New Telephone Consumer Protection Act: Boon or Bane to Your Company?

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The Telephone Consumer Protection Act (TCPA) is a major litigation risk for companies, hospitals, and health care providers who use text messages, artificial or pre-recorded voice messages and other automated dialing technologies to reach customers and patients. Hundreds of class action lawsuits have been filed in recent years seeking damages that amount to millions of dollars in TCPA violations, with the largest TCPA settlement to date reaching upwards of $32 million. New regulations remove key exemptions that previously served as safeguards against TCPA liability. In response, companies need to revise their practices, andhospitals and health care providers need to revise hospital admission forms, to avoid liability and potentially catastrophic penalties under the TCPA.

The Federal Communications Commission (FCC) final regulations requiring prior express written consent for autodialed telemarketing calls to cell phones and pre-recorded telemarketing messages under the TCPA went into effect on October 16, 2013.

With these latest FCC actions in mind, telecommunication companies, mobile engagement providers, mobile marketers as well as any company that engages in mobile marketing campaigns face considerable challenges in creating and implementing effective TCPA compliance guidelines and TCPA compliant marketing programs.

In a two-hour live webcast, the Knowledge Group is assembling a panel of distinguished thought leaders and practitioners to help companies who engage in mobile marketing and various other types of mobile communications understand new compliance guidelines to prevent their businesses from falling into the pitfalls of FCC actions and the extremely costly class action litigation.

Some of the key areas addressed in this webcast:

TCPA: an Overview of New Regulations
What Calls Are Affected?
What Is an Automatic Telephone Dialing System?
What Is Express Written Consent?
What If There Is an Existing Business Relationship?
Are There Any Exceptions?
What Are the Penalties for Noncompliance?
New Regulations Already in Effect
Compliance and Best Practices
TCPA Litigation Trends and Risks
Up-to-Minute Regulatory Updates

To view this webcast go to this link : http://youtu.be/6pveW_X1d8k

To learn more about the webcast please visit our website: http://theknowledgegroup.org/

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New Telephone Consumer Protection Act: Boon or Bane to Your Company?

  1. 1. Speaker Firms and Organization: Vinson & Elkins LLP Jason A. Levine Partner Perkins Coie LLP Debra R. Bernard Partner Troutman Sanders LLP Chad R. Fuller Partner Hall, Render, Killian, Heath & Lyman, P.C. Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C. Joshua P. Reading Attorney Thank you for logging into today’s event. Please note we are in standby mode. All Microphones will be muted until the event starts. We will be back with speaker instructions @ 11:55am. Any Questions? Please email: Info@knowledgecongress.org Group Registration Policy Please note ALL participants must be registered or they will not be able to access the event. If you have more than one person from your company attending, you must fill out the group registration form. We reserve the right to disconnect any unauthorized users from this event and to deny violators admission to future events. To obtain a group registration please send a note to info@knowledgecongress.org or call 646.202.9344. Presented By: March 12, 2014 1 Partner Firms:
  2. 2. March 12, 2014 2  If you experience any technical difficulties during today’s WebEx session, please contact our Technical Support @ 866-779-3239.  You may ask a question at anytime throughout the presentation today via the chat window on the lower right hand side of your screen. Questions will be aggregated and addressed during the Q&A segment.  Please note, this call is being recorded for playback purposes.  If anyone was unable to log in to the online webcast and needs to download a copy of the PowerPoint presentation for today’s event, please send an email to: info@knowledgecongress.org. If you’re already logged in to the online webcast, we will post a link to download the files shortly.  If you are listening on a laptop, you may need to use headphones as some laptops speakers are not sufficiently amplified enough to hear the presentations. If you do not have headphones and cannot hear the webcast send an email to info@knowledgecongress.org and we will send you the dial in phone number.
  3. 3. March 12, 2014 3  About an hour or so after the event, you'll be sent a survey via email asking you for your feedback on your experience with this event today - it's designed to take less than two minutes to complete, and it helps us to understand how to wisely invest your time in future events. Your feedback is greatly appreciated. If you are applying for continuing education credit, completions of the surveys are mandatory as per your state boards and bars. 6 secret words (3 for each credit hour) will be given throughout the presentation. We will ask you to fill these words into the survey as proof of your attendance. Please stay tuned for the secret word.  Speakers, I will be giving out the secret words at randomly selected times. I may have to break into your presentation briefly to read the secret word. Pardon the interruption.
  4. 4. March 12, 2014 4 Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You: FREE UNLIMITED: This program is free of charge with no further costs or obligations. It includes:  Unlimited access to over 15,000 pages of course material from all Knowledge Group Webcasts.  Subscribers to this program can download any slides, white papers, or supplemental material covered during all live webcasts.  50% discount for purchase of all Live webcasts and downloaded recordings. PAID UNLIMITED: Our most comprehensive and cost-effective plan, for a one-time fee:  Access to all LIVE Webcasts (Normally $199 to $349 for each event without a subscription). Including: Bring-a-Friend – Invite a client or associate outside your firm to attend for FREE. Sign up for as many webcasts as you wish.  Access to all of Recorded/Archived Events & Course Material includes 1,500+ hours of audio material (Normally $299 for each event without a subscription).  Free CLE/CPE/CE Processing (Normally $49 Per Course without a subscription).  Access to over 15,000 pages of course material from Knowledge Group Webcasts.  Ability to invite a guest of your choice to attend any live webcast Free of charge (Exclusive benefit only available for PAID UNLIMITED subscribers).  6 Month Subscription is $299 with No Additional Fees Other options are available.  Special Offer: Sign up today and add 2 of your colleagues to your plan for free Check the “Triple Play” box on the sign-up sheet contained in the link below. https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
  5. 5. March 12, 2014 5 Knowledge Group UNLIMITED PAID Subscription Programs Pricing: Individual Subscription Fees: (2 Options) Semi-Annual: $299 one-time fee for a 6 month subscription with unlimited access to all webcasts, recordings, and materials. Annual: $499 one-time fee for a 12 month unlimited subscription with unlimited access to all webcasts, recordings, and materials. Group plans are available. See the registration form for details. Best ways to sign up: 1.Fill out the sign up form attached to the post conference survey email. 2.Sign up online by clicking the link contained in the post conference survey email. 3. Click the link below or the one we just posted in the chat window to the right. https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964 Discounts: Enroll today and you will be eligible for the “Triple Play” program and 3% off if you pay by credit card. Also we will waive the $49 CLE/CPE processing fee for today’s conference. See the form attached to the post conference survey email for details. Questions: Send an email to: info@knowledgecongress.org with “Unlimited” in the subject.
