Hot Developments with the Telephone Consumer Protection Act

February 18, 2015 2:00 – 3:30 pm eastern

Panelists Tom Cunningham, Locke Lord LLP (tcunningham@lockelord.com)

Matt Loker, Kazerouni Law Group (ml@kazlg.com) Christine Reilly, Manatt, Phelps & Phillips, LLP (creilly@manatt.com)

Kurt Schroeder, Federal Communications Commission (Kurt.Schroeder@fcc.gov)

Moderator: Daniel Blynn, Venable LLP

Consumer Protection, Advertising Disputes & Litigation, and Privacy & Information Security Committees

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Agenda • Panel Introductions • General TCPA Overview • FTC’s Telemarketing Sales Rule and the

Interplay with the TCPA • Hot TCPA Issues • Plaintiffs’ and Defendants’ Perspectives on

TCPA Cases • Questions & Answers

General TCPA Overview

Kurt Schroeder

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TCPA Overview

• Enacted by Congress in 1991; FCC adopted implementing regulations in 1992; major rulemaking to revise rules, adopt National Do-Not-Call Registry in 2003

• Restricts certain marketing and non-marketing calls and text messages to cell phones and residential landlines

• Prohibits – without prior express consent – autodialed or prerecorded non-emergency calls or texts to wireless numbers, regardless of content

• Prohibits – without prior express consent – prerecorded telemarketing calls to residential lines

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TCPA Overview

• Requires prerecorded messages to identify the party responsible for initiating the call and provide a phone number for that party (with opt-out mechanism for prerecorded telemarketing calls/texts)

• Prohibits telemarketing calls to numbers on National Do-Not-Call Registry

• Prohibits unsolicited fax advertising, and requires all fax ads to include opt-out instructions

• Specifies technical requirements for fax machines

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TCPA Overview 2013 Amendments

Rule What is Now Required?

Opt-Out Mechanism

Telemarketers must offer an interactive opt-out mechanism for all prerecorded telemarketing calls, and that mechanism must be announced at the outset of the call. Upon invocation, the consumer must automatically be added to the seller’s do-not-call list and the call must be terminated immediately.

Prior express written consent

Express consent required before all autodialed or prerecorded calls to wireless numbers, with consent in writing if telemarketing. Express written consent required for prerecorded telemarketing calls to residential lines.

No “Established Business Relationship”

Established business relationship no longer relieves robocallers of prior express consent requirement.

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TCPA Overview

• Potential for hefty damages for violations of the TCPA and FCC rules: – Consumers may seek statutory damages of $500 or

actual loss, whichever is greater, for each TCPA violation, with treble damages for “willful” or “knowing” violations; no cap on total damages

– In addition, the FCC and courts have ruled that a seller can be vicariously liable under the TCPA for calls made by third-party telemarketers

• FCC enforcement action can result in up to $16,000 civil forfeiture per violation for non-carriers

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TCPA at the FCC

• Junk Faxing – Over 60 petitions received by FCC since 2013

pertaining to “opt-out notice” rule for solicited faxes

– Anda Order (Oct. 30, 2014) decided 23 petitions

– 38 similar petitions filed later are currently pending

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FTC’s Telemarketing Sales Rule (“TSR”) and Its Interplay

with the TCPA

Kurt Schroeder

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TSR vs. TCPA

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• Types of Calls Generally Covered – TSR: Telemarketing calls only – TCPA: All calls + text messages + fax ads

• Jurisdiction – TSR: FTC, although no jurisdiction over common

carriers, banks/financial institutions, insurance companies, airlines, or intrastate telemarketers

– TCPA: FCC; covers all telemarketers, as well as non-telemarketing users of autodialers and prerecorded messages; also fax advertisers

TSR vs. TCPA

• Government Enforcement – TSR:

• Federal court action for injunctive relief brought by FTC directly

• Civil penalties brought in conjunction with DOJ – TCPA:

• Administrative proceeding for civil forfeiture (up to $16,000 per violation for non-carriers)

• If forfeiture not paid, DOJ collection action in federal court

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TSR vs. TCPA

• Private Right of Action – TSR:

• Only if amount in controversy exceeds $50,000 in actual damages per person

• No statutory damages – TCPA:

