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The State of the TCPA: Consent, Dialers, the FCC -- the Law is in Flux

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With all of the recent rulings regarding the TCPA, how can companies navigate the TCPA waters, comply with the law, and still conduct their business? Join attorney David Kaminski for an in-depth …

With all of the recent rulings regarding the TCPA, how can companies navigate the TCPA waters, comply with the law, and still conduct their business? Join attorney David Kaminski for an in-depth review of the current law regarding dialers, consent under the TCPA and the FCC Rulings, and what companies face when seeking to comply with the current state of the law. For more info call 866-362-5478 or email info@dnc.com

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  • 1. 1 The State of the TCPA: Consent, Dialers, the FCC – the Law is in Flux Wednesday, June 12, 2013 2:00 p.m. – 4:00 p.m. EST Presented by: David Kaminski, Esq., Carlson & Messer LLP
  • 2. Legal Disclaimer Any content included in this presentation or discussed during this session (“Content”) is presented for educational and general reference purposes only. Contact Center Compliance, either directly or indirectly through speakers, independent contractors, employees or members of Contact Center Compliance provides the Content as a courtesy to be used for informational purposes only. The Contents are not intended to serve as legal or other advice. Contact Center Compliance does not represent or warrant that the Content is accurate, complete or current for any specific or particular purpose or application. This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. Contact Center Compliance is the sole owner of the Contents and all the associated copyrights. Contact Center Compliance hereby grants a limited license to the Contents solely in accordance with the copyright policy provided at www.acainternational.org. By using the Contents in any way, whether or not authorized, the user assumes all risk and hereby releases Contact Center Compliance from any liability associated with the Content. The views and opinions of the speakers expressed herein are solely those of the presenters and not Contact Center Compliance. 2
  • 3. 3 DAVID J. KAMINSKI David Kaminski is a partner at the law firm of Carlson & Messer LLP, a Los Angeles-based civil litigationdefense firm. Mr.Kaminski'spracticespecializes inthedefense ofcollectionagencies and creditors under the Fair Debt Collection Practices Act ("FDCPA"), the Fair Credit Reporting Act ("FCRA"),theTelephoneConsumerProtectionAct ("TCPA")andrelatedstateandfederalconsumer protection statutes. He has successfully represented clients throughout the United States and practices inallstate and federal courts, the9th Circuit Court ofAppeals,and theCaliforniaSupreme Court. Mr. Kaminski has extensive experience in multi-district and class action litigation with emphasison theFDCPA, FCRA, TCPA, and state invasionof privacyand recording act claims. He also serves as outside compliance counsel to numerous companies. In this capacity, he has developed policies, procedures, and compliance and training programs to minimize the risk of liabilities for the debt collection industry. Mr. Kaminski is a member of the attorney panel of the ACAInternational. He was retained bythe ACA to coordinate the defense strategies in a TCPA class action lawsuit, Leckler v. CashCall, in which a U.S. District Court in California sought to invalidate a 2008 FCCOrder which favored the debt collection industry. Mr. Kaminski successfully assisted in overturning the Court’s erroneous decisionwhich would have had harmful consequences to theentire collection industry. Hewas also one ofthe coordinating defenseattorneys inthe mass TCPAlitigation entitled, Kinder Coordinated Litigation, involving over 150 TCPA lawsuits filed in the California State Courts. Presenter Profile
  • 4. 4 Mr. Kaminski has published numerous articles on compliance and the evolving interpretations of consumer protection laws. He has lectured on such topics as the FDCPA, the FCRA, the TCPA, classactionstrategies in Stateand Federalcases, recordingactclaims,trends in consumerlitigation, risk management issues, and other related topics throughout the United States for the ACA International, the National Association of Retail Collection Attorneys, the California Association of Collectors and its chapters, DBA International, Collections & Credit Risk Conference, the CommercialLawLeague ofAmerica, the California Creditors BarAssociation, AccountsRecovery Summit, and DAKCS Software Systems, Inc. Mr. Kaminskihasalso been a long-time lecturerfor the California Continuing Education of the Bar. E-Mail: kaminskid@cmtlaw.com CARLSON & MESSER LLP 5959 W. Century Blvd., Ste. 1214 Los Angeles, CA 90045 (310) 242-2204 - Direct Presenter Profile
  • 5. 5 Agenda The TCPA • The Law, the FCC’s Role, Regulations and the FCC’s 2008 TCPA Order • Express Consent to Call Cell Phones. • Automatic Telephone Dialing Systems, Predictive Dialers, and Preview Dialing • Compliance Strategies
  • 6. 6 Telephone Consumer Protection Act of 1991 • Enacted in 1991; Pub. L. No. 102-243, 105 Stat. 2394, December 20, 1992 codified at 47 U.S.C. § 227. • Intended for actions to be brought in small claims courts. See Local Baking Prods. v. Kosher Bagel Munch, Inc., 2011 N.J. Super. LEXIS 143 (App.Div. July 19, 2011) (granting motion to dismiss class - class lacked “superiority” in light of TCPA’s individual incentives of minimum award of $500 and ability to be brought in small claims court); • Legislative intent was to curb telemarketing and avoid transferring the costs to consumers. • Other industries fell into purview of TCPA by virtue of dialer technology being used.
  • 7. 7 Telephone Consumer Protection Act of 1991 The TCPA prohibits the use of automatic telephone dialing systems and prerecorded messages to call wireless devices - the “autodialer” ban: § 227(b) Restrictions on use of automated telephone equipment (1) Prohibitions It shall be unlawful for any person within the United States or any person outside the United States if the recipient is within the United States— (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice. . . (iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call. (Emphasis added)
  • 8. 8 Telephone Consumer Protection Act of 1991 Is a Charge to a Cell Phone needed to Have a Claim? The party does not have to be charged for calls to cell phones to have standing to sue. See, e.g., Martin v. Leading Edge Recovery Solutions, LLC, 2012 U.S. Dist. LEXIS 112795 (N.D. Ill. Aug. 10, 2012)(citing several cases); Torres v. Nat'l Enter. Sys., 2012 U.S. Dist. LEXIS 110514 (N.D. Ill. Aug. 7, 2012)(nuisance and invasion of privacy sufficient to establish Article III standing aside regardless of monetary loss); Smith v. Microsoft Corp., 2012 U.S. Dist. LEXIS 101197 (S.D. Cal. July 20, 2012)(same)
  • 9. 9 Telephone Consumer Protection Act of 1991 Cont. § 227(b) Restrictions on use of automated telephone equipment (1) Prohibitions It shall be unlawful for any person within the United States or any person outside the United States if the recipient is within the United States… . . . (B) to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the Commission under paragraph (2)(B) (Emphasis added). • Call Forwarding Call Forwarding does not create TCPA claim - Even if a landline call is forwarded to cell phone FCC has ruled: "action on the part of any residential subscriber to forward certain calls from their wireline device to their wireless telephones does not subject telemarketers to liability under the TCPA." See, 20 FCC Rcd. 3788, 3807 at ¶48.
  • 10. 10 TCPA Damages • The TCPA provides for monetary damages: – Damages for standard violation - $500 per violation (42 U.S.C § 227(b)(3)(B)) or actual damages, whichever is greater – Damages for willful or knowing violation – the damages are up to 3 times the award for a standard violation (47 U.S.C § 227(b)(3)) – – The TCPA does not provide for recovery of attorney’s fees (But, see discussion re: TCPA class actions)
  • 11. 11 The FCC’S Role in the TCPA • Congress has delegated the FCC with the task to make rules and regulations to implement the TCPA. See 47 U.S.C. § 227(b)(2) • Pursuant to this authority, the FCC has implemented regulations which seek to curb excessive “telemarketing” calls—the purpose of the TCPA. (See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009)). – Not in reality – Rule affect ALL industries using dialer technology. • Many FCC regulations mirror the TCPA. Certain regulations provide exemptions to liability for prerecorded debt collection calls to residences: • The FTC held a summit on October 18, 2012 on the use of dialing technology to reach consumers. FTC made the distinction between illegal telemarketing calls and automated informational calls. FTC summit focused on limiting illegal robocalls. (http://www.ftc.gov/bcp/edu/microsites/robocalls/) • The FTC may influence the FCC, as Federal telemarketing regulation “involve[s] both the FCC and the FTC.” FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850, 856-857 (10th Cir. Colo. 2003)
  • 12. 12 The FCC’s Role in the TCPA - Exemptions Exemption that favors debt collection industry for calls to residential lines: - Exemption for commercial calls which do not transmit an unsolicited advertisement or constitute a telephone solicitation (47 C.F.R. § 64.1200(a)(3)(iii)) - and that do not adversely affect privacy rights. (See 1992 FCC Order, par. 39) - The regulations exempting pre-recorded debt collection calls to residences from TCPA liability are in line with the FCC’s consistent position that prerecorded debt collection calls to residences are not telephone solicitations and do not constitute telemarketing. (See 2008 FCC Declaratory Ruling, pars. 5 and 11) - FCC emphasized that “debt collection calls” fit within an exemption to the TCPA’s prohibition on prerecorded messages for calls that do not adversely affect the privacy rights that statutory section 227(b) is intended to protect and do not include the transmission of any unsolicited advertisement. 10 FCC Rcd. 12391, ¶ 16 (Aug. 7, 1995).)
