company Business 2 Business Solutions was hit with a $22 million default judgment in a New Jersey Telephone Consumer Protection Act lawsuit originally brought against a roofing company.

David/Randall Associates, Inc. was sued by a car dealership that received three unsolicited faxes from the roofing company in 2006. Discovery revealed that David/Randall worked with B2B, which sent almost 45,000 fax advertisements on its behalf over a three-month period to the dealership, City Select. The court certified a class of recipients and rejected David/Randall's proposal to cap damages at $300,000.

The roofing company then filed a third-party complaint against B2B and the company's owners, Caroline and Joel Abraham. David/Randall alleged that the Abrahams offered to market the company's roofing services through their facsimile advertising program and represented that they operated a lawful business. Once David/Randall acquiesced, the defendants "conceived, designed, and implemented" the campaign, the company said, and sent 44,832 unsolicited transmissions to a list of individuals "that they alone determined," all of which David/Randall believed to be lawful.

David/Randall asserted that the Abrahams should be held jointly and severally liable to contribute and/or provide indemnification for any judgment entered against it. The court entered judgment in favor of City Select in the amount of $22,405,000, and two days later David/Randall successfully effectuated personal service of the third-party complaint on the Abrahams in Brooklyn.

The Abrahams, who were implicated in dozens of other TCPA suits across the country, failed to respond. David/Randall moved for a default judgment and U.S. District Court Judge Jerome B. Simandle granted the motion.

"The record developed in this action readily supports a finding that acts by the Abrahams resulted in the same injury that has been alleged and adjudicated against David/Randall, namely, the transmission of unsolicited facsimile advertisements in violation of the TCPA," the court wrote. "Indeed, in entering judgment against David/Randall, the Court made clear that David/Randall's liability flowed directly from the Abrahams' direct transmission of over 44,000 unlawful facsimile advertisements. David/Randall, by contrast, bore vicarious liability for the Abrahams' actual transmissions, as a result of the fact that the Abrahams sent the transmissions on David/Randall's behalf, and in order to advertise David/Randall's roofing services."

Denying the motion for a default judgment would also prejudice David/Randall, the court said, as the company "has no other means of obtaining contribution from the Abrahams who share equally the burden of recompense."

Once the court concluded that a default judgment was appropriate, Judge Simandle turned to the appropriate amount of damages to be awarded. "Here, because David/Randall's damages flow directly from the Judgment entered against it … the calculation of damages in this instance proves uncomplicated," the court said. "Indeed, because the Abrahams, as stated above, have equal liability to that of David/Randall as joint tortfeasors in connection with the unlawful fax transmissions, the Court finds David/Randall entitled to the entry of Judgment in the same amount entered against it, $22,405,000."

To read the opinion in City Select Auto Sales v. David/Randall Associates, click here.

Why it Matters: The decision provides a powerful reminder about the potential liability for violations of the TCPA, not just for the entity engaged in the offensive behavior, but for all parties involved. B2B has been implicated in many other lawsuits across the country, from the Eleventh Circuit Court of Appeals to Michigan federal court.

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FCC Needs to Push Development, Raise Awareness of "Do Not Disturb" Tech, Lawmakers Say

In a letter to the Federal Communications Commission, eight lawmakers pushed the agency to speed the development of technology that would allow phone users to block telemarketing text messages and robocalls.

The FCC should work with wireless carriers and industry associations to develop "Do Not Disturb" tech that would block unwanted telemarketing on both landlines and cellphones, according to a letter co-signed by Sens. Ed Markey (D-Mass.), Ron Wyden (D-Ore.), Tammy Baldwin (D-Wisc.), Jeff Merkley (D-Ore.), Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), Al Franken (D-Minn.), and Amy Klobuchar (D-Minn.).

"This technology should be developed and deployed as quickly as possible, and it should be offered to all consumers at no additional cost," the letter stated. "The right to privacy should not be considered a luxury feature. It is also critical that 'Do Not Disturb' technology does not inadvertently block public safety notifications or calls and texts that consumers wish to receive."

In addition, the agency needs to raise consumer awareness of their rights with regard to robocalls, the legislators said, perhaps by an ad campaign presented in "a simple, transparent and easily accessible manner." "The FCC and carriers should disseminate resources widely that explain how consumers can prevent unwanted robocalls and robotexts on both wireless and landline phones," the lawmakers wrote.

The impetus for the letter: the FCC's Declaratory Ruling and Order, which addressed multiple important issues for advertisers. It provided a broader definition of "autodialer" and imposed liability for calls made to recipients of telephone numbers that have been reassigned. Now that the agency has adopted the Declaratory Ruling and Order, "more work remains to ensure that the Commission's new rules are as effective as possible," the Senators said.

To spur the FCC into action, the letter posed specific questions about the Do Not Disturb technology: "How does the FCC plan to work with phone companies to develop and institute the adoption of 'Do Not Disturb' technologies? How will the FCC work with phone companies to inform and educate consumers about the new tools (both 'Do Not Disturb' technology and simplified ways to stop telemarketing calls) that the FCC recently approved?"

The legislators requested a response from the agency by August 25.

To read the letter from lawmakers to the FCC, click here.

Why it Matters: The gift that keeps on giving, the FCC's Declaratory Ruling and Order continues to impact advertisers and marketers. The agency's tighter rules need accompanying technology, the Senators wrote, and consumers should be made aware of their rights. Responding to the letter, a spokesperson for the FCC said the agency "appreciates the Senators' continued attention to this issue." When the Commission issued the Declaratory Ruling and Order, Chairman Tom Wheeler "was very clear that he wants carriers to make 'Do Not Disturb' technology available as soon as possible," the spokesperson added. "We will continue to work with all interested parties to help make this a reality for consumers."

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