• $500 or actual loss – whichever greater – in damages per violation

• Treble damages for willful or knowing violations • No damage threshold

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TSR vs. TCPA

• Prerecorded calls: – Both TSR and TCPA prohibit prerecorded

telemarketing calls to residential or wireless numbers, unless the caller has prior express written consent

• Autodialer Calls: – TSR: does not address calls or text messages placed

using an autodialer – TCPA: prohibits all non-emergency autodialed

calls/texts, regardless of content, placed to wireless numbers without prior express consent; consent must be in writing if telemarketing

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TSR v. TCPA

• Telemarketing Robocalls – Similarities Between TSR and TCPA – Consent

• Written; signed (E-Sign OK); clear and conspicuous; willingness of consumer to receive robocalls; no condition of purchase

– No established business relationship exception

– Automated interactive opt-out mechanism 14

TSR v. TCPA

• Notable Robocall Exceptions/Variations – Charitable calls:

• FTC: No jurisdiction over non-profits, but TSR does regulate for-profit telefunders

• FCC: Prior express consent for charitable robocalls to wireless lines can be oral or written; no consent required for charitable tax-exempt nonprofit robocalls to residential lines

– Business-to-Business Sales Calls: • FTC: Not covered by TSR, unless robocall is selling nondurable office and

cleaning supplies • FCC: No TCPA rules on sales robocalls from business-to-business, except

robocalls to business wireless lines covered under general wireless line rules

– Non-Sales Calls • FTC: Not telemarketing – no consent needed • FCC: Prior express consent can be oral or written for non-sales robocalls to

wireless lines; no consent needed for non-sales robocall to residential lines 15

Hot TCPA Issues

• Unintended recipients • Reassigned/recycled phone numbers • Mobile marketing post-October 2013

amendments • Vicarious liability • Autodialer issues

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Unintended Recipient Issues

Christine Reilly

Hot TCPA Issues

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Unintended Recipients

• TCPA prohibits only those calls made without the “prior

express consent of the called party.” – What does “called party” mean?

• Ybarra v. DISH Network LLC, 2014 WL 6085292 (N.D. Tex. Nov. 14, 2014): Court rejected DISH’s summary judgment argument that plaintiff did not have standing to sue under the TCPA because plaintiff was not the intended recipient – “As for whether the ‘called party’ means only the intended recipient, the Court declines to construe the statute as such.”

– “The phrase ‘called party’ means the individual who received the call because ‘consent to call a given number must come from its current subscriber.’” (emphasis in original; citing Seventh and Eleventh Circuit decisions).

– As the current subscriber and the individual receiving calls from DISH on her cell phone, plaintiff had standing under the TCPA.

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Unintended Recipients

• Jordan v. Nationstar Mortg. LLC, 2014 WL 5359000 (N.D. Cal. Oct.

20, 2014): in the context of rejecting defendant’s motion for a stay pending FCC’s determination of pending petitions, court noted that California district courts and others have concluded that “called party” means the person who is called, regardless of whether the defendant intended to call that person or not.

• Moore v. DISH Network LLC, -- F. Supp. 3d --, 2014 WL 5305960

(N.D. W. Va. Oct. 15, 2014): a plaintiff need not be the intended recipient of the calls to his cellular phone to assert TCPA claims.

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Unintended Recipients

– Not all courts agree:

• Leyse v. Bank of Am., Nat’l Ass’n, 2014 WL 4426325 (D.N.J. Sept. 8, 2014): granting defendant’s motion to dismiss TCPA claim brought by unintended recipient of phone call and rejecting plaintiff’s argument that TCPA standing is not limited to the intended recipient but, rather, to any “person or entity” who receives a call.

– “This Court . . . Finds that the TCPA cannot be construed as broadly as Plaintiff suggests. Here, the facts demonstrate that Defendants were attempting to contact Dutriaux, not [plaintiff]. Although [plaintiff] answered the call, he was an unintended recipient and incidental recipient of a properly directed communication to someone else. . . . [W]hen unintended recipients of a communication have standing, ‘a business could face liability even when it intends in good faith to comply with the provisions of the TCPA[.]’”

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Unintended Recipients

– Consumer Bankers Association, Petition for Declaratory Ruling, CG Docket No. 02-278 (Sept. 19, 2014)

• Seeks clarification from the FCC that a “called party” refers only to the “intended recipient” of the call.

