©2015 Foley & Lardner LLP Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative of

©2015 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500

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2015 Knowledge Symposium

Michael C. Lueder

National Council of Higher Education Resources

©2015 Foley & Lardner LLP 2

Congressional & FCC View of Robocalls

“Computerized calls are the scourge of modern civilization. They wake us up in the morning; they interrupt our dinner at night; they force the sick and elderly out of bed; they hound us until we want to rip the telephone right out of the wall.”Ernest Hallings, 137 Cong. Rec. 30,821-22 (1991)“I detest robocalls.” Jessica Rosenworcel, FCC Commissioner (2015)

©2015 Foley & Lardner LLP

TCPA Cases

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WebRecon LLC Report

14 16 39

354

8301102

1903

2518

2007 2008 2009 2010 2011 2012 2013 2014


The FCC’s 2015 Declaratory Ruling

■On July 10, 2015, the FCC released its Omnibus Declaratory Ruling and Order in response to 21 petitions regarding the definition of an automatic telephone dialing system, liability for calls to reassigned numbers and revocation of consent.


Automatic Telephone Dialing System


Scary Case■ Sherman v. Yahoo (S.D. Cal. July 2014)

Facts Texts sent automatically, but parties disputed

capacity to randomly or sequentially dial numbers Yahoo rep testified that it could be modified to dial

in such a manner Holding: both present and future capacity is relevant

to ATDS determination Rejects “present capacity” standard adopted by

other courts This was a minority opinion that relies on

questionable interpretations of Ninth Circuit rulings Post Script: Class not certified because plaintiffs

lacked an administratively feasible way to identify class members.


2015 FCC Definition of ATDS■All predictive dialers are ATDS. ¶ 10.■A machine that has the capacity to dial

thousands of numbers in a short period of time is an ATDS. ¶ 17. (Key defense definition)

■Equipment that has the capacity to dial numbers without human intervention is an ATDS. ¶¶ 14, 17. (Key defense definition)

■The human intervention required to take a piece of equipment out of the definition of an ATDS will be determined on a case-by-case basis. ¶ 17.

■Equipment can be an ATDS even if it is not presently used for that purpose. ¶¶ 10, 15.


Definition of ATDSCapacity is not limited to the equipment’s current configuration, but includes potential functionality. ¶ 16.■FCC rejected argument that ATDS

must have capacity to dial without human intervention.

■There must be more than a theoretical potential that the equipment could be modified to satisfy the ATDS definition.

■So what is not an ATDS?


Sanctuary!


Definition of ATDS■It might be theoretically possible to

modify a rotary-dial telephone to such an extreme that it would satisfy the definition of an ATDS, but that possibility is too attenuated for FCC to find that a rotary phone has the requisite capacity.

¶ 18.


Definition of ATDS■Stadium analogy. Dissenter noted

that the majority reading of capacity was flawed in the same way as saying an 80,000 seat stadium has the capacity to hold 104,000. ¶ 16.


Definition of ATDS■FCC rejected the analogy saying that

adding space to accommodate 25% more people is a mere theoretical modification that is insufficient to sweep it into the FCC’s interpretation of “capacity.” ¶ 16.


Definition of ATDS – Smart Phones

■The FCC definition of ATDS could include smart phones.

■FCC position: Not to worry; no lawsuits filed; “no evidence that friends, relatives, and companies with which consumers do business find those calls unwanted or take action against the calling consumer.”

■FCC will monitor consumer complaints.


Definition of ATDS

■Dissenter Ajit Pai: Jim meets Jane at a party. The next day, he wants to follow up on their conversation and ask her out to lunch. He gets her cellphone number from a mutual friend and texts her from his smartphone. Pursuant to the order, Jim has violated the TCPA, and Jane could sue him for $500 in statutory damages.


Appeal of FCC 2015 Order■Did the Declaratory Ruling and Order exceed

the FCC’s statutory authority?■What is an automatic telephone dialing

system?■Briefing to be completed on February 19,

2016 ■Panel: Janice Rogers Brown ( President

George W. Bush appointee), Sri Srinivasan (President Obama appointee), Robert Wilkins (President Obama appointee)

■ACA International v. FCC, et al., Case No. 15-1211 (D.D.C.)