  • 13. 13 TCPA – Exemption for Debt Collection Calls to Landlines – and Wrong Number Calls 227(b)(1)(B)[residential wireline] provisions impose liability for pre-recorded message calls made without the prior express consent of the called party : - Exemption for commercial calls which do not transmit an unsolicited advertisement (47 C.F.R. § 64.1200(a)(2)(iii)) and that do not adversely affect privacy rights. (See 1992 FCC Order, par. 39)“ - “Wrong Number” Debt Collection Calls to Landlines Likely Exempt – Meadows v. Franklin Collection Serv., Inc., 414 Fed. Appx. 230 (11th Cir. Ala. 2011); 2010 WL 2605048, at *6 (N.D. Ala. June 25, 2010) (summary judgment for defense because call made under “debt collection circumstance”. Calls fall under EBR and CC exemptions); Santino v. NCO Fin. Sys., Inc., 2011 WL 754874 (W.D.N.Y. Feb. 24, 2011) – IMPORTANT - See Hoover v. Monarch Recovery Mgmt., 2012 U.S. Dist. LEXIS 120948 (E.D. Pa. Aug. 24, 2012) even where non-debtor informs caller to stop calling and calls continue: “I agree with . . . Franasiak v. Palisades Collection, LLC that it is up to the FCC to determine whether a non-debtor's privacy rights have been violated . . . by classifying all debt collection calls as within their exceptions to the TCPA, the FCC has made that decision. 822 F.Supp.2d 320, 325 (W.D.N.Y. 2011).
  • 14. 14 The FCC’s Role in the TCPA - Exemptions The Established Business Relationship Exemption: •The exemption for pre-recorded calls to a residence based on an established business relationship (EBR has been eliminated by the FCC’s February 2012 FCC Report and Order.) •Telemarketers have until 10/16/2013 to cease utilization of the EBR relationship as evidence of consumer consent to receive prerecorded telemarketing calls). •Debt collectors have been relying on this “telemarketer-oriented” exception, so likely they have until 10/16/2013 to also cease use of the EBR exemption.
  • 15. 15 The FCC’s Role in the TCPA - Exemptions Exemption for Residential Line May Be Limited in VOIP Phone Case: •Lynn v. Monarch Recovery Mgmt., 2013 U.S. Dist. LEXIS 41700 (D. Md. Mar. 22, 2013) •Court holds that 47 U.S.C. 227(b)(1)(A) and (b)(1)(B) are not mutually exclusive •Although call at issue was to residential line, Plaintiff also alleged “charged for call,” and therefore Plaintiff was entitled to bring (b)(1)(A) claim • Phone at issue was 'attached' to VOIP equipment. •Court’s Analysis thin on 227(b)(1)(A) vs. (b)(1)(B) issue
  • 16. 16 FCC 2008 Declaratory Ruling – Prior Express Consent • ACA Files October 2005 Petition to request that debt collection industry be exempted from TCPA • FCC Issues Declaratory Ruling - Released January 4, 2008 – FCC clarifies prior express consent to creditor and debt collection industry and rules as follows: • “Prior express consent” defined for creditors and debt collectors: – “In this ruling, we clarify that autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ‘prior express consent’ of the called party.” Calls placed by a third party collector on behalf of that creditor are treated as if the creditor itself placed the call. (FCC 2008 Ruling, pars. 1 and 10) – Consent must be provided to the Creditor (for FCC pass through consent to apply) – Can consent be given directly to debt collector? Yes!
  • 17. 17 FCC 2008 Declaratory Ruling – Prior Express Consent Prior Express Consent: – Can be verbal or in writing. (Note: The TCPA did not specify how consent must be obtained – Clarified by FCC in 2/15/12/ Report and Order) – See, e.g., Greene v. DirecTV, Inc., 2010 U.S. Dist. LEXIS 118270 (N.D. Ill. Nov. 8, 2010)(orally providing cell number to credit bureau is prior express consent to potential creditor who receives fraud alert from credit bureau) – Via website - Roberts v. Paypal, Inc., 2013 U.S. Dist. LEXIS 76319 (N.D. Cal. May 30, 2013)(providing cell phone number to defendant via website constituted prior express consent) – Must be provided by the Consumer – not relative, friend etc. •Timing of “deemed” Consent: FCC Ruling says consent is “deemed” provided only if given by debtor to creditor “during the transaction that resulted in the debt owed” (FCC Ruling, Par. 10.) However, FCC also says: Consent is proper if wireless number was provided by the subscriber “in connection with” the existing debt. (FCC 2008 Ruling; Moore v. Firstsource Advantage LLC 2011 U.S. Dist. LEXIS 104517 (Voluntary providing of phone number to constitute consent does not require number be given at time account is activated). [Also See – Meyer v. Portfolio Recovery Assocs., LLC, 2012 U.S. App. LEXIS 21136 (9TH Circ. Cal. Oct. 12, 2012).]