• CBA notes the recent rise in TCPA litigation related to calls to phone numbers that have been reassigned, and asserts that “[i]f a caller is liable for obtaining the consent of persons, such as the holders of reassigned numbers, whose identities cannot be ascertained before calls are placed, then complete compliance with the prior express consent requirement is impossible.”

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Reassigned/Recycled Phone Numbers Issues

Tom Cunningham

Hot TCPA Issues

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Reassigned/Recycled Phone Numbers

Issue: when a telephone number for which consent to receive calls was obtained from the original subscriber is reassigned to another subscriber, and a company then dials the number, who is the called party

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Reassigned/Recycled Phone Numbers

• Soppet v. Enhanced Recovery Company, LLC, 679 F.3d 637, 643 (7th Cir.

2012) – Two unknown customers incurred a debt to AT&T; Enhanced recovery attempted to collect

the debt by calling them at the numbers they provided. – Those numbers had been reassigned to the plaintiffs in this case. – Court held that “called party” was not the “intended recipient” – “Consent to call a given number must come from its current subscriber.”

• Breslow v. Wells Fargo Bank, N.A., 755 F.3d 1265 (11th Cir. 2014) – Plaintiff sued after Wells Fargo called her minor child’s cell phone for debt collection

purposes. – Wells Fargo claimed that the number had been provided by a former customer and the

company did not know the number had been reassigned. – Court rejected argument by Wells Fargo that “called party” should be interpreted as the

“intended recipient” rather than the actual recipient. – Held that the “called party” was the “subscriber to the cell phone service” (following a

previous holding in the Eleventh Circuit).

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Reassigned/Recycled Phone Numbers

• Nunes v. Twitter, Inc., No. 3:14-cv-02843 (N.D. Cal. Nov. 26, 2014)

– Plaintiff sued after receiving an SMS text message from Twitter. – She alleged that she and some of the putative class members possess “recycled

numbers,” which previously belonged to people who consented to receive the texts, and that Twitter knew or should have known that the numbers had been transferred to people who had not given consent.

– In a one-sentence analysis, the court rejected Twitter’s argument that it had no way to know whether a particular cell phone number had been reassigned and, therefore, should not be liable for such texts.

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Pending FCC Petitions

• Reassigned Phone Numbers – Stage Stores, Inc., Petition for Expedited Declaratory Ruling, CG

Docket No. 02-278 (June 4, 2014) • Seeks to establish “an exception to liability” for marketing text messages

sent to a wireless number for which the sender had obtained prior express consent but the number was subsequently reassigned without the sender’s knowledge

– United Healthcare Services, Inc., Petition for Expedited Declaratory Ruling, CG Docket No. 02-278 (Jan. 16, 2014)

• Requests a declaratory ruling that parties are not liable under the TCPA for “informational, non-telemarketing calls, especially healthcare-related calls” to reassigned wireless telephone numbers if the caller had previously received prior express consent to call such numbers and the caller did not know of the reassignment

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Reassigned/Recycled Phone Numbers

• Courts have a mixed response to motions to stay pending FCC determinations of the reassigned number and “called party” issues – Matlock v. United Healthcare Servs., Inc., 2014 WL 1155541

(E.D. Cal. 2014) – granting stay pending resolution of the United Healthcare FCC petition seeking clarification of the consent requirement in the recycled number context.

– Jordan v. Nationstar Mortgage, LLC, 2014 WL 5359000 (N.D. Cal. 2014) – denying motion to stay because the FCC is not likely to rule on the issues in the near future and “[c]ourts in this circuit have ruled on” the called party issue.

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Mobile Marketing Issues (post-October 2013 amendments)

Christine Reilly Tom Cunningham

Hot TCPA Issues

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Consent for Mobile Calls

Customer service/informational calls:

– Prior express consent required

Debt collection calls/informational calls:

– Prior express consent required

Marketing calls:

– Prior express written consent required (effective October 16, 2013)

You ALWAYS need some kind of consent when dialing mobile phones using an automated dialing equipment, artificial voices or prerecorded voice messages!

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The “TCPA Wireless Cliff” – October 16, 2013

Game changer for mobile marketing!

The FCC changed the rules. As of October 16, 2013, verbal consent to initiate mobile telemarketing telephone calls (including text messages) through automated technology (prerecorded voices or autodialers) is no longer sufficient. “Prior express written consent” is now required prior to initiating such calls. See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 27 F.C.C.R. 1830, 1831 (F.C.C. Feb. 15, 2012).