Humble Predictions■ Court will find FCC’s autodialer interpretation to

be the most troubling part of its order.■ The FCC definition is not grounded in the

language of the TCPA. ■ The FCC has eliminated the statutory

requirement that an ATDS must use a “random or sequential number generator.”

■ No FCC policy arguments should be permitted because the language of the statute is clear.

■ The FCC use of the work “capacity” was strained. A normal person would not define capacity the way the FCC did.


Humble Predictions

■Court will grant some relief on definition of dialer issue – but that is likely it!


ATDS Decisions Post FCC 2015 Order—Human Intervention

■Equipment with the capacity to store numbers and dial them from the database is an automatic telephone dialing system. It is irrelevant that humans are involved in the process of creating the list of numbers to be called.

■A machine that automatically dials telephone numbers from a pre-programmed list is an automatic telephone dialing system.

■The fact that a human being submits the numbers in a pre-determined list and order to be called is not sufficient to overcome the ATDS determination.

Schumacher v. Credit Protection Association, 2015 U.S. Dist. LEXIS 132752 (S.D. Ind.)


ATDS Decisions Post FCC 2015 Order Order—Human Intervention

■The Sapphire Gentlemen’s Club sends promotional messages to customers. Doing so involved multiple steps. First, a club employee inputs telephone numbers into a mobile marketing website. Second, the club employee types the messages, content, and designates specific phone numbers to which the messaging would be sent. Next, he clicks Send on the website in order to deliver the message in real time or at some future date.


ATDS Decisions Post FCC 2015 Order Order—Human Intervention

■This was enough “human intervention” to carry the day for the club.

■This is going to be an outlier case, but use it in your TCPA defense.

Luna v. SHAC, LLC, N.C. 14-00607 (N.D. Cal.)


Reassigned Numbers


Reassigned Wireless Telephone Numbers

Many petitioners sought clarification of the rules regarding calls made to a number that had been reassigned to one who had not provided consent.

Petitioners argued that such calls should be treated as ones made with consent because the intended recipient of the call had provided it. Petitioners conceded that once they learned the number had been reassigned, they had to stop calling.

The FCC rejected the petitioner’s arguments and took a hard line.

“Calls to reassigned wireless numbers violate the TCPA when a previous subscriber, not the current subscriber or customary user, provided the prior express content on which the call is based”




■ Single caller rule – a single caller gets one free pass. A caller is defined to include company affiliates and subsidiaries. The one free pass rule is one liability free call after a call has been reassigned. ¶72 n. 261. ¶89

■ Caller must show it had no knowledge of the reassignment and had a reasonable basis to believe it had consent. ¶72

■ The one call does not need to connect to a person or voicemail. “If this one additional call does not yield actual knowledge of reassignment, we deem the caller to have constructive knowledge of such.” ¶¶ 72, 73.

■ A party could purposely and unreasonably fail to notify you that a person is no longer at that number and simply accrue statutory penalties. ¶ 95.



FCC ideas about how to obtain knowledge of reassignment:■ The called party informs the caller of the number

reassignment. ¶ 82, n. 293, ¶ 83.■ The caller makes manually dialed calls to confirm identity.■ The name on the voicemail is different from the intended

recipients.■ The caller hears a tone indicating the number is no longer in

service.■ The caller sends an email or mail request to confirm telephone

numbers or update contact information.■ The caller acquires a paid database which reports numbers as

having a high probability of reassignment.■ The wireless carrier reports that the number is no longer in

service or has been reassigned. ■ The caller provides an opt-out mechanism on prerecorded calls

so that recipients can report a reassigned or wrong number.



■The caller requires customers via contract to notify the caller when they switch numbers.

■The caller can sue its customer if they cause the caller liability. (HA! HA! HA!)


Reassigned Wireless Telephone Numbers – What Can You Do?

■ Include an interactive opt-out mechanism in all artificial and prerecorded voice call so recipients may easily report a reassigned or wrong number.

■ Implement procedures for recording wrong numbers/reassigned numbers.

■ Implement processes to allow customer service agents to record new telephone numbers when receiving calls from customers.

■ Periodically send an email or mail request to the customer to update contact information.

■ Utilize an ATDS’s or live callers ability to recognize “triple-tones” that identify and record disconnected numbers.

■ Establish policies for determining whether a number has been reassigned if there has been no response to a call after a period of attempting to contact the customer.

■ Enable customers to update contact information by responding to any text message they receive.