  6. 6. Partner Firms: March 12, 2014 6 With more than 900 lawyers in 19 offices across the United States and Asia, Perkins Coie is a leading international law firm that represents great companies across all industries and stages of growth—from start-ups to FORTUNE 50 companies. Perkins Coie's over 100-year tradition of partnering with our clients to build great companies has earned our firm the privilege of representing industry-leading clients such as Amazon.com, Microsoft, Boeing, Intel, Google, Starbucks and Honeywell, to name just a few. For almost a century, Vinson & Elkins lawyers have provided innovative business solutions for clients whose needs are as diverse as the entities they represent. In today's challenging environment of global markets, volatile economies, and complex human and environmental issues, our law firm's time-tested role as trusted advisor has become even more critical. The depth and breadth of V&E lawyers' experience, combined with the responsiveness and efficiencies of the firm's global reach, enables Vinson & Elkins to serve clients from start-up, to the negotiating table and boardroom, before legislative and regulatory bodies, in the courtroom, and beyond.
  7. 7. Partner Firms: March 12, 2014 7 Troutman Sanders LLP is an international law firm with more than 600 lawyers and offices located throughout North America and Asia. Founded in 1897, the firm’s lawyers provide counsel and advice in practically every aspect of civil and commercial law related to the firm’s core practice areas: Corporate, Energy and Industry Regulation, Finance, Litigation and Real Estate. Firm clients range from multinational corporations to individual entrepreneurs, federal and state agencies to foreign governments, and non- profit organizations to businesses representing virtually every sector and industry. See troutmansanders.com for more information. Hall, Render, Killian, Heath & Lyman is a national health law firm with offices in Indiana, Kentucky, Michigan and Wisconsin. The firm provides organizations in the highly regulated health care industry with full service legal representation. With more than 160 attorneys, Hall Render represents over 500 health care organizations, including hospitals and health systems, physician practices, life sciences firms and nonprofit organizations. Hall Render focuses its practice in health law and is recognized as one of the nation's preeminent health law firms. Learn more at www.hallrender.com.
  8. 8. Brief Speaker Bios: Jason A. Levine Jason A. Levine is a litigation partner in the Washington, D.C. office of Vinson & Elkins LLP. A versatile courtroom lawyer for over 15 years, Jason represents clients in their most important business disputes and has tried 10 complex cases to juries and the bench. He defends against class actions and serves as lead counsel in cases involving contracts, business torts, antitrust claims, and e- commerce statutes including the Telephone Consumer Protection Act. A noted authority on high-tech litigation risks, Jason has been recognized as a Washington, D.C.Super Lawyer, as a "Future Star" by Benchmark Litigation, and by Lawdragon magazine as among the top 3,000 attorneys in the United States. Jason received his J.D. in 1994 from Harvard Law School, and his B.A. in 1991 from Brandeis University. March 12, 2014 8 Debra R. Bernard Debra is a seasoned litigator whose practice encompasses the litigation, arbitration and mediation of all types of intellectual property claims including Lanham Act actions, trademark infringement, trade dress infringement, misappropriation of trade secrets, copyright infringement, patent infringement, right of publicity as well as general commercial litigation claims. Debra also has experience in the litigation and arbitration of Telephone Consumer Protection Act (TCPA) class actions and advises clients on TCPA compliance issues. Additionally, Debra advises clients on litigation readiness and ediscovery protocols, serves as an active member of the Seventh Circuit E-Discovery Pilot Program Committee and is an adjunct professor at Chicago-Kent Law School.
  9. 9. Brief Speaker Bios: Chad R. Fuller Chad is a partner in the financial services litigation practice of Troutman Sanders LLP, where he focuses on the defense of consumer class actions and general business litigation. Chad has substantial experience defending major consumer class action litigation in cases involving alleged false advertising, product defects, charging for fees and services by a variety of businesses, including computer, software, telecommunications, home warranty, insurance brokerage, and auto finance companies. He is well versed in California’s Unfair Competition Statutes, including Business & Professions Code Section 17200. He has tried cases to verdict before courts and private arbitrators and has substantial experience in mediation. March 12, 2014 9 Lea H. Lockhart Lea Lockhart practices in the area of health care law with a focus on health information technology, general business transactions and services, privacy and security and electronic health records. Prior to joining Hall Render, Lea graduated from Saint Louis University School of Law and earned a Master of Health Administration from Saint Louis University College for Public Health and Social Justice. She completed a fellowship at Saint Louis University Hospital and assisted the hospital in researching business and transactional matters, such as physician arrangements, hospital and physician liability, certification and licensure issues and medical staff matters and credentialing. Lea was also a lead editor for the Saint Louis University Journal of Health Law & Policy and interned at MetroHealth Medical Center in Cleveland, Ohio.
  10. 10. Brief Speaker Bios: Joshua P. Reading Joshua Reading concentrates his practice on health information technology, business transactions and tax/tax exemption, with a focus on helping clients in the negotiation and acquisition of a variety of technology and services products. He also assists clients with matters concerning foundations and support organizations, governance consulting, physician alignment and physician group practices. Joshua graduated magna cum laude from Indiana University Maurer School of Law and is a member of the Indianapolis Bar Association, the Indiana State Bar Association and the American Health Lawyers Association. March 12, 2014 10 ► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/new-telephone-consumer-protection-act-boon-or-bane-to-your-company-live-webcast/
  11. 11. The Telephone Consumer Protection Act (TCPA) is a major litigation risk for companies, hospitals, and health care providers who use text messages, artificial or pre-recorded voice messages and other automated dialing technologies to reach customers and patients. Hundreds of class action lawsuits have been filed in recent years seeking damages that amount to millions of dollars in TCPA violations, with the largest TCPA settlement to date reaching upwards of $32 million. New regulations remove key exemptions that previously served as safeguards against TCPA liability. In response, companies need to revise their practices, andhospitals and health care providers need to revise hospital admission forms, to avoid liability and potentially catastrophic penalties under the TCPA. The Federal Communications Commission (FCC) final regulations requiring prior express written consent for autodialed telemarketing calls to cell phones and pre-recorded telemarketing messages under the TCPA went into effect on October 16, 2013. March 12, 2014 11
  12. 12. With these latest FCC actions in mind, telecommunication companies, mobile engagement providers, mobile marketers as well as any company that engages in mobile marketing campaigns face considerable challenges in creating and implementing effective TCPA compliance guidelines and TCPA compliant marketing programs. In a two-hour live webcast, the Knowledge Group is assembling a panel of distinguished thought leaders and practitioners to help companies who engage in mobile marketing and various other types of mobile communications understand new compliance guidelines to prevent their businesses from falling into the pitfalls of FCC actions and the extremely costly class action litigation. Some of the key areas addressed in this webcast: • TCPA: an Overview of New Regulations • What Calls Are Affected? • What Is an Automatic Telephone Dialing System? • What Is Express Written Consent? • What If There Is an Existing Business Relationship? • Are There Any Exceptions? • What Are the Penalties for Noncompliance? • New Regulations Already in Effect • Compliance and Best Practices • TCPA Litigation Trends and Risks • Up-to-Minute Regulatory Updates March 12, 2014 12
  13. 13. Featured Speakers: March 12, 2014 13 SEGMENT 1: Debra R. Bernard Litigation Partner, Co-Chair E-Discovery Services & Strategy Group Perkins Coie LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  14. 14. Introduction Jason A. Levine is a litigation partner in the Washington, D.C. office of Vinson & Elkins LLP. A versatile courtroom lawyer for over 15 years, Jason represents clients in their most important business disputes and has tried 10 complex cases to juries and the bench. He defends against class actions and serves as lead counsel in cases involving contracts, business torts, antitrust claims, and e-commerce statutes including the Telephone Consumer Protection Act. A noted authority on high-tech litigation risks, Jason has been recognized as a Washington, D.C.Super Lawyer, as a "Future Star" by Benchmark Litigation, and by Lawdragon magazine as among the top 3,000 attorneys in the United States. Jason received his J.D. in 1994 from Harvard Law School, and his B.A. in 1991 from Brandeis University. March 12, 2014 14 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  15. 15. TCPA Litigation: Overview and Dangers Jason A. Levine Partner Vinson & Elkins LLP Washington, D.C. (202) 639-6755 jlevine@velaw.com March 12, 2014 15 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  16. 16. Perspectives on the TCPA “The TCPA has become a juggernaut: a destructive force that threatens companies with annihilation for technical violations that cause no actual injury or harm to any consumer” -- U.S. Chamber Institute for Legal Reform, Oct. 2013 “Because plaintiffs may enforce the statute via class action and because a single advertisement is often faxed to hundreds—if not thousands—of phone numbers, suits under the [TCPA] present lucrative opportunities for plaintiffs’ firms” -- Reliable Money Order, Inc. v. McKnight Sales Co., Inc. (7th Cir. 2013) “How to Make A Telemarketer Cry (or, Suing Bozos for Fun & Profit)” -- http://www.panix.com/~eck/telemarket.html (Oct. 15, 2013) March 12, 2014 16 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  17. 17. Contents  TCPA Primer and Quick Reference Guide  Introduction to “Consent” Requirement  Top Five Litigation Dangers  Uncapped Statutory Damages and Incentives To Sue  Concurrent Federal-State Jurisdiction  Vicarious Liability  Wrong-Number Liability  Insurance Coverage Confusion  Recent Litigation Statistics  Speaker Biography March 12, 2014 17 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  18. 18. Basic TCPA Primer Telephone Consumer Protection Act of 1991, 42 U.S.C. § 227 Creates private right of action to sue for $500 “per violation” for: calls to mobile phones “using any automatic telephone dialing system or an artificial or recorded voice” unless “for emergency purposes,” no commercial purpose, or with “prior express consent of the called party” calls to land lines “using an artificial or prerecorded voice” unless “for emergency purposes,” no commercial purpose, with the “prior express consent of the called party,” or exempted by the FCC faxes comprising an “unsolicited advertisement” unless with the “prior express consent” of the faxed party States can sue for “patterns or practices” of junk faxing, and the FCC can impose fines of up to $11,000 per violation Damages can be trebled—to $1,500—per “willful or knowing” violation Consent is King! March 12, 2014 18 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  19. 19. “Prior Express Written Consent” As of October 16, 2013, pre-recorded and autodialed calls require “prior express written consent” Requires “an agreement, in writing, bearing the signature of the person called that clearly authorized the seller to deliver or cause to be delivered . . . Advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or pre-recorded voice, and the telephone number to which . . . such . . . Messages [are] to be delivered” The written consent may be obtained electronically Eliminates the “established business relation” exception Opt-out mechanism must be announced and available through the call Likely to spawn additional litigation over consent issues—a gold mine March 12, 2014 19 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  20. 20. Litigation Danger #1: Uncapped Statutory Damages The TCPA sets no upper bound on damages, unlike statutes like the Fair Debt Collection Practices Act Simple multiplication: One promotional text message to 100,000 people who previously used phones to order services = class action claim for $50 million If sent knowing recipients did not expressly consent = class action claim for $150 million Ten daily messages to same recipients over 10-day period = class action clams for $500 million, possibly trebled to $1.5 billion TCPA liability has bankrupted companies March 12, 2014 20 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  21. 21. Incentive To Sue and Settle TCPA Suits Settle for pennies on the dollar? Still costly, and lucrative for plaintiffs’ counsel Rose v. Bank of America (N.D. Cal.)– 7.7 million calls/texts—exposure over $3.5 billion $32 million total; $8 million fee award Arthur v. Sallie Mae (W.D. Wash.)–8 million calls—exposure of $4 billion $24.1 million total; $4.8 million fee award Malta v. Freddie Mac (S.D. Cal.)–5.9 million calls—exposure over $2.9 billion $17 million total; $4.3 million fee award Ira Holtzman, C.P.A. v. Turza (7th Cir. 2013) Upholding $4,215,000 summary judgment award against solo attorney who faxed occasional newsletters to 200 accountants “Even a recipient who gets the fax on a computer and deletes it without printing suffers some loss; the value of the time necessary to realize that the inbox has been cluttered by junk” March 12, 2014 21 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  22. 22. TCPA “Advisors” and Plaintiffs’ Firms TCPA litigation is a new cottage industry, now that plaintiffs’ firms have “discovered” the statute Blogs and websites teach how to induce marketing calls and texts for lawsuits and profit Some explain how to “set up” TCPA lawsuits to maximize damages and negotiate quick settlements Many law firms recruit class representatives for suits based on a single call, text, or fax TCPA “hotbeds”: S.D. Cal. (Los Angeles), N.D. Cal. (San Francisco), S.D. Fla. (Miami), N.D. Ill. (Chicago) March 12, 2014 22 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  23. 23. Litigation Danger #2: Concurrent Federal-State Jurisdiction Original intent of TCPA in 1991: Empower consumers to sue for $500 in small claims court, without needing a lawyer  Federal courts often refused to exercise jurisdiction over TCPA suits Class Action Fairness Act of 2005: State-court class actions seeking over $5 million in damages made removable to federal court Let defendants escape state court TCPA class actions Mims v. Arrow Financial (U.S. Sup. Ct. 2012): “Federal question” jurisdiction extends to TCPA suits Plaintiffs can choose state or federal court; defendants can remove state suits to federal court Concurrent jurisdiction = more courts available for TCPA lawsuits Breeds litigation over federal/state law control of issues in cases March 12, 2014 23 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  24. 24. Litigation Danger #3: Vicarious Liability FCC Order, May 9, 2013: federal common law of agency governs TCPA vicarious liability Provided “helpful” examples that exceed the law of agency Being challenged in court: DISH Network v. FCC (D.C. Cir.) Businesses can be held liable for TCPA violations by agents acting to “benefit” them, even absent specific instructions Mere mention of company’s name in message—even if it did not send or authorize it—suffices for liability if marketer violates TCPA Internal practices and procedures to prevent TCPA violations are irrelevant as to liability based on marketer’s actions Particular danger for companies that outsource marketing—important to demand and monitor for TCPA compliance March 12, 2014 24 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  25. 25. Litigation Danger #4: Wrong-Number Liability A prominent federal court of appeals recently decided what happens when a creditor calls the wrong person accidentally Debt collector called number provided by consenting debtor—but the number had changed hands Seventh Circuit (Easterbrook, J.) held that TCPA requires consent of the called party, not just the intended recipient The Court advised callers to limit liability by manually dialing first call to verify identify, and using reverse lookup to identify current phone number holder -- Soppet v. Enhanced Recovery Co., LLC (7th Cir. 2012) Essentially strict liability for dialing wrong number! March 12, 2014 25 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  26. 26. Litigation Danger #5: Insurance Coverage Unclear TCPA liability may be covered by “advertising injury” policies or provisions on their face But insurers have long argued that TCPA damages are fines or penalties, not covered by “advertising injury” provisions Also, commercial general liability policies typically exclude occurrences arising from distribution of material in violation of a statute Courts are split over whether TCPA damages are insurable Illinois and Missouri Supreme Courts have ruled that TCPA damages are not punitive and thus are insurable Federal courts in Pennsylvania, South Carolina, and Michigan have upheld coverage denials based on exclusions Close review of insurance policies is imperative March 12, 2014 26 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  27. 27. Recent TCPA Class-Action Statistics Class-action statistics from January-June 2013 reveal: 40 TCPA class actions filed—trend is upward 88% alleged nationwide classes, not state-specific Split: texts (37%), faxes (31%), and calls (28%)—all three are vulnerable 88% focused on absence of prior consent as primary theory—this will likely increase given the new FCC regulation Cases cross diverse industries—only 30% of complaints were filed against marketing, financial service, debt collection, and telecommunication companies combined Other industries: retail (8%), pharmaceutical (6%), construction (6%), food (6%), health care (2%), automotive (2%), and political (2%) IT CAN HAPPEN TO YOU! IF IN DOUBT, CONSULT COUNSEL. Source: Gajewski & Zetoony, “Managing Legal Risks: Trends in Mobile, Text Message, and Telephone TCPA Class Action Litigation” (Sept. 2013) March 12, 2014 27 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  28. 28. Additional Biography A versatile trial and appellate lawyer for over 15 years, Jason is a partner in the Washington, D.C. office of Vinson & Elkins LLP., where he represents clients in their most important business litigation. Jason defends against class actions and serves as lead counsel in cases involving contract disputes, fraud, business torts, antitrust, and constitutional claims. Jason has tried 10 substantial jury and non-jury cases and often advises clients on technology-related liability risks, including those posed by the TCPA and by the use of email in business negotiations. Reflecting the diversity of his business litigation practice, within a recent six-month period Jason tried and won a full defense verdict in a $70 million jury trial over an alleged breach of contract, defeated the U.S. Government’s motion to dismiss his client’s claim in a $250 million civil forfeiture case, and secured full payment of his client’s damages in a complex fraud case. Jason has been recognized as a Washington, D.C. Super Lawyer (2012-13), as a "Future Star" by Benchmark Litigation (2012-13), and by Lawdragon as one of the top 3,000 attorneys in the U.S. (2008- 11) and as one of 500 attorneys “carrying the legal profession to new frontiers“ (2006). Jason received his J.D. in 1994 from Harvard Law School (cum laude), and his B.A. in 1991 from Brandeis University (summa cum laude, Phi Beta Kappa). He was a judicial law clerk for (now Chief) Judge Randall Rader on the U.S. Court of Appeals for the Federal Circuit from 1994-95. Contact Jason at (202) 639-6755, or by email at jlevine@velaw.com. March 12, 2014 28 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  29. 29. PROGRAM DISCLAIMER: The content of this presentation is intended for educational and informational purposes only. It does not constitute the provision of legal advice or services by Vinson & Elkins LLP. March 12, 2014 29 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
  30. 30. Introduction Debra is a seasoned litigator whose practice encompasses the litigation, arbitration and mediation of all types of intellectual property claims including Lanham Act actions, trademark infringement, trade dress infringement, misappropriation of trade secrets, copyright infringement, patent infringement, right of publicity as well as general commercial litigation claims. Debra also has experience in the litigation and arbitration of Telephone Consumer Protection Act (TCPA) class actions and advises clients on TCPA compliance issues. Additionally, Debra advises clients on litigation readiness and ediscovery protocols, serves as an active member of the Seventh Circuit E-Discovery Pilot Program Committee and is an adjunct professor at Chicago-Kent Law School. March 12, 2014 30 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP
  31. 31. What is an Automatic Telephone Dialing System (“ATDS”) March 12, 2014 31 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP  The TCPA defines an automatic telephone dialing system to mean “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)
  32. 32. Interpretation of ATDS by the FCC March 12, 2014 32 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP – 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.
  33. 33. Interpretation of ATDS by the Courts March 12, 2014 33 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP  Satterfield v. Simon & Schuster, 569 F.3d 946 (9th Cir. 2009)  a system need not actually store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it.
  34. 34. Interpretation of ATDS by the Courts March 12, 2014 34 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP  Nelson v. Santander Consumer USA, Inc., 2013 U.S. Dist. LEXIS 40799 (W.D. Wis. Mar. 8, 2013)  “Under both the statute and the order, the question is not how the defendant made a particular call, but whether the system it used had the capacity to make automated calls.” (However, this opinion was vacated by agreement of the parties per settlement).  Dobbin v. Wells Fargo Auto Finance, 2011 WL 2446566 (N.D. Ill. June 14, 2011)  Calls manually dialed by desk phones used independently of predictive dialing technology do not satisfy ATDS definition.
  35. 35. Interpretation of ATDS by the Courts March 12, 2014 35 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP  Griffith v. Consumer Portfolio Serv., Inc., 838 F.Supp.2d 723 (N.D. Ill. 2011)  Equipment could be treated as an ATDS if it could be programmed in the future to perform ATDS functions.
  36. 36. Interpretation of ATDS by the Courts March 12, 2014 36 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP  Hunt v. 21st Mortgage Corp., 2013 WL 5230061 (N.D. Ala. Sept. 17, 2013)  “[T]o 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. While a defendant can be liable under §227(b)(1)(A) whenever it has such a system, even if it does not make use of the automatic dialing capability, it cannot be held liable if substantial modification or alteration of the system would be required to reach that capability.”  Gragg v. Orange Cab Co., Inc., 2014 WL 494862 (W.D. Wash. Feb. 7, 2014)  The court analyzed whether the Defendant’s system had “a present, not potential capacity to store, produce, or call randomly or sequentially generated telephone numbers.”
  37. 37. March 12, 2014 37 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on ATDS  Professional Association for Professional Engagement (“PACE”)-October 2013  FCC should define “capacity” as the “current ability to operate or perform an action, when placing a call, without first being modified or technologically altered.”  ACA International-January 2014  FCC should define “capacity” as the present ability
  38. 38. March 12, 2014 38 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on ATDS  Youmail, Inc. –April 2013  FCC should clarify that YouMail’s auto-reply system is not an ATDS , that YouMail does not “initiate” the sending of auto-replies, and that calling parties consent to the receipt of auto- replies.  Glide Talk, Ltd. –October 2013  FCC should confirm that ATDS restriction applies only to equipment that can, at the time of the call, be used to store or generate sequential or randomized telephone numbers; and software and application providers that enable consumers to choose to send invitational text messages to not “make” calls under the TCPA merely by facilitating the ability of their users to send the text messages.
  39. 39. March 12, 2014 39 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petition on ATDS  GroupMe (Skype)—March 2012  defining "capacity" to encompass only equipment that, at the time of use, could, in fact, have autodialed random or sequential numbers without human intervention and without first being technologically altered.
  40. 40. March 12, 2014 40 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on ATDS  Communication Innovators—June 2012  The Commission should clarify that the definition of an autodialer under the TCPA reflects equipment that has a present capacity, such as having the current ability to generate and dial random or sequential numbers without additional modifications to the equipment.  The Commission should not interpret capacity as encompassing any conceivable hardware or software modification to a device that would permit it to generate, store, and dial numbers randomly or in sequence.
  41. 41. March 12, 2014 41 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Importance of Clarifying the term “Capacity”  If the term “capacity” is construed as to include only potential or theoretical capacity—then many ordinary consumer devices such as smartphones and laptop computers would fall within the sweep of the statute--that is because they have the theoretical or potential “capacity” to randomly or sequentially generate numbers and dial them—albeit, with the installation of an appropriate application or software.
  42. 42. March 12, 2014 42 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on Consent  Generally, often attempt to address the difference in consent requirements between landlines and wireless numbers—particularly informational messages.
  43. 43. March 12, 2014 43 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on Consent  GroupMe, Inc. –March 2012  “intermediary consent constitutes ‘prior express consent’ under the TCPA when calls or text messages are non-commercial, administrative or informational”  Glide Talk, Ltd.—October 2013  to the extent that an app provider is considered a "make[ r ]" of a call, the Commission should clarify that the app provider reasonably can rely on any consent to make social communications that the call recipient has provided to the app user.
  44. 44. March 12, 2014 44 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP 1) The consent must be a “signed” writing but the term "signed" includes an electronic or digital form of signature to the extent such form of signature is recognized as a valid signature under applicable federal or state contract laws. Written agreements obtained in compliance with the E-SIGN Act satisfy the requirements, such as agreements obtained via email, website form, text message, telephone keypress, or voice recording; 2) The consent must clearly authorize the seller to deliver or cause to be delivered the marketing message to the telephone number specifically authorized by the signatory; Regulations Effective October 2013 Regarding Consent
  45. 45. March 12, 2014 45 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Regulations Effective October 2013 Regarding Consent 3) The written agreement shall include a clear and conspicuous disclosure informing the person signing that: By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and The person is not required to sign the agreement (directly or indirectly) or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.
  46. 46. March 12, 2014 46 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on Consent  Cargo Airline Ass’n – August 2012  Consent should not be required for informational package delivery notifications to cell phones.  Retail Industry Leaders Ass’n—Dec. 201  Regulations should not apply to isolated, immediate, one-time responses to consumer-initiated requests for text offers (“on demand text offers” or “on demand texts”).
  47. 47. March 12, 2014 47 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Pending FCC Petitions on Miscellaneous Issues  ccAdvertising and Revolution Messaging—January 2012  Internet-to-phone text messaging  Coalition of Mobile Engagement Providers, Direct Marketing Ass’n—October 2013  Retroactivity of October 2013 regulations  ACA International—January 2014  Clarifying that predictive dialers are not ATDS  Prior express consent should be for original customer  Safe harbor for wrong numbers dialed
  48. 48. March 12, 2014 48 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Compliance Tips for Companies engaging in SMS/text message marketing  Make sure that you only send SMS/text messages to wireless numbers for which you have prior express written permission via for example, website check-box (should not be “pre-checked”), email, or consumer initiated text;  Only send SMS messages during the time allowed by the applicable state statutes, if any; but at least only between the local hours of 8am and 9pm;  Provide clear opportunity for opt outs (e.g. “Stop,” “unsubscribe,” “cancel” “quit”) and information that “Msg & data rates may apply;”
  49. 49. March 12, 2014 49 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP Compliance Tips  Maintain accessible records of consents;  Only employ vendors who can affirmatively demonstrate knowledge of and compliance with the requirements of the TCPA and have a clear contract that addresses the respective obligations, responsibilities and liability;  Have a policy in place regarding the use of SMS/text message marketing; and  Review and otherwise comply with the guidelines set forth in the Mobile Marketing Association’s U.S. Consumer Best Practices and the CTIA Guidelines
  50. 50. March 12, 2014 50 SEGMENT 1: Corey Parker Senior Consultant Baker Tilly Virchow Krause, LLP SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP PROGRAM DISCLAIMER: The content of this presentation is intended for educational and informational purposes only. It does not constitute the provision of legal advice or services by Perkins Coie LLP
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  54. 54. Introduction Chad is a partner in the financial services litigation practice of Troutman Sanders LLP, where he focuses on the defense of consumer class actions and general business litigation. Chad has substantial experience defending major consumer class action litigation in cases involving alleged false advertising, product defects, charging for fees and services by a variety of businesses, including computer, software, telecommunications, home warranty, insurance brokerage, and auto finance companies. He is well versed in California’s Unfair Competition Statutes, including Business & Professions Code Section 17200. He has tried cases to verdict before courts and private arbitrators and has substantial experience in mediation. March 12, 2014 54 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  55. 55. TCPA Federal Court Private Litigation March 12, 2014 55 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP Sept 1-30, 2013 August 1-31, 2013 Sept 1-30, 2012 162 165 75 TCPA suits were up 116% from September 2012 to September 2013
  56. 56. Class Certification Issues Under the TCPA •TCPA classes may be more difficult to certify and/or settle after: • Connelly v. Hilton, • Smith v. Microsoft, and • Newman v. AmeriCredit Financial Services, Inc. March 12, 2014 56 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  57. 57. Fed. R. Civ. P. 23 Prerequisites • Numerosity º So numerous that joinder is impracticable • Commonality º Common questions of law or fact • Typicality º Claims or defenses are typical • Fairness º Representative parties will fairly and adequately protect the interests of the class March 12, 2014 57 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  58. 58. Connelly v. Hilton Grand Vacations Co., LLC No. 12-cv-599 (S.D. Ca. Oct. 29, 2013). •Background: • The complaint alleged that subsidiary Hilton Grand Vacations made over 37 million illegal telemarketing calls to more than six million cell phones over a four-year period, seeking between $18 million and $54 million in statutory damages. • Connelly moved to certify the class, but Hilton objected, arguing that the proposed class failed to meet the predominance requirements under Civil Procedure Rule 23(b)(3). • The hotel chain argued that potential class members voluntarily provided their contact information to Hilton in a variety of ways. March 12, 2014 58 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  59. 