  • 18. 18 What Is Consent? Meyer v. Portfolio Recovery Assocs., LLC, 2012 U.S. App. LEXIS 26708 (9th Cir. Cal. Dec. 28, 2012) – 9th Circuit Court of Appeals -District Court certified a provisional class of all persons using a cellular telephone number that defendant did not obtain either from a creditor or from the Injunctive Class member (i.e., a skip-tracing class) -In Initial 9th Circuit Opinion: In initial opinion (696 F.3d 943 (9th Cir. Cal. 2012)) , Court clarifies “deemed”,i.e., pass through consent): “Prior express consent is deemed granted . . . only if [number] was provided at the time of the transaction that resulted in the debt at issue (Citing FCC 2008 Order, par. 10). [Note: Most courts follow this initial interpretation] -The Ninth Circuit retracted this limited definition of consent in amended opinion: “Pursuant to the FCC 2008 ruling, prior express consent is consent to call a particular telephone number in connection with a particular debt that is given before the call in question is placed.” 2012 U.S. App. LEXIS 26708 at *8.
  • 19. 19 What Is Consent? Meyer v. Portfolio Recovery Assocs., LLC, 2012 U.S. App. LEXIS 26708 (9th Cir. Cal. Dec. 28, 2012) -Skiptracing Problematic - 9th Circuit rejected argument that there might have been consent for skip traced numbers because “[Defendant] does not point to a single instance where a cellular telephone number that had been given by the debtor to the original creditor was also found by [Defendant] via skip-tracing.” -Plaintiff is a suitable class representative despite prior criminal convictions. -Meyer - 9th - The amended opinion is now consistent with the FCC’s 2008 ruling. So long as consent was provided by a consumer “in connection with” a debt the calling party has consent to call via automatic telephone dialing systems and pre-recorded messages.
  • 20. 20 What Is Consent? • Prior Express Consent: – Can be provided by spouse? - See Gutierrez v. Barclays Group, 2011 U.S. Dist. LEXIS 12546, 8-9 (S.D. Cal. Feb. 9, 2011)("common authority" over debtor’s cellular telephone gives Defendant consent.). Osorio v. State Farm Bank, F.S.B., 2012 U.S. Dist. LEXIS 70466 (S.D. Fla. May 9, 2012). Factual inquiry a problem. – Terms of consent may be limited. See, e.g., Weiss v. Pittsburgh Penguins, Case No. 12-04585, (C.D. Cal. Filed May 25, 2012) (class action TCPA complaint whereby plaintiff alleges he was to receive no more than three text messages a week from sports team. Court held that Defendant did not exceed consent because purpose of contract to inform fans of developments would be frustrated by limiting text messages to a maximum of three a week.) Do Confirmatory Text Messages Exceed Consent? Soundbite Petition: – November 29, 2012, FCC Declaratory Ruling - sending a one-time confirmatory text message within five minutes of receipt of a consumer's request does not violate the TCPA so long as the sender had prior express consent to send text messages using an automatic telephone dialing system.
  • 21. 21 What Is Consent? • Prior Express Consent – 2008 FCC Consent Ruling Rejected: – Mais v. Gulf Coast Collection Bureau, 2013 U.S. Dist. LEXIS 65603 (D. Fla. 2013)(Now Certified for Interlocutory Appeal on 4 issues) – Court invalidates FCC’s 2008 Ruling as being contrary to TCPA because FCC Consent ruling is “implied consent” not “express consent.” Congress’ language in TCPA controls. Violates Supreme Court Statutory Rules – Say Hobbs Act does NOT apply. – The FCC’s consent ruling only applies (if at all) in the creditor-debtor collector circumstance, not to transactions involving the provision of medical care (court cites FCC 2008, par. 10) – Even if FCC ruling applies to medical debt, creditor was not the entity for whom debt collector was collecting debt. – For FCC ruling to apply, cell phone number had to be provided by debtor to creditor “during the transaction that resulted in the debt owed.” (Conflicts with Meyer)
  • 22. 22 What Is Consent? • Medical Debt – 2008 FCC Consent Ruling Applied: Mitchem v. Ill. Collection Serv., 2012 U.S. Dist. LEXIS 126017 (N.D. Ill. Jan. 20, 2012) –Plaintiff gave his cell phone number to Midwest Orthopedics when he received treatment there. –Plaintiff claimed he did not understand that, if he failed to pay the bill, Midwest would give his cell phone number to defendant to collect the debt. (Id. 14-18.) –The Court held under the TPCA, Plaintiff had given consent to be called –HIPAA not applicable and does not require a medical provider to have any consent to use his cell phone number to obtain payment for its services” 45 C.F.R. § 164.506(a),(c)(1). –Under HIPAA, the phone number could be used as long as it was “reasonably necessary” to obtaining payment. 45 C.F.R. 164.514(d)(3)(i) –7th Circuit Ruling – challenge to final FCC ruling is barred.
  • 23. 23 What Is Consent? • Prior Express Consent – Medical Debt – Manno v. Healthcare Revenue Recovery Group, LLC, 2013 U.S. Dist. LEXIS 75959 (S.D. Fla. May 30, 2013) – The defendant argued that the putative class members tendered their telephone numbers to the hospital at the time of their medical treatment and therefore it had consent under the TCPA – The Court in Manno held: “While this is not the place to adjudicate the merits of Defendants' consent argument, the point is that it does not defeat class certification. The uniform consent argument, based on the hospital admissions paperwork, is subject to classwide resolution, as all putative class members filled out the same paperwork.”
  • 24. 24 What Is Not Consent? • The Following Are Not “Prior Express Consent:” – Phone number capture through Caller ID (ANI). – Express request not to call cell number (verbal or written ok per TCPA and FCC 2008 Order, but see Gager decision.) – Consent provided to one creditor or collector is not consent to call on behalf of other creditors or collectors. – Skip tracing dangerous – see Meyer v. Portfolio 2012 U.S. App. LEXIS 21136 (9th Cir. Cal. Oct. 12, 2012) - can give rise to potential class action.
  • 25. 25 What Is Not Consent? • Is PEC Limited to Creditor-Debt Collector? – Thrasher-Lyon v. CCS Commer., LLC, 2012 U.S. Dist. LEXIS 125203 (N.D. Ill. Sept. 4, 2012) - • FCC 2008 ruling re: consent is limited to creditor/debtor context, not to debt collector generally. Cites FCC 2008, par. 10. Collecting on insurance subrogation claim is not FCC consent from creditor to collector. • Court also held: consent to call cell phone requires consent to receive robocalls and pre-recorded messages, not just consent to receive telephone calls. • In creditor/debtor context per FCC Rules, where plaintiff voluntarily provides telephone number to the creditor, debt collector has consent. • Case was on appeal to 7th Circuit. Appeal dismissed. Case settled.
  • 26. 26 Who Is Responsible for Proving “Consent”? • Creditors Responsible: – Per the FCC, Creditors are in the best position to have records kept in usual course of business showing consent: • Purchase agreements, sales slips, credit applications, etc. [does this suggest origination for “deemed consent”?] – Creditor bears responsibility - “Calls placed by a third party collector on behalf of that creditor are treated as if the creditor itself placed the call.” – Collectors Responsible Too! TCPA Defendants may have Burden to Prove Consent • FCC Ruling 2008 9th Circuit - Grant v. Capital Mgmt. Servs., L.P., 2011 U.S. App. LEXIS 18366 (9th Cir. Cal. Sept. 2, 2011 – unpublished)(relying on 2008 FCC ruling to conclude that “prior express consent” is a defense upon which defendant bears the burden of proof); Connelly v. Hilton Grant Vacations Co., LLC, 2012 U.S. Dist. LEXIS 81332 (S.D. Cal. June 11, 2012)(whether plaintiff gave the required prior express consent is a defense to be raised and proved by a TCPA defendant); Mais v. Gulf Coast Collection Bureau, 2013 U.S. Dist. LEXIS 65603 (D. Fla. 2013)
  • 27. 27 TCPA & the FDCPA – Revoking Prior Express Consent • Revocation of Consent- Writing Required Where FDCPA Applies – Some courts hold revocation of consent in debt collection by consumer is governed by the FDCPA, not the TCPA, and must be in writing because it is a “cease & desist” request per 1692c(c). Starkey v. Firstsource Advantage, 2010 WL 2541756 (W.D.N.Y. Mar. 11, 2010); Cunningham v. Credit Management, L.P., 2010 WL 3791104 (N.D. Tex. Aug. 30, 2010) Moore v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS 104517 (W.D.N.Y. Sept. 15, 2011); Moltz v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS 85196 (W.D.N.Y. Aug. 1, 2011) • Revocation – Oral Ok - No Writing Required Even When FDCPA applies. – Other courts say oral revocation is ok and no writing required. Gutierrez v. Barclays Group, 2011 WL 579238 (S.D. Cal. Feb. 9, 2011) (holding Starkey does not address whether a called party may orally revoke its prior express consent to receive certain automated calls); See Adamcik v. CCS, 2011 U.S. Dist. LEXIS 150107 (W.D. Tex 2011) (holding TCPA and FDCPA are two separate statutes; because TCPA silent on how consent can be revoked, oral revocation is effective).