Who is the Called Party?

■The TCPA requires the consent not of the intended recipient of the call, but of the current subscriber or customary user of the telephone. ¶ 72.


Who is a Called Party?■ Mark Leyse sued under the TCPA after receiving a pre-

recorded telemarketing call on the landline he shared with his roommate. Leyse was not the intended recipient of the call. His roommate was.

■ The court concluded that Leyse had standing to sue because of his status as a regular user of the phone line and an occupant of the residence that was called.

■ Anyone within the “zone of interest” protected by statute may state a claim.

■ The court noted that the caller may invoke the consent of the “called party” as a defense even if the plaintiff is someone other than the “called party.” If the roommate had given consent to receive robo calls from the Bank of America, Leyse’s suit would be blocked.

Leyse v. Bank of Am. Nat’l Ass’n, 2015 U.S.App. LEXIS 17840 (3rd Cir.)


Revocation of Consent



■Customer may revoke at any time via any “reasonable means.” ¶ 47, ¶ 55.

■A caller may not control the manner in which revocation may occur. ¶ 47, 64.

■Porting number from a wireline service to a wireless service does not revoke consent. ¶ 54.

■No guidance provided about unreasonable means.

■“A customer may revoke consent in any manner that clearly expresses a desire not to receive future messages.” ¶ 63.



FCC ideas on methods of revocation:

Customer-initiated call.

Directly in response to a call initiated or made by a caller.

At an in-store bill payment location. ¶64.


Revocation of Consent■The best way to handle revocation

problems is to maintain proper business records which track consent.

■Proving oral consent is difficult and documenting such consent in a call record can result in a fact dispute. The answer is to record your calls.

■Establish and enforce a policy that all revocations are tracked and recorded.

■Maintain records regarding source, method and date of revocation.


Revocation of ConsentQuery – How is the Eleventh Circuit’s ruling in Osario impacted by the FCC rule.■“In the absence of any contractual

restrictions to the contrary, [plaintiffs] were free to orally revoke any consent previously given to State Farm to call No. 8626 in connection with [plaintiff’s] credit-card debt.” Osario v. State Farm Bank F.S.B., 746 F. 3d 1242 (11th Cir. 2014)

■State in your contracts what you consider to be reasonable methods of revocation. Can’t hurt; might help.


Revocation of Consent■A material issue of fact on revocation was

created when plaintiff hung up on defendants multiple times and told its collection agent that she did not have income.

■That her husband was locked up.■That she felt harassed.■That she would make a payment when she

could.■That she would call back to make

arrangements.Brown v. Credit Management-LP, 2015 U.S. Dist. LEXIS 1233-53 (N.D. Ga.)



■Proof problems: FCC does not believe that a “he said, she said” problem is created though its finding on revocation.



■“The well-established evidentiary value of business records means that callers have reasonable ways to carry their burden of proving consent. We expect that responsible callers will maintain proper business records tracking consent.” ¶ 70.

■This quote shows the FCC does not understand how real world litigation operates.


Good Faith Defense■A Time Warner Cable customer upgraded his account

and requested a service call to his home the next day. Time Warner Cable sent reminder notices to a number it had on file, even though the number had been transferred to a third party. The third party sued.

■The Court ruled that there was no TCPA violation for a call because Time Warner believed “in good faith” that it had consent to call and that the call was being made for a service the customer had requested.

■This will be a minority ruling, but use it in your cases!

Danehy v. Time Warner Cable Enterprise LLC, 2015 U.S. Dist. LEXIS 125043 (E.D.N.C.)


Federal Contractor TCPA Liability

■Campbell-Ewald Company v. Gomez, No. 14-8578 (U.S. Supreme Court) (Is petitioner entitled to derivative sovereign immunity from respondents’ suit because respondents’ claims arose out of petitioner’s performance of a contract with the federal government?)

■Broadnet Teleservices, LLC Petition for Declaratory Policy, CG Docket No. 02-278 (Seeks ruling that the TCPA does not apply to calls made by or on behalf of federal, state, and local governments when such calls are made for official purposes.)

■NCHER letter to FCC.


Michael Lueder777 E. Wisconsin AveMilwaukee, WI 53202 (414) 297-5643 [email protected]

mailto:[email protected]

Documents

©2015 Foley & Lardner LLP Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative of