September 2022 Action Clarifies Only Random Calls Trigger TCPA Violations — Not Mere Use of An Autodialer

Mehl v. Green, et al. 2022 WL 4056269 (E.D. Cal. Sept. 2, 2022) - A law firm was recently sued after one of its attorneys allegedly made several debt collections calls. In suing the firm, the Plaintiff contended that the calls were made using an autodialer and without consent, thus triggering the TCPA and its $500.00 per call statutory damage provision. The Court, however, disagreed, holding that only random calls can trigger the TCPA–even if an autodialer was allegedly used:

“Plaintiffs allege that each of the calls concerned either specific problems occurring at the subject property or the state court cases, thereby dispelling any notion that the calls were made randomly. Several courts have held that when a plaintiff provides their number—which is the only logical explanation in this case—a TCPA claim does not lie—even if the plaintiff claims that the defendant used an autodialer.”

Following the Supreme Court’s 2021 ruling in Facebook, Inc. v. Duguid, a number of courts have suggested that either production or storage of phone numbers using a random or sequential number generator (RoSNG) triggers the TCPA. The case at hand expands this, finding that although the numbers may have been stored, they were stored with purpose and not randomly. Thus, from this case it has been determined that only calls to randomly-produced phone numbers trigger the TCPA, which presents a valid cause of action to those subject to practices like this.

July 2022 — Court Defines Standing Requirements for TCPA Violations

Hall v. Smosh Dot Com, Inc., No. 2:21-cv-01997-JAM-AC, 2022 WL 2704571 (E.D. Cal. July 12, 2022) - Plaintiff brought suit alleging violations of the TCPA and Texas state law as a result of a minimum of five text messages allegedly sent by the Defendant's entertainment companies, “soliciting [Defendants’] merchandise to the phone number used by [Plaintiff’s] minor son.” The Court determined that the Plaintiff’s standing arguments were unpersuasive because the Plaintiff had not pled that she had actually received any of the text messages, but had instead pled that she was “the subscriber and owner of the phone.” Further, the Court determined in accordance with prior caselaw, that the “actual user of the number” is who “the TCPA is intended to protect,” and the term “called party” in the TCPA “means the actual recipient of the calls or texts and not the owner.” Thus, the Court granted the Defendant’s motion to dismiss for lack of standing.

In order to have a valid cause of action, a party must be the direct recipient of the communication that violates some aspect of the TCPA. Merely being the subscriber to a number, or the person to whom the number is listed, is inadequate in and of itself. Thus, a showing of direct receipt of the communication is required.

June 2022 — What Constitutes an ATDs Remains Undecided

Panzarella v. Navient Sols., Inc., No. 20-2371, 2022 WL 2127220 (3d Cir. June 14, 2022). - Plaintiffs argued that the Defendant violated the TCPA by calling their cellphones without their prior express consent using an automatic dialing system (“ATDS”). The Defendant serviced the loans of the Plaintiff who provided their mother’s and brother’s phone numbers as part of their references to receive the loan. Once the Plaintiff became delinquent on their loans, the Defendant allegedly called the Plaintiff’s mother four times and Plaintiff's brother fifteen times, using a dialing software equipment developed by Interactive Intelligence Group Inc. (“ININ”). Although that the equipment could be classified as an ATDS, the Third Circuit declined to decide whether the Defendant’s dialing equipment did qualify as an ATDS under the TCPA because, “[Defendant] did not use an ATDS when it called.” In its reasoning, the Court stated that Defendant chose to use a service from ININ that utilized “lists [that] contained contact information drawn from the Defendant’s internal database of account information rather than computer-generated number tables.” Since the Plaintiff provided this information voluntarily, and contacting his relatives was not the result of any randomized generation, the Third Circuit upheld the district court’s grant of summary judgment because the Plaintiffs could not maintain that the Defendant used an ATDS in violation of the TCPA.

The question as to what an ATDs is under Section 227(a)(1) still remains largely unanswered. This is an ongoing issue that courts throughout the country are attempting to confront after the Supreme Court decision in Duguid v. Facebook. This is also a question that Shipkevich PLLC monitors closely, as the answer to the question will likely provide a multitude of causes of actions for our clients.