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What is Required For Prior Express Written Consent?

For Telemarketing Calls Only: Identify each specific seller to whom consent is being provided Identify the consumer’s phone number Indicate an affirmative agreement (i.e., I agree/ consent) Disclose that the consumer is authorizing the seller to engage in

advertising or telemarketing (i.e., offers for products/services) Disclose that the calls will be made using automated technology Disclose that the consumer is not required to provide consent as a

condition of purchasing goods or services Obtain a written signature from the consumer (either electronically

through E-SIGN or handwritten)

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What is Telemarketing?

• “Advertisement” means any material advertising the commercial availability or quality of any property, goods or services.

• “Telemarketing” means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

• As a general rule, calls that are not purely informational in purpose and message constitute telemarketing.

• Dual-purpose calls (calls that have both an informational and a telemarketing purpose) are considered telemarketing. See Chesbro v. Best Buy Stores, L.P., 705 F.3d 913, 918 (9th Cir. 2012)

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What Is Telemarketing?

Telemarketing does not include: – Debt collection calls – Calls for political purposes – Calls made by loan servicers regarding the servicing of a

consumer loan, home loan modification – Airline notification calls – Bank and credit card balance and fraud alerts – School and university notifications – Research or survey calls – Package deliveries – Wireless usage notifications

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The “TCPA Wireless Cliff” – The Aftermath

• What about legacy or existing customer lists prior to October 16, 2013? Do they need to comply with the new requirements?

• Are some of the new disclosure requirements merely “technical” in nature?

• Is the “consent not required for purchase” disclosure required in all cases?

• Who is a “specific seller” that must be named in a disclosure?

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FCC Petitions Still Pending Regarding New Regs

• Coalition of Mobile Engagement Providers,

Petition for Declaratory Ruling, CG Docket No. 02-278 (Oct. 17, 2013)

• Direct Marketing Association, Petition for

Forbearance, CG Docket No. 02-278 (Oct. 17, 2013)

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Revocation of Consent

Diamonds are forever, but is consent?

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Revocation of Consent

Gager v. Dell Financial Services LLC, 727 F.3d 265 (3rd Cir. 2013) • Gager purchased Dell computer equipment and provided her cell number as part of

application. When she defaulted, Dell began leaving prerecorded messages on her cell phone. Gager sent a letter to Dell with her cell phone number requesting that the calls stop, but the calls continued.

• In a case of first impression for a federal appellate court, the Third Circuit held that consumers have the right to revoke consent and that there is no temporal restriction on that right.

• The court reasoned that consent can be revoked under common law, any ambiguity in the TCPA should be resolved in favor of the consumer, and the FCC’s Soundbite advisory ruling suggests that consent under the TCPA can be revoked.

Osorio v. State Farm Bank, FSB, 746 F.3d 1242 (11th Cir. 2014) • Osorio’s roommate provided his cell phone number to State Farm when applying for

a credit card to pay for her insurance. State Farm later called that number to collect the balance due. Osorio answered some of these calls and said he told the caller to “stop calling.”

• Court held that absent a contractual provision to the contrary, consent could be orally revoked – by the person who gave the consent or by the roommate.

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Revocation of Consent Not all courts agree… • Saunders v. NCO Fin. Sys., 910 F. Supp. 2d 464, 468 (E.D.N.Y. 2012)

(holding that “there is no provision in the TCPA ... that allows withdrawal of a voluntarily-given, prior express consent to call a cell phone number”)

• Chavez v. Advantage Group, 2013 U.S. Dist. LEXIS 110522, at *11-12 (D. Colo. Aug. 5, 2013) (“Consent [once given] ... could not be ... effectively withdrawn.”)

• Kenny v. Mercantile Adjustment Bureau, 2013 U.S. Dist. LEXIS 62415, at *18-19 (W.D.N.Y. May 1, 2013) (suggesting in dicta that revocation is not possible

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How To Revoke Consent

Written Revocation Required

• Starkey v. Firstsource Advantage, 2010 U.S. Dist. LEXIS 60955 (W.D.N.Y. Mar. 11, 2010). Explicitly states that verbal revocation is not sufficient under the TCPA. “There is nothing in either the TCPA or the FCC’s December 28, 2007 Declaratory Ruling to support plaintiff’s claim that a verbal request is sufficient to cease legitimate debt collection efforts.”

