A new study has found that litigation involving the Telephone Consumer Protection Act (“TCPA”) has increased 50 percent since the Federal Communications Commission released its July 2015 “Omnibus” Declaratory Ruling and Order, which had purported to clarify several issues around the agency’s TCPA rules.  As explained below, this continuing trend is one of many reasons that Congress and the FCC should revisit the TCPA framework and provide reasonable, practical compliance approaches for good-faith callers.

“TCPA Litigation Sprawl,” released by the U.S. Chamber Institute for Legal Reform, looked at TCPA cases filed between August 1, 2015 and December 31, 2016.  The study found 3,121 TCPA cases and noted that, due to electronic docketing limitations, the actual number of TCPA cases brought against companies during this 17-month period is “certainly much higher.”  More than 1,000 of these cases are nationwide class action lawsuits that seek tens of millions (or even billions) of dollars in damages.

This litigation has affected companies in more than 40 different industries.  Although the financial and collections industries saw the most lawsuits, the health, retail, and education sectors combined represent more than 20% of all defendants.  The expanded geographic reach of TCPA litigation also offers further evidence of how widespread the impact of the FCC’s 2015 decision has been.  For example, TCPA lawsuits used to be “almost exclusively found in California, Illinois, and Florida federal courts,” according to the study.  Those states still feature the largest number of cases (California alone accounted for more than 1,000 of the cases analyzed in the study), but Georgia, New Jersey, New York, and Texas each had more than one hundred TCPA lawsuits.

The study also found that 44 plaintiffs’ law firms were responsible for approximately 60% of the TCPA cases, with a single law firm filing 263 TCPA lawsuits (most of them class actions).  Another law firm even created a smartphone application that creates a call log to hunt for new litigation targets.  The study quoted a Seventh Circuit decision upholding damages against a small hearing aid company for 32 fax advertisements that said the TCPA has “blossomed into a national cash cow for plaintiffs’ attorneys specializing in TCPA disputes . . . the TCPA is nailing the little guy, while plaintiffs’ attorneys take a big cut.”

Serial TCPA plaintiffs are also increasingly taking advantage of the 2015 FCC decision and the agency’s impractical TCPA approach.  For example, according to the report, a single plaintiff filed 20 cases in California federal court “against defendants in the financial services, health, security, travel, energy/solar, and legal industries.”  Another serial plaintiff apparently registered 20 telephone numbers and listed them in the white pages, resulting in phone calls and texts over which the plaintiff then filed more than 30 TCPA lawsuits.

The study recommended that Congress take a number of steps to curb litigation abuse, noting that the TCPA was enacted in 1991, before the existence of smartphones and other now-common technologies.  Example recommendations include:

• Limit the statute of limitations to one year, which would track similar statutes;
• Establish an affirmative good faith defense;
• Provide relief for calls to reassigned or wrongly provided numbers;
• Limit statutory damages; and
• Refocus the TCPA on bad actors rather than legitimate businesses.

Finally, the study cautioned that the threat posed by abusive TCPA litigation is likely to get worse until Congress implements these suggestions or the FCC re-evaluates the 2015 Order and addresses its weaknesses.

Many callers also continue to struggle with deciphering and operationalizing the FCC’s TCPA expectations.  This ongoing challenge, along with the continuing rise in class action litigation, underscores further the need for Congress and the FCC to revisit the TCPA framework and provide reasonable, practical compliance approaches for good-faith callers.