59. Connelly v. Hilton… • Holding: • Court held that the class could not be certified because the issue of consent had to be addressed on an individualized basis. • Predominance º Express consent was provided in a variety of factual scenarios. º These forms of interaction with Hilton are relevant to a determination of prior express consent. March 12, 2014 59 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  60. 60. Connelly v. Hilton… • Rule 23(b)(2) settlement: • Court held that individualized statutory damages are also ineligible for (b)(2) certification, regardless of parallel request for injunctive relief. • Practical Implications: • Companies should offer numerous ways to provide consent in order to reduce the potential for standardization, which leads to easier class certification. March 12, 2014 60 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  61. 61. Smith v. Microsoft No. 11-cv-1958 (S.D. Ca. Jan. 28, 2014). • Background: Plaintiff sought certification of a class consisting of all individuals that “received a text message from short code 88202 containing the term ‘Xbox’ on September 12 or September 13, 2008.” º The plaintiff alleged that Microsoft utilized a text-message advertising company to send approximately 90,000 text messages promoting Microsoft’s Xbox and that he did not consent to receive telemarketing text messages sent on behalf of Microsoft. March 12, 2014 61 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  62. 62. Smith v. Microsoft… • On January 28, 2014, Court denied the motion to certify the class. • Holding: • Superiority º Individual testimony was needed to determine a myriad of facts, including identities of subscribers and “prior express consent.” • TCPA was never meant for class actions º Small claims court March 12, 2014 62 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  63. 63. Smith v. Microsoft … • Venue – Does not make logical sense because class representative is a resident of Illinois and contacts to California are minimal. • Manageability • Notice • Calculation of individual damages • Distribution of damages March 12, 2014 63 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  64. 64. Smith v. Microsoft … • Prior Express Consent – Significant evidentiary concerns were present. • Ascertainability – Narrowing class to those customers who actually received the text is difficult. • Plaintiff only had phone numbers, but did not have which consumer received the text. March 12, 2014 64 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  65. 65. Smith v. Microsoft… • Practical Implications: • Oppose Class Certification. º Constantly explore issues surrounding ascertainability and manageability. March 12, 2014 65 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  66. 66. Newman v. Americredit Financial Services, Inc. No. 11-cv-3041 (S.D. Ca. Feb. 3, 2014). •Background: • Plaintiffs in two consolidated class actions assert that Defendant used autodialing equipment or a prerecorded voice message to call consumers. • The calls were allegedly made regardless of whether the individual had a loan account with the company or not. March 12, 2014 66 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  67. 67. Newman v. AmeriCredit … • Holding: • Court denied motion for class certification and settlement finding the proposed settlement deal was confusing, among other reasons. • Two Classes º Account Holders º Non-Account Holders March 12, 2014 67 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  68. 68. Newman v. Americredit … • Typicality • Plaintiff is a member of the second class. • Fairness • Both classes are compensated the same regardless of consent. March 12, 2014 68 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  69. 69. Newman v. Americredit … • Notice • How to ascertain class and how to provide notice. • Opt-Outs • Not inclined to approve settlement which makes it unnecessarily burdensome to submit a claim or opt out. March 12, 2014 69 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  70. 70. Newman v. Americredit … • Objections: • Fees and Costs Filed Concurrently with Motion for Final settlement – does not provide class members opportunity to object to fee motion itself. • Practical Implications: • Notice is increasingly becoming a problem. • Ascertaining this class was problematic because of the non-account holders. • Limit scope and size of class when possible. March 12, 2014 70 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  71. 71. TCPA - Recent Circuit Ruling Dish Network, L.L.C. v. FCC, et al., No. 13-1182 (D.C. Cir. Jan. 22, 2014). •Holding: D.C. Circuit panel refused Dish Network’s petition to review certain FCC guidance on TCPA. Court held that FCC guidance was not binding on courts. •Practical Impact: Federal agencies can issue influential legal interpretations, including of the TCPA, without accountability or legal challenge in court. March 12, 2014 71 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  72. 72. TCPA - Prior Express Consent Mais v. Gulf Coast Collection Bureau, Inc., 944 F. Supp. 2d 1226 (S.D. Fla. May 8, 2013). •Holding: Neither creditors nor debt collectors have “prior express consent” to call a cell phone number via an ATDS merely by obtaining a phone number on a credit application. •Practical Impact: Outlier case that runs counter to 2008 TCPA guidance from the FCC. March 12, 2014 72 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  73. 73. TCPA - Prior Express Consent, cont. Baird v. Sabre, Inc., 2014 U.S. Dist. LEXIS 11246 (C.D. Ca. Jan. 28, 2014). •Holding: Individuals who knowingly release their cell phone numbers (e.g., on credit applications) have, in effect, given their “prior express consent” to be called at that number. •Practical Impact: Baird followed the FCC’s 2008 TCPA Order and hopefully should resolve concerns that Mais would represent a bell-weather of change in the law. March 12, 2014 73 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  74. 74. TCPA - Prior Express Consent, cont. Wills v. Optimum Outcomes, Inc., 2014 U.S. Dist. LEXIS 7377 (D. Utah 2014). •Holding: Prior express consent is provided when a cellphone number is included in a dispute/cease & desist letter to the creditor. •Practical Impact: Provision of a cell phone number in any document could be considered “prior express consent” under the TCPA. March 12, 2014 74 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  75. 75. TCPA - Good Faith Exception Chyba v. First Fin. Asset Mgmt., 2013 U.S. Dist. LEXIS 165276 (S.D. Cal. Nov. 20, 2013) •Holding: Where consumer listed cell phone number as “Home” number on rental car application, Defendant had good faith basis to believe that Plaintiff provided “prior express consent.” •Practical Impact: Shakes up the notion that the TCPA is a strict liability statute. March 12, 2014 75 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  76. 76. TCPA - Standing Olney v. Progressive Casualty Ins. Co., 2014 U.S. Dist. LEXIS 9146 (S.D. Ca. Jan. 24, 2014) •Holding: The party with standing under TCPA is the subscriber of the telephone number, which is both: (1) The “account holder,” and (2) The “regular user” of the phone. •Practical Impact: Provides for a potentially dispositive affirmative defense on standing grounds. March 12, 2014 76 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  77. 77. Conclusion • TCPA lawsuits are continuing on an upward trend. • Companies need to undertake a complete TCPA compliance audit to prepare for future litigation. • Oppose certification when possible. March 12, 2014 77 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP
  78. 78. Introduction Lea Lockhart practices in the area of health care law with a focus on health information technology, general business transactions and services, privacy and security and electronic health records. Prior to joining Hall Render, Lea graduated from Saint Louis University School of Law and earned a Master of Health Administration from Saint Louis University College for Public Health and Social Justice. She completed a fellowship at Saint Louis University Hospital and assisted the hospital in researching business and transactional matters, such as physician arrangements, hospital and physician liability, certification and licensure issues and medical staff matters and credentialing. Lea was also a lead editor for the Saint Louis University Journal of Health Law & Policy and interned at MetroHealth Medical Center in Cleveland, Ohio. March 12, 2014 78 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  79. 79. Introduction Joshua Reading concentrates his practice on health information technology, business transactions and tax/tax exemption, with a focus on helping clients in the negotiation and acquisition of a variety of technology and services products. He also assists clients with matters concerning foundations and support organizations, governance consulting, physician alignment and physician group practices. Joshua graduated magna cum laude from Indiana University Maurer School of Law and is a member of the Indianapolis Bar Association, the Indiana State Bar Association and the American Health Lawyers Association. March 12, 2014 79 SEGMENT 1: Reshma Patel - Jackson Manager Baker Tilly Virchow Krause, LLP SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  80. 80. March 12, 2014 80 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C. Risks and Best Practices The TCPA and Healthcare Providers
  81. 81. TCPA Implications for Healthcare Providers • Follow-up phone calls to patients • Automated messages as appointment reminders • Phone calls/texts following up on data transmissions • Debt collection purposes • Vicarious liability for third party service providers March 12, 2014 81 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  82. 82. Forms of Communication March 12, 2014 82 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C. • Text messages (SMS) are considered phone calls and are governed by the TCPA • Residential lines vs. cell phones • Artificial and pre-recorded calls (“robo calls”) • Auto-dialed calls • Dual-purpose calls – Chesbro v. Best Buy Stores, L.P. – Facts and circumstances analysis
  83. 83. Established Business Relationship • October 16, 2013 regulations removed the “established business relationship” exception • Many healthcare providers previously relied on this exception – Debt collection companies as agents for healthcare providers March 12, 2014 83 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  84. 84. Consent Requirements • The October 2013 regulations also clarified that the “prior express consent” requirement means written consent for certain communications – Healthcare providers must now have consent from patients in writing for covered communications • For certain communications, only prior express consent is required (e.g., verbal) – Implied consent is not sufficient for this requirement (e.g., patient providing his/her phone number – Mais case) March 12, 2014 84 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  85. 85. Healthcare Exception • “Healthcare” messages made by, or on behalf of, a “covered entity” or its “business associate” covered by HIPAA – For calls to residential phones, no consent required – For calls to cell phones, written consent is not required, but some prior express consent is still required (e.g., verbal) March 12, 2014 85 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  86. 86. Tax-Exempt Non-Profit Organizations • Calls/messages made on behalf of a 501(c)(3) entity – For calls to residential phones, no consent required – For calls to cell phones, written consent is not required, but some prior express consent is still required (e.g., verbal) March 12, 2014 86 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  87. 87. ID and Opt-Out Requirements • All artificial and pre-recorded calls that are not healthcare related must: – State at the beginning of the message the entity responsible for the message – During or after the message, state the phone number of the entity responsible for the message • For artificial and pre-recorded calls delivering a telemarketing message, the call must include an automated opt-out mechanism – As with the ID requirements, healthcare messages are exempted from this opt-out requirement March 12, 2014 87 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  88. 88. Penalties and Recent Enforcement Actions • Private right of action – Individuals who receive the calls/messages can sue • Statutory damages • $500 per call/message • $1,500 per call/message if it was a knowing or willful violation • No cap on class action damages • Mais v. Gulf Coast Collection Bureau, Inc. – Burden of demonstrating prior express consent rests with party defending the TCPA claim – in this case a collection agency working for a hospital – Hospital was not found vicariously liable in this case March 12, 2014 88 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  89. 89. CAN-SPAM Act Something to Be Aware Of • Regulates the automatic sending of commercial emails • There are exceptions for “transactional” or “relationship” based emails • Some emails are received by cell phones as SMS and may be covered by the TCPA as well March 12, 2014 89 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  90. 90. Best Practices for Healthcare Providers • Patient Consent Forms – Include authorization for communications on standard consent form (written consent) – Make sure scope of authorization includes billing and collection services agencies • When written consent is not available, for healthcare messages, obtain verbal consent while collecting contact information • Retain consent forms for at least four years (federal statute of limitations for TCPA actions) March 12, 2014 90 SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C.
  91. 91. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type your question in the box that appears and click send. ► Questions will be answered in the order they are received. Q&A: March 12, 2014 91 SEGMENT 1: Debra R. Bernard Litigation Partner, Co-Chair E-Discovery Services & Strategy Group Perkins Coie LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP SEGMENT 3: Chad R. Fuller Partner Troutman Sanders LLP SEGMENT 4: Lea H. Lockhart Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 4: Joshua P. Reading Attorney Hall, Render, Killian, Heath & Lyman, P.C. SEGMENT 2: Debra R. Bernard Partner Perkins Coie LLP SEGMENT 1: Jason A. Levine Partner Vinson & Elkins LLP
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