  • 28. 28 TCPA & the FDCPA – Revoking Prior Express Consent • Timing of Revocation – Revocation at Time Application Executed – Letter by debtor to creditor does not revoke prior express consent to call cell phone because revocation must be made at time person "knowingly release[s]" her telephone number. Gager v. Dell Fin. Servs., LLC, 2012 U.S. Dist. LEXIS 73752 (M.D. Pa. May 29, 2012) (hearing on appeal held on 5/13/13 ). • Court held that FCC’s 1992/2008 Orders imply that the "instructions to the contrary" to revoke consent must be made at time person "knowingly release[s]" her telephone number. (Id. at *15,16) • Saunders v. NCO Fin. Sys., 2012 U.S. Dist. LEXIS 181174 (E.D.N.Y. Dec. 19, 2012) (following Gager and stating when consumer opens an account he cannot complain about being called at number given); • Cardoso v. Suncoast Schs., FCU, 2012 U.S. Dist. LEXIS 173168 (M.D. Fla. Dec. 6, 2012) (acknowledging argument that a verbal revocation would be insufficient to revoke "prior express consent" under the TCPA) • Kenny v. Mercantile Adjustment Bureau, LLC, 2013 U.S. Dist. LEXIS 62415 (W.D.N.Y. Apr. 29, 2013)(holds under either Starkey or Gager line of cases, consent was not revoked)
  • 29. 29 Automatic Telephone Dialing Systems & Predictive Dialers Automatic Telephone Dialing System defined by 47 USC 227(a)(1): •(a) DEFINITIONS.—As used in this section— (1) The term “automatic telephone dialing system” 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 CFR § 64.1200(f) (FCC Regulations) employs the same definition of ATDS as in the TCPA •FCC Jan 2008 Declaratory Ruling - Predictive dialer is an ATDS under TCPA • Key point per FCC – “the capacity to dial numbers without human intervention”. (FCC 2008 Ruling, Par. 13) To find that calls to wireless numbers are permissible when using predictive dialing software and a database of numbers, but prohibited if operating alone would be inconsistent with purpose of the TCPA and intent of Congress in protecting consumers (citing 2003 Order)
  • 30. 30 Automatic Telephone Dialing Systems & Predictive Dialers •Under the FCC’s 2008 ruling, the ATDS definition in TCPA is expanded. Plaintiffs will argue that predictive and other dialers constitute an ATDS under the FCC’s 2008 Ruling. •Note: FCC’s reason for autodialer ban, i.e., threat to public safety, calls to emergency and healthcare facilities, shifting costs to consumers, and dialers that tie up thousands of telephone lines in short period of time are not relevant today.
  • 31. 31 Automatic Telephone Dialing Systems & Predictive Dialers Petitions to the FCC Group Me Petition 1)Clarify what “capacity” means in 227(a)(1) 2)That for text or calls that are informational, not telemarketing, caller should be able to rely on intermediary representation regarding PEC. Communication Innovators Petition 1)Clarify whether predictive dialers fall under TCPA if they lack capacity to store or generate numbers randomly or sequentially (i.e., harking back to TCPA definition of dialers) 2)Honor Congressional intent of TCPA by distinguishing between telemarketing and informational calls
  • 32. 32 Automatic Telephone Dialing Systems & Predictive Dialers: Satterfield and Meyer Decisions — Ninth Circuit Court of Appeals - Satterfield v. Simon & Schuster, 569 F.3d. 946 (9th Cir. 2009) did not rely on the FCC’s 2008 Ruling in its interpretation of the definition of an ATDS. The key points are: • 9th Circuit says no need for FCC to interpret what is an ATDS since statute (227(a)(1)) clear and unambiguous on its face. See also Moore v. Firstsource Advantage, LLC, 2011 U.S. Dist. LEXIS 104517, 24-25 (W.D.N.Y. Sept. 15, 2011)(Satterfield merely reinforced definition of ATDS.) • A text message to a cell phone is a “call” under 47 U.S.C. § 227(b)(1)(A). • “Call” defined– To communicate with or try to get in communication with a person by telephone - But see 9th Circuit Meyer Decision- 2012 - Whether Defendant used an ATDS –Meyer Court cites Satterfield for definition of an ATDS, but then cites FCC’s 2008 Ruling re: predictive dialer is an “ATDS”: “[Defendant] PRA's predictive dialers fall squarely within the FCC's definition of ‘automatic telephone dialing system.’” – [Note: Court held Defendant WAIVED Dialer argument.] -
  • 33. 33 ATDS – Does Dialing in “Preview Mode” Circumvent ATDS Definition • Generally, in preview dialing mode, collection accounts and numbers to be called are sent to a live collector by the dialer or by the collection software before the number is dialed by the dialer. • Live collector has option to place a call to the telephone number. To place a call, the collector instructs dialer by a command and the dialer makes the call. • Does dialing in preview mode violate the TCPA? - Under Satterfield and the TCPA’s ATDS definition, if the dialer does not have the “capacity” to store or produce numbers to be called via a random or sequential number generator program, this may not trigger TCPA liability. “Capacity” is key. Griffith v. Consumer Portfolio Serv., 2011 U.S. Dist. LEXIS 91231 (N.D. Ill. Aug. 16, 2011).