• See also Cunningham v. Credit Mgmt., L.P., 2010 U.S. Dist. LEXIS 102802 (N.D. Tex. Aug. 30, 2010) (following Starkey); Moore v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS 104517 (W.D.N.Y. Sept. 15, 2011) (“[A] verbal request to cease debt collection calls to a cellular phone will not be sufficient to revoke ‘prior express consent’ under the TCPA”); Moltz v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS 85196 (W.D.N.Y. Aug. 3, 2011) (noting that the FDCPA written notice requirement “overrides” the TCPA).

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How To Revoke Consent

Verbal Revocation Sufficient

• Beal v. Wyndham Vacation Resorts, 2013 U.S. Dist. LEXIS 89840, at *41 (W.D. Wis. June 20, 2013). “[C]onsumers have the right to revoke consent to receive autodialed calls under the [TCPA] and ... they may do so orally or in writing.”

• Adamcik v. Credit Control Servs., 832 F. Supp. 2d 744 (W.D. Tex. 2011). Court finds that TCPA’s silence on revocation means that oral revocation should be sufficient.

• Gutierrez v. Barclays Group, 2011 U.S. Dist. LEXIS 12546 (S.D. Cal. Feb. 9, 2011). Determining that because the FCC indicated that prior express consent need not be in writing, a consumer can revoke consent orally.

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Vicarious Liability Issues

Matt Loker

Hot TCPA Issues

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Vicarious Liability

• Sellers can be held vicariously liable for calls or texts made by a third party. – 2013 FCC declaratory ruling “clarif[ied] that while a seller does

not generally ‘initiate’ calls made through a third-party telemarketer within the meaning of the TCPA, it nonetheless may be held vicariously liable under federal common law principles of agency for violations of either section 227(b) or section 227(c) that are committed by third-party telemarketers.” In re Joint Petition Filed by DISH NETWORK, LLC, CG No. 11-50, 2013 WL 193449, at *1 (FCC May 9, 2013).

• FCC determined that “on behalf of,” “on whose behalf,” and similar phrases used in the TCPA impose vicarious liability on a seller under federal common law agency principles, including apparent authority and ratification. United States v. DISH Network, LLC, -- F. Supp. 3d --, 2014 WL 7013223 (C.D. Ill. Dec. 12, 2014).

– Court noted that the FCC could broaden the standard of vicarious liability by amending the TCPA through formal notice and comment process. Id.

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Vicarious Liability

• See also . . .

– Kristensen v. Credit Payment Servs., Inc., 2014 WL 6675748 (D. Nev. Nov. 25, 2014): agency principles (actual authority, apparent authority, and ratification) apply to determine whether a defendant can be held vicariously liable for text messages sent by a third party.

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Vicarious Liability

• Agency relationship is created “when one person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.” Doe v. Nestle, S.A., 748 F. Supp. 2d 1057, 1113 (C.D. Cal. 2010), vacated on other grounds, 788 F.3d 1048 (9th Cir. 2013).

• The agent must be subject to the principal’s control with respect to the acts undertaken by the agent. – Independent contractors are not agents because the control

element is lacking.

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Vicarious Liability

• “Apparent agency” exists where the principal engages in

conduct, which, reasonably interpreted, causes a third person to believe that the principal consents to have the in question done on his behalf by the person purporting to act for him.

– “Manifestation” by the principal to the third party is an “essential requirement” of apparent authority. Restatement (Third) of Agency, § 3.03 cmt. b.

– “Apparent authority cannot be established merely by showing that the agent claimed authority or purported to exercise it, but must be established by proof of something said or done by the principal on which a third person relied.” Moreau v. James-River-Otis, Inc., 767 F.2d 6 (1st Cir. 1985).

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Vicarious Liability

• “Ratification” is “the affirmance of a prior act done by another, whereby the act is given effect as if done by an agent acting with actual authority.” Restatement (Third) of Agency, § 4.01(1).

– Principal can ratify an act by (i) manifesting assent to the agent’s actions or (ii) conducting himself in such a manner as to justify a reasonable assumption that he has consented to such actions.

• Like other agency determinations, ratification is highly fact-specific. – For example, in Smith v. State Farm Auto. Ins. Co., -- F. Supp. 2d --, 2014 WL

3906923 (N.D. Ill. Aug. 11, 2014), the court held that consumers failed to plead that the insurance company-defendants were liable for TCPA violations under a ratification theory. Specifically, the plaintiffs did not allege that the non-party lead generator provided any leads to the defendants or their insurance agents stemming from the lead generator’s telemarketing calls to the plaintiffs; nor did the plaintiffs allege any facts supporting an inference that the defendants knowingly accepted a benefit from the lead generator’s calls to the plaintiffs.

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Vicarious Liability

• But application of the 2013 FCC Order to faxes is unresolved. – Cin-Q Autos., Inc. v. Buccaneers Ltd. P’Ship, 2014 WL 7224943

(M.D. Fla. Dec. 17, 2014): rejected plaintiff’s argument that an entity is a per se “sender” under the TCPA merely because its goods/services are advertised in the faxes at issue (to accept that argument would give rise to “sabotage liability”).

• However, “vicarious liability through common law agency is not required for an entity to be held directly liable under the TCPA. . . . The Court is . . . left only to conclude that “on whose behalf” is a standard lying somewhere in the middle – more forgiving than a blanket application of per se liability but somewhat more stringent than vicarious liability through common law agency. . . . [D]irect liability [is] established through a totality test based loosely on agency principles, aimed at establishing the origin of the offending behavior.”

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Vicarious Liability

• See also . . .

– City Select Auto Sales, Inc. v. David Randall Assocs., Inc., 2014 WL 4755487 (D.N.J. Sept. 24, 2014) (Simandle, C.J.): the court detailed other courts’ treatments of the 2013 FCC Order’s applicability to the junk fax provisions of the TCPA.

• FCC amicus letter dated July 17, 2014 - the DISH Network ruling “applies only to liability for telemarketing calls and neither addresses nor alters the [FCC's] pre-existing regulatory treatment of unsolicited facsimile advertisements.”

• Because DISH Network solely concerned telemarketing calls, the FCC specifically stated that it “had no occasion to opine on direct or vicarious liability” in the context of such facsimile transmissions.

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Autodialer Issues

Matt Loker

Hot TCPA Issues

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What is an Autodialer?

“Automatic telephone dialing system” (ATDS) means equipment which has the capacity:

(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and

(B) to dial such numbers.

47 U.S.C. § 227(a)(1); 47 C.F.R. § 64.1200(f)(2)

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FCC Rulings

An ATDS encompasses hardware that “when paired with certain software, has the capacity to store or produce numbers and dial those numbers at random, in sequential order, or from a database of numbers.” FCC’s June 26, 2003 Report and Order ¶ 131.

The “basic function” of an autodialer is the “capacity to dial numbers without human intervention.” FCC’s June 26, 2003 Report and Order ¶ 132.

The FCC “has emphasized that this [ATDS] definition covers any equipment that has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists. FCC’s November 26, 2012 Declaratory Order ¶ 5.

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What is an ATDS?

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• Manual dialing – not covered by the TCPA • Predictive dialing – generally yes

– Uses a complex set of algorithms to automatically dial telephone numbers in a manner that “predicts” the time when a consumer will answer the phone and an agent will be available to take the call.

– FCC’s June 26, 2003 Report and Order, ¶¶ 131-33.

– But FCC petitions challenging this ruling are pending.

What is an ATDS?

• Preview dialing (“click-to-call”) – Allows agent to preview information and manually choose a

telephone number to call by manually clicking a button (rather than 10 digits on a telephone keypad). The system then dials the telephone number.

– Argument is that call requires “human intervention.” – Nelson v. Santander Consumer USA, Inc., 2013 U.S. Dist.

LEXIS 40799, at *27 (W.D. Wis. Mar. 8, 2013) (calls made using preview dialing violated TCPA because equipment still had the capacity to make predictive dialing calls) –vacated by the court by party stipulation on June 7, 2013 (2013 WL 5377280).

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What is an ATDS?

• Holdings Since Nelson – Trend towards requiring “present capacity” for a finding of an ATDS. – Hunt v. 21st Mortgage Co., 2013 WL 5230061 (N.D. Ala. Sept. 17,

2013) (holding that “to meet the TCPA definition of an ‘automatic telephone dialing system,’ a system must have a present capacity, at the time the calls were being made, to store or produce and call numbers from a number generator.” It was irrelevant that software could be added to the system to make automatic dialing possible.

