The Telephone Consumer Protection Act (TCPA) landscape continues to evolve as new legislation is implemented and courts across various jurisdictions grapple with complex issues regarding standing, agency, and consent. This mid-year update provides a synopsis of the new Federal Communications Commission (FCC) amendments to the TCPA as well as a succinct analysis of recent case law shaping the TCPA's enforcement and interpretation. Legal professionals and industry stakeholders should take note of these recent developments as they may signal significant trends and legal benchmarks.
FCC Tightens TCPA Rules for Lead Generation and Text Marketing
In December 2023, the FCC introduced new TCPA rules specifically targeting communications from lead generators. This action enforces a direct consent model requiring "prior express written consent" on a "one-to-one" basis, meaning consent obtained for one seller cannot be implied for others. Each seller must be distinctly named, with an explicit disclosure that the consumer agrees to receive communications from them. The calls and texts must also be related to the lead-generating website's offerings. This stringent regulation is designed to safeguard consumers from unsolicited contacts and ensure informed consent. Furthermore, the TCPA now covers text messages under the National Do Not Call Registry as of March 26, 2024. Marketers will get a period to adapt, with the text-blocking rule activation set for July 24, 2024. However, businesses should note that the crucial 1:1 consent rule will be effective starting January 27, 2025, and will present a pivotal change for lead generation and marketing industries.
The Question of Agency and Attenuated Sale
We have recently seen courts delve into the complexities surrounding agency relationships and attenuated sales under the TCPA. These cases have scrutinized the parameters within which third-party entities can be held responsible for TCPA violations. For example, in Bank v. Alleviate Tax LLC (E.D.N.Y. Mar. 28, 2024), the court granted a motion to dismiss based on the absence of agency allegations where the plaintiff merely alleged that a marketing representative “was an employee” of the defendant, providing yet another perspective on TCPA litigation. The ruling suggests that plaintiffs must provide substantial evidence to support claims of agency between the defendant and third parties making unsolicited calls or sending messages on their behalf. This verdict seems to narrow the pathway for pursuing TCPA violations while also emphasizing the need for clarity in business relationships and thir-party marketing agreements to mitigate potential liabilities.
Feigned Interest and Its Implications
Courts have also tackled the intriguing issue of ‘feigned interest' in cases like Charvat v. Southard Corp. (S.D. Ohio Sept. 30, 2019) and Dobronski v. Family First Life LLC (E.D. Mich. Mar. 29, 2024) where the plaintiffs faked their interest in the defendants’ products or services in an attempt to obtain the identity of the callers. These lawsuits explore the boundaries of expressed consent and the legitimacy of interest shown by potential plaintiffs as a tactic to establish standing in TCPA litigation.
The Dobronsky case showcases one plaintiff’s interesting method of feigning interest for purposes of ascertaining the identity of the caller, presumably so he could later sue the caller. In that case, Dobronsky stated that to determine who is calling him, he “sometimes provides false but unique identifying information to the caller. Then, if a later call ever references that earlier information, Dobronski can use information from that second call to identify the source of the initial, allegedly illegal Automated Telephone Dialing System (ATDS) call. He calls this technique the “canary trap.” Using the “canary trap” information provided by the plaintiff, the court carefully analyzed whether a series of calls made to the plaintiff were “follow-ups resulting from [the plaintiff’s] feigned interest in the insurance products being sold,” and therefore were not unsolicited whereas the plaintiff could not demonstrate that they had caused him injury.
In Charvat, the court found that where the plaintiff had inquired about the warranty on the defendant’s products during a sales call, the plaintiff “unambiguously” inquired about products or services. At that point, the plaintiff “moved from inquiries geared towards discovering Southard’s identity to a seemingly legitimate question about what was being marketed.” The court found that was sufficient to create an existing business relationship (EBR) on a future call such that the future call did not violate the TCPA.
These matters accentuate the intricacies of alleging genuine injury and consent within the framework of unsolicited communications.
Dismissals for Lack of Article III Standing
A series of cases, including Belleville v. Florida Insurance Services Inc. (S.D. Fla. May 31, 2024) and Bradley v. DentalPlans.com (D. Md. June 6, 2024), have seen motions to dismiss alleging a lack of Article III standing based on the allegation that plaintiffs do not have an injury sufficient to confer standing. While neither defendants’ motions for lack of standing were granted in these cases, these decisions further contribute to the ongoing discussion about what constitutes a sufficient stake or harm for plaintiffs to legally challenge alleged TCPA violations in a federal court.
The Belleville court rejected the conclusion that the plaintiff must allege facts showing that the defendant made more than one call to the plaintiff in order to establish Article III standing to sue under the TCPA. The Bradley court found that “winback” calls constitute telemarketing and require prior express written consent to be in compliance with the TCPA; the defendant could not eliminate an injury under the TCPA where there was insufficient consent to receive a “winback” call.
Through these rulings, courts continue to refine the criteria for establishing the necessary injury-in-fact for standing.
Key Takeaways for Industry Participants
The recent FCC amendments further complicate the TCPA environment. Notably, the new rules demanding "prior express written consent" for each marketing message on a "one-to-one" basis will require businesses to obtain specific and informed consent from consumers directly related to the services the lead generator offers.
The diverse outcomes of cases regarding agency and consent underscore the unpredictable nature of TCPA litigation. Legal professionals and companies alike must be prepared to navigate these complexities with a keen understanding of the specific legal precedents and regulatory nuances influencing their jurisdiction. As the courts continue to address these pressing issues and as new TCPA rules take effect, industry participants should closely monitor these trends and adjust their practices accordingly. Staying informed and proactive in response to these developments is key to navigating the challenges and opportunities presented by the evolving interpretation of the TCPA.