  • 34. 34 • FCC Impact on Preview Dialing - FCC’s 2008 Ruling regarding dialers includes predictive dialers and devices with “the capacity to dial numbers without human intervention”. Caveat: If preview dialer is also a “predictive dialer,” FCC says dialer is an ATDS under the TCPA. • Caveat: the central issue would be whether the dialer being used in preview mode still has the capacity to dial without human intervention. If the dialer at issue is configured such that it cannot place calls without the human element (i.e., automated software extracted), an argument could be made that the dialer does not have the “capacity” to dial without human intervention. • Distinguish 2003 and 2008 FCC Rulings and purpose of autodialer ban. FCC Impact on Preview Dialing
  • 35. 35 Automatic Telephone Dialing Systems & Predictive Dialers • In Nelson v. Santander, Case No. 11-cv-307, (W.D. Wis. March 8, 2013), court held that routing the “preview dialed” calls through the dialer constituted using an ATDS. • Crux – Calls were routed through a device that had the “capacity” to be used as an ATDS, regardless of how they were dialed. • The Court held that the FCC’s “expansive interpretation” of the term ATDS included predictive dialers. A predictive dialer also included equipment that when paired with certain software could dial numbers “from a database of numbers.” (Id. at 15.) • The fact that collector clicked to dial a number was a “red herring”. Question is not how the defendant made a particular call, but whether the system it used had the “capacity” to make automated calls. Preview Dialing – Nelson v. Santander Decision
  • 36. 36 Automatic Telephone Dialing Systems & Predictive Dialers •Court noted: Defendant’s employees never called plaintiff by pressing numbers on a keypad. [Questionable whether this would make difference under Ct. ruling] •FCC Ruling as to predictive dialers is binding on Court because Hobbs Act in 7th Circuit prevents District Court review of final FCC orders. But See Dobbin v. Wells Fargo Auto Fin., Inc., 2011 U.S. Dist. LEXIS 63856 (N.D. Ill. June 14, 2011). Where call is manually dialed, even if phone is attached to an ATDS, no TCPA liability because not “using” an ATDS. Preview Dialing – Nelson v. Santander Decision
  • 37. 37 TCPA – Standing - Calls to Cell Phones • TCPA Standing For Call To Cell Phone and Wrong Number Calls – Cellco P'ship v. Dealers Warranty, LLC, 2010 WL 3946713, No. 09-1814 FLW (D.N.J. Oct. 5, 2010). Defendant placed unsolicited telemarketing calls to plaintiffs’ subscribers, not to plaintiff. Court followed Leyse and held only “intended recipient of the call” has standing to assert TCPA claims based on calls to cell phone. – IMPORTANT - Soppet v. Enhanced Recovery Co., LLC, 2012 U.S. App. LEXIS 9560 (7th Cir. Ill. May 11, 2012) • collector attempted to collect debt from customer at cell number at which customer had agreed to receive phone calls, but number had been reassigned to new consumer (plaintiff Soppet) • Seventh Circuit rejected argument that consent remained with the phone number after it was reassigned and rejected “intended recipient” theory • Holding: “We conclude that ‘called party’ in §227(b)(1) means the person subscribing to the called number at the time the call is made.” – See also Gutierrez v. Barclays Group, 2011 WL 579238 (S.D. Cal. Feb. 9, 2011) (rejects Leyse and holds “it is the [cell phone] ‘subscriber’ who has standing to sue for violations of the TCPA”.) D.G. ex rel. Tang v. William W. Siegel & Associates, 2011 WL 2356390 (N.D. Ill. June 14, 2011) (unintended recipient of call has standing under § 227(b)(3) because “a person” may bring suit under the TCPA - not limited to “called party”.)
  • 38. 38 TCPA – Standing - Calls to Cell Phones • IMPORTANT - Breslow v. Wells Fargo Bank, 11-CV-22681, 857 F.Supp.2d 1316 (S.D. Fla. 2012) – Actual recipient of call is “called party” for purposes of standing to sue under TCPA. – Callers bear burden of verifying the accuracy of their phone numbers. – Case is on appeal to Eleventh Circuit. • IMPORTANT - In Agne v. Papa John's Intern., Inc., --- F.R.D. ----, 2012 WL 5473719 (W.D.Wash. 2012), Wa.) – Certifies TCPA Text-Message Advertising Class; Finds Statutory Standing for "Unintended Recipients" Under TCPA' – See FCC Rulings –refer to residential and cell phone “subscriber” • Manno v. Healthcare Revenue Recovery Group, LLC, 2013 U.S. Dist. LEXIS 52620 (S.D. Fla. Mar. 26, 2013)(granting class certification) “[A] plaintiff's status as the ‘called party’ depends . . . on whether the plaintiff is the regular user of the phone and whether the defendant was trying to reach him or her by calling that phone.” Manno qualifies as the "called party" under this interpretation.