– De Los Santos v. Millward Brown, Inc., 2014 WL 2938605 (S.D. Fla. June 30, 2014). United States submitted a memorandum in the case and argued for a narrow interpretation of the definition of an ATDS, urging the court to require “present capacity” to generate numbers in order for a system to fall within the scope of the TCPA. Court sided with the government and adopted the narrow interpretation.

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Recent ATDS Cases

Dominguez v. Yahoo, Inc., 2014 U.S. Dist. LEXIS 36542 (E.D. Pa. March 20, 2014) (appeal pending before 3rd Circuit) – Prior mobile subscriber had signed up to receive mobile alerts

alerting user that email received to Yahoo account. – In granting motion for summary judgment in favor of Yahoo, court

held there was no ATDS because service did not randomly or sequentially generate numbers, but only sent messages using a queue system when a user received a Yahoo email.

– Since statutory definition was clear, court refused to rely on broader interpretation of ATDS by FCC (i.e., calling telephone numbers from a calling list is sufficient for ATDS purposes).

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Recent ATDS Cases

Sherman v. Yahoo, Inc., 2014 U.S. District LEXIS 13286 (S.D. Cal. Feb. 3, 2014) – Plaintiff received notification from Yahoo on his mobile phone that a

third party was sending him an instant message via Yahoo’s Messenger service.

– Yahoo argued that its equipment did not have the capacity to send messages to random or sequential numbers.

– Plaintiff argued that the system could dial all phone numbers by writing new software code, and therefore had the capacity to dial telephone numbers sequentially from a list of numbers.

– Yahoo’s motion for summary judgment denied due to genuine issue of material fact.

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Recent ATDS Cases

Johnson v. Yahoo, Inc., No. 14-02028, (N.D. Ill. Dec. 11, 2014) – In considering Yahoo’s messenger to SMS service, court agreed

with Yahoo that the FCC’s interpretation of ATDS “conflicts” with the statute’s requirement that the system uses a “random or sequential number generator” but nonetheless held that the TCPA and Hobbs Act “bind me to the FCC’s interpretation.” Rejected Yahoo’s argument that court should apply Chevron deference, and adhere to statute’s plain language.

– Denies Yahoo’s MSJ, holding that plaintiff raised genuine issue of fact suggesting that when messenger app is paired with certain databases, the system has the capacity to dial numbers from a database without human intervention.

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Recent ATDS Cases

Marks v. Crunch San Diego, LLC, No. 14-CV-00348-BAS-BLM, 2014 WL 5422976 (S.D. Cal. Oct. 23, 2014) – Granted summary judgment on ATDS issue and held that third

party platform used to send text messages did not contain random or sequential number generator.

– Held reference to 2008 ruling on ATDS definition violated Chevron deference and read “random or sequential number generator” out of the statute.

– Held that equipment required human intervention as third party dialing platform explicitly banned inputting numbers into its system without either a response to a call to action or “written consent.”

– Implied that only present, not potential capacity is relevant.

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Recent ATDS Cases

Glauser v. GroupMe, No. 11-2584, (N.D. Cal. Feb. 4, 2015) – “[R]elevant inquiry under the TCPA is whether a defendant’s

equipment has the present capacity to perform autodialing functions, even if those functions were not actually used.”

– Defers to FCC’s expansive definition of ATDS (including that predictive dialers are an ATDS) and states that “while the capacity for random/sequential dialing is not required for TCPA liability, the capacity to dial numbers without human intervention is required.”

– Holds that platform for sending group text messages was not an ATDS because text messages were sent with human intervention. Text messages were either sent by group members themselves, and merely routed through defendant’s application, or triggered by the group creator’s addition of plaintiff to the group.

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Plaintiffs’ Perspectives on TCPA cases

Matt Loker

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Defendants’ Perspectives on TCPA cases Christine Reilly

Tom Cunningham

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Questions & Answers

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Panelists’ Bios

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Tom Cunningham Locke Lord LLP (tcunningham@lockelord.com)

• Thomas Cunningham is Co-Chair of the Firm's litigation department, the leader of the Firm's class action practice group and a former member of the Firm's Executive Committee. He also leads the Firm's food & beverage industry group.