May 2022 — TCPA Claims for Calls to Former Customers May Not Be Subject to Arbitration Clauses

Kelly v. McClatchy Company, LLC, No. 2:21-cv-01960-KJM-JDP, 2022 WL 1693339 (E.D. Cal. May 26, 2022). – Plaintiffs brought two claims against Defendant for violating the TCPA: (1) for “making telemarketing calls to individuals listed on the National Do Not Call Registry without written consent;” and (2) “continuing calls despite receiving ‘do not call’ requests.” A California federal district court recently denied a Defendant’s motion to compel arbitration because Defendant’s alleged conduct arose after its contracts with the Plaintiffs were terminated, holding, therefore, that the arbitration agreement that previously governed disputes between the parties while they were in contract did not cover “the dispute in question.”

This case clarifies that a claim brought against a party for violating the TCPA can only be governed by arbitration so long as the parties are currently maintain a contractual relationship, which requires that disputes are handled through arbitration.

Regulatory Round Up: Federal & State TCPA Actions

FCC Notice of Proposed Rulemaking Directs Mobile Providers to Block Illegal Text Messages

On September 23, 2022, the FCC issued a Notice of Proposed Rulemaking (NPRM) in which the Commission proposed to require mobile wireless providers to block illegal text messages. The NPRM proposal would specifically direct mobile wireless providers to block text messages at the network level that purport to be from invalid, unallocated, or unused numbers, as well as numbers logged on a Do-Not- Originate (DNO) list. This action comes after the FCC’s publication of its 2022 Consumer Advisory Committee Report on the State of Text Messaging that showed a nearly 146% increase in the number of complaints the FCC has received from consumers complaining of receiving unwanted text messages.

FCC Order to Stop International Robocall Scams

On May 19, 2022, the FCC adopted new rules to stop illegal robocalls that originate overseas from entering U.S. networks. The new rules regulate gateway providers, which serve as a major point of entry for robocalls. Gateway Providers are U.S.-based intermediate service providers that receive calls directly from a foreign originating provider or foreign intermediate provider at its U.S.-based facilities. The call is then transmitted downstream to another U.S.-based intermediate provider or terminating voice service provider.

These rules institute stringent compliance requirements to ensure that such providers comply with STIR/SHAKEN caller ID authentication protocols and further require that they take additional measures to validate the identity of the providers whose traffic they are routing.

Most significantly, the FCC’s Order prohibits domestic service providers from accepting calls destined to U.S.-based telephone numbers from any entity that is not an authorized “Gateway Provider” registered in the Robocall Mitigation Database. Additionally, Gateway providers are also required to verify that any foreign-originated call that utilizes a U.S. telephone number (i.e. VoIP or cellular number) is authentically originated from the service provider associated with that provider. Failure to comply with these implementations subjects the provider to significant fines of up to $22,021 per violation, with each call constituting a separate violation.

This implementation is imperative to halting the frequency of robocalls, as FCC Chairwoman Rosenworcel reported in a May 19, 2022 FCC statement, that about two-thirds of all robocalls now originate from outside the U.S.

States Enacting TCPA-Type Rules

Washington’s New TCPA Bill: Washington RCW 19.158, et. seq.​

On June 9, 2022, Washington’s own quasi-TCPA bill went into effect. The bill governs “telephone solicitation,” defined as an “unsolicited initiation of a telephone call…for the purpose of encouraging the person to purchase property, goods, or services or soliciting donations.” If a called party “states or indicates” that they do not wish to be called, the caller must end the call within 10 seconds and is prohibited from calling that party again for a period of 12 months. The caller is also prohibited from selling the contact information to a third party.” Further, a private right of action is allowed in Washington for “repeated violations” valuing at $100 per violation. The new law also provides for attorney’s fees and costs which is predicted to likely incentivize TCPA plaintiffs to make claims under both the federal and state statutes where applicable. However, unlike the federal TCPA, Washington’s law does not contain a willful and knowing damages component.

Oklahoma Enacts Telephone Solicitation Act; Oklahoma House Bill No. 3168

On May 20, 2022, the Oklahoma Telephone Solicitation Act of 2022 (“TSA”) was signed into law. The TSA will go into effect on November 1, 2022. The new law sets in place a new, “Mini-TCPA” in Oklahoma. The Oklahoma law allows for any called party “aggrieved by a violation” of the Act to both (i) enjoin the violation, and (ii) recover “actual damages” or $500, whichever is greater. Additionally, and perhaps most significant, if a court finds that the calling party acted “willfully, or knowingly” in violating the TSA, the court is granted the discretion to upsurge damages “to an amount equal to not more than three times” the amount of the damages. The statute bans commercial telephonic sales if the call “involves an automated system for the selection OR dialing of telephone numbers or the playing of a recorded message,” without prior express written consent of the called party.