2015 was a busy year for the ARM industry. FDCPA litigation flourished. Consumer litigation in general was up year-over-year. The CFPB, FTC, and various state and local regulatory bodies made headlines. However, in one man’s opinion, in July of this year the ARM industry was hit with the most significant event since the Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 and/or the Consumer Financial protection Bureau (CFPB) came into existence in 2011.
On July 10, 2015 Federal Communications Commission (FCC) finally released its long-awaited (since June 18) TCPA Omnibus Declaratory Ruling and Order. (You can read the full text of the ruling here.) The Ruling has been extremely controversial. The ruling divided the FCC along partisan lines. Two angry, detailed dissents were filed. One by Commissioner Ajit Pai and the second by Commissioner Michael O’Reilly.
The stated goal of the ruling? Per the order itself: “To reiterate and simplify the relevant portions of the TCPA, and as a guide to the issues we address below: if a caller uses an autodialer or prerecorded message to make a non-emergency call to a wireless phone, the caller must have obtained the consumer’s prior express consent or face liability for violating the TCPA. Prior express consent for these calls must be in writing if the message is telemarketing, but can be either oral or written if the call is informational.”
Since that July ruling there has practically been a cottage industry devoted to providing opinion and expertise interpreting the order. (Editor’s note: insideARM was no exception. We devoted two webinars to the topic. Both had unprecedented large audiences. )
Among the issues discussed and debated in the last 5 months:
- After the ruling, what is an Automated telephone Dialing System?
- What is consent?
- How can consent be revoked?
- Does Consent need to be obtained from the current subscriber or the intended recipient of the call?
- What is the “One Strike” Rule?
The ink was barely dry on the FCC ruling before ACA International filed a lawsuit to set the ruling aside. Other entities and trade associations also filed separate actions challenging the ruling. The individual suits we consolidated into the ACA action.
On September 21, 2015, ACA International, Sirius XM Radio, Inc., Professional Association for Customer Engagement, Inc., Salesforce.com Inc. and ExactTarget, Inc., Chamber of Commerce of the United States of America, Consumer Bankers Association, Vibes Media, LLC, Rite Aid Hdqtrs. Corp., and Portfolio Recovery Associates filed an unopposed joint motion for briefing format and schedule in their consolidated appeal of the FCC’s July 10, 2015 Declaratory Ruling and Order. The Order approving that proposed schedule was filed by the court on October, 13, 2015.
Under the approved schedule briefs are required in intervals from November 25, 2015 through February 24, 2016. Oral arguments will be scheduled for some time thereafter.
Meanwhile, there have been a handful of significant TCPA opinions issued since the July 10 ruling.
In August, in the case of Luna v. Shac, LLC, the Northern District of California court discussed what was and wasn’t an ATDS. The order was one of the first court rulings discussing the FCC’s July Declaratory Ruling; specifically, that portion of the ruling regarding the definition of an ATDS. The court determined that the multiple steps that were required to send a text message in this matter were, in total, sufficient human intervention to defeat the TCPA claim.
On October 14, 2015, in the case of Leyse v. Bank of America, the Third Circuit Court of Appeals dealt with the issue of “intended recipient” of a call. In Leyse the parties agreed that the plaintiff’s roommate was the intended recipient of the call. But, the court concluded that Leyse did indeed have statutory standing to bring the TCPA claim. The Court’s reasoning is that the roommate was a regular user of the phone line and an occupant of the residence, and that this brought him within the language of the TCPA and the zone of interests it protects.
On October 23, 2015, a Third Circuit Court of Appeals decision gave TCPA plaintiffs additional ammunition supporting an expanded definition of an “ATDS.” In Dominguez v. Yahoo, Inc. the court vacated a prior summary judgment decision in Yahoo, Inc.’s favor. First, the court stated, “Because this is an issue of heightened importance in light of the 2015 FCC Ruling, and the District Court did not previously have the benefit of the FCC’s ruling in addressing the issue, remand is appropriate to allow that Court to address more fully in the first instance whether Yahoo’s equipment meets the statutory definition (of an ATDS).”
Also last month, a District Court Judge for the United States District Court for the Eastern District of Wisconsin granted a motion to continue the stay of a Telephone Consumer Protection Act (TCPA) lawsuit, pending resolution of the various appeals challenging the Federal Communications Commission’s (FCC) July 10, 2015 Declaratory Ruling and Order.
Lastly, just this past week there was an announcement that Western Union had settled a TCPA class action case for $8.5 million dollars. The case involved text messages to a potential class in excess of 800,000 individuals. Still, the settlement amount was somewhat surprising considering the fact that Western Union had a number of affirmative defenses available. Clearly there was a business decision made to settle the case.
TCPA litigation is alive and thriving. The July 2015 FCC ruling didn’t help or resolve anything. The attorneys involved in pursuing and defending the cases will make the money on the cases. ARM businesses will continue to struggle with the time and resources involved in defending the cases. Individual class members will continue to see crumbs. This is the nature of class action litigation.