• He focuses his practice on the representation of clients in consumer-related class action litigation in both state and federal courts. Mr. Cunningham frequently engages in litigation involving consumer fraud and cases based on a myriad of state and federal consumer protection statutes. He has tried dozens of cases and has argued on numerous occasions before the Illinois Appellate Court and United States Court of Appeals for the Seventh Circuit.

• Mr. Cunningham represents some of the nation’s largest companies in responding to class action litigation pursuant to the Telephone Consumer Protection Act. He has obtained orders of dismissal in a number of TCPA cases and resolved others on a class-wide basis. He frequently publishes and speaks on topics related to the TCPA.

• A significant portion of Mr. Cunningham's practice is devoted to defending companies who deal with consumers in a variety of industries, including banking and financial services, retail, food and beverage, alarm service and home automation, and others.

• Mr. Cunningham represents clients in class action litigation involving allegations that consumers have been misled or deceived by claims about a company’s products and services. He has substantial experience litigating class claims brought pursuant to state consumer protection statutes such as California’s Unfair Competition Law, California’s False Advertising Law and similar statutes.

• Mr. Cunningham regularly represents consumer lenders, loan servicers, trustees and others in class actions and individual cases brought pursuant to a variety of state and federal consumer protection statutes, including the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Equal Credit Opportunity Act (ECOA), various state consumer fraud acts, and other statutes. Mr. Cunningham has defended banks and financial institutions in numerous national class action cases in courts across the country.

• Mr. Cunningham is well-versed in the myriad of state and federal laws that apply to data breaches. He has significant experience in leading teams in forensic examinations and the development of litigation plans to effectively deal with data breach litigation, both in the courtroom and in the court of public opinion.

• Mr. Cunningham earned a Bachelor of Science from Arizona State University, and his J.D. from DePaul University College of Law.

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Matt Loker Kazerouni Law Group (ml@kazlg.com)

• Matthew was born in Cincinnati, Ohio. He earned his undergraduate degree from the University of Toledo where he received a Bachelor of Arts in Law and Social Thought with a concentration in Spanish. While attending California Western School of Law, Matthew served as President of the Entertainment & Sports Law Society and Vice President of the Alternative Dispute Resolution Society and earned various awards such as the Academic Achievement Award and the Telecommunications Award.

• Matthew joined Kazerouni Law Group, APC in 2011 and served in an of-counsel capacity to the firm. In March of 2013, Kazerouni Law Group APC took on Matthew as a full time associate. Matthew has been an instrumental litigation attorney on Consumer Rights cases.

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Christine M. Reilly Manatt, Phelps & Phillips, LLP (creilly@manatt.com)

• Christine M. Reilly is a partner in Manatt’s Litigation Group and Co-Chair of the firm’s TCPA Compliance and Class Action Defense Group. She is a trial lawyer representing clients in major litigation in a wide variety of areas, including consumer protection, unfair competition, false and deceptive advertising, business torts, and entertainment and intellectual property. Ms. Reilly regularly defends clients in consumer protection class actions and investigations and proceedings initiated by the Federal Trade Commission, Federal Communications Commission, and other federal and state government and regulatory agencies.

• In addition to her litigation practice, Ms. Reilly regularly counsels clients on marketing and advertising issues and compliance with consumer laws. She has represented companies in a variety of industries and service sectors, wireless/mobile, Internet, lead generation, manufacturing and electrical, software, telecommunications, television, music and entertainment, legal services, automotive parts and services, dietary supplement, food, and health and beauty.

• Ms. Reilly serves as the Discussion Leader for the Telephone Consumer Protection Act Defense Forum, LinkedIn.

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Kurt A. Schroeder Federal Communications Commission (Kurt.Schroeder@fcc.gov)

• Kurt A. Schroeder serves as Chief of the FCC's Consumer Policy Division, a position he has held since January 2012.

• Mr. Schroeder previously held various management and attorney positions in the Commission's Consumer and Governmental Affairs Bureau, Enforcement Bureau, and Common Carrier Bureau.

• Prior to joining the FCC staff in 1989, Mr. Schroeder served as a law clerk with the Supreme Court of Iowa.

• He is a graduate of the University of Iowa College of Law and Grinnell College.

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Special Thanks to:

Jennifer Rodden (Catholic University Columbus School of Law, JD 2015),

Law Clerk, Kelley Drye & Warren LLP

For Her Invaluable Assistance Preparing this Presentation

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