  • 39. 39 TCPA – Liability of Officers and Employees – In the context of the TCPA, "an officer may be personally liable under the TCPA if he had direct, personal participation in or personally authorized the conduct found to have violate the statute. – “Individuals who directly . . . violate the TCPA should not escape liability solely because they are corporate officers." Texas v. American Blast Fax, Inc., 164 F. Supp. 2d 892, 898 (W.D. Tex. 2001); See Covington & Burling v. Int'l Marketing & Research, Inc., 2003 D.C. Super. LEXIS 29, 2003 WL 21384825, at *6-7 (D.C. Super. 2003). – The extent of “direct participation” is key. An officer or agent of corporation is not liable for torts of others merely because of his office. See, e.g., Norwest Capital Management & Trust Co. v. United States, 828 F.2d 1330, 1344 n. 11 (8th Cir. S.D. 1987). See, e.g., Monsanto Co. v. Hill, 2004 U.S. Dist. LEXIS 30107 (E.D. Mo. May 21, 2004) – See also Brennan v. Nat'l Action Fin. Servs., 2012 U.S. Dist. LEXIS 127397 ( E.D. Mich. Sept. 7, 2012)(granting motion to amend to name corporate officers as TCPA defendants) – Mais v. Gulf Coast Collection Bureau, Inc., 2013 U.S. Dist. LEXIS 65603, 47-48 (S.D. Fla. May 8, 2013)(denying vicarious liability on summary judgment) • TCPA provides for "on behalf of" liability only in section 227(c)(5), not in section 227(b) (1)(A), the provision relevant here. FCC vicarious liability ruling NOT entitled to deference by Court. • Also held that because “the undisputed evidence” showed the defendant was an independent contractor, no vicarious liability under the TCPA
  • 40. 40 TCPA – Liability of Officers and Employees – FCC April 17, 2013 Ruling – The FCC stated “[W]e clarify that, while a seller does not generally initiate calls made through a third-party telemarketer, it nonetheless may be vicariously liable under federal common law agency-related principles for violations of either section 227(b) or 227(c) committed by telemarketers that initiate calls to market its products or services.” (Para. 48 of ruling) – This may support an argument that for 227(b) claims relating to a creditor and third party debt-collector, there may be vicarious liability even if not in TCPA. (See Mais) – See Applestein v. Fairfield Resorts, Inc., 2009 Md. App. LEXIS 164 (Md. Ct. Spec. App. July 8, 2009)(vicarious liability for TCPA claims for calls for residences based on “degree of control of principal” over agent/independent contractor); Charvat v. EchoStar Satellite, LLC, 676 F. Supp. 2d 668 (S.D. Ohio 2009) (no liability for TCPA calls to residences because plaintiff can’t show defendant had “sufficient control” over calling party).
  • 41. 41 FCC Implementation Deadlines – New FCC Telemarketing Rules New FCC October 16, 2013 Rules for Telemarketers •Prior Express Written Consent required for Predictive Dialer or Prerecorded Sales/Telemarketing message Calls to Cell Phones - October 16, 2013 •Prior Express Written Consent for Prerecorded Sales/Telemarketing Calls to Residential Numbers - October 16, 2013 (EBR eliminated) Note: FCC maintains former prior express consent standard for non- solicitation calls to cell phones initiated by an ATDS, i.e., oral or written consent sufficient.
  • 42. 42 FCC New Express Written Consent What Constitutes Express Written Consent •Written agreement •Signature of person to be called •Clearly authorizes seller to deliver advertisements or telemarketing messages using automated telephone dialing system or artificial or prerecorded voice •Telephone number to be called
  • 43. What Constitutes Express Written Consent? Must have clear and conspicuous disclosures • Seller may 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.
  • 44. 44 Compliance Issues • Use cell phone ID technology to identify cell phone numbers and ported numbers (See FCC warnings). • Seek specific representations from creditor clients on whether client had prior express consent to call consumer using dialer. • Have creditor clients include broad prior express consent language in consumer contracts that provide consent to call using an automatic telephone dialing system or a pre-recorded voice. (Caution – express consent contained in terms/conditions that consumer is not aware of may not be binding. See Roberts v. Paypal, Inc., 2013 U.S. Dist. LEXIS 76319 (N.D. Cal. May 30, 2013) • Collectors who “capture” telephone numbers on inbound calls should have their software immediately alert the collector to obtain proper consent. • Do not capture inbound numbers and load them into your dialer. • When in doubt, manually dial calls unless or until PEC is obtained.
  • 45. 45 Compliance Issues • Careful regarding “preview/power” dialing. May not be constitute “human intervention” due to dialer “capacity” issue. See Nelson v. Santander and FCC 2008 Ruling. • Train collectors to seek proper consent to call numbers associated with account. • Document proper consent in software, identify phone fields for cell numbers when PEC obtained! (could help avoid class cert.) • Be able to distinguish between numbers received from client vs. your own skip tracing efforts. DANGER – skip tracing. • Discard random or sequential number generator programs in dialers. • Examine securities filings, website, response to RFP - delete any references to “dialers”, predictive, auto-dialers, ATDS, etc.
  • 46. David Kaminski, Esq. Partner Carlson & Messer LLP (310) 242-2204 kaminskid@cmtlaw.com Questions? Ryan Thurman Director of Sales & Marketing 866-362-5478 ext. 116 Ryan@dnc.com  Free Wireless Number Report  Free Compliance Report