tcpa class actions: pursuing or defending claims over phone,...
TRANSCRIPT
TCPA Class Actions: Pursuing or Defending
Claims Over Phone, Text and Fax SolicitationsImpact of the recent D.C. Circuit ruling in ACA International v. FCC, Statutory Damages
Limitations, Superiority, Consent and More
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TUESDAY, APRIL 24, 2018
Presenting a live 90-minute webinar with interactive Q&A
Ryan McCune Donovan, Atty, Bailey & Glasser, Charleston, W.Va.
Paul G. Karlsgodt, Partner, Baker Hostetler, Denver
Jennifer R. Murray, Member, Terrell Marshall Law Group, Seattle
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Key Issues in TCPA Class
Actions
• Hot Issues in 2018
– ATDS (autodialer) definition
– Constructive notice of reassigned numbers
– Consent/Waiver
– Standing (Spokeo)
– Picking off/Mootness (Campbell-Ewald)
– Ascertainability
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ACC International v. FCC
• Invalidated FCC’s definition of ATDS– Rule that would make all smart phones ATDS devices is
too broad.
– Did not attempt to specifically define what an ATDS is.
– Suggested that present capacity alone is not the correct test, and that equipment that could be converted to an ATDS by flipping a switch could still qualify.
– Raised but did not resolve several questions:• At what point is the necessary modification significant enough
to prevent a device or application from being an ATDS?
• Is it enough for the device to merely have the capacity to be used as an ATDS, or must it actually be used as one?
• Does human intervention negate a finding that an autodialerwas used?
• Can a device that lacks capacity to “randomly or sequentially” generate numbers be classified as an autodialer?
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ACC Int’l, Cont’d
• Invalidated FCC’s rule that caller has
constructive notice of reassignment after
the first call to the new owner.
– DC Circuit did not define what would create
constructive notice
– Leaves open the possibility that constructive
notice exists before any calls are made.
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Consent as an Individualized
Issue of Fact
• Pre-2013 Standard
– Van Patten v. Vertical Fitness Group, LLC, ___ F.3d ___ (9th Cir. Jan. 30, 2017) (“We conclude that the FCC has established no rule that a consumer who gives a phone number to a company has consented to be contacted for any reason. Instead, FCC orders and rulings show that the transactional context matters in determining the scope of a consumer's consent to contact.”)
• But note the impact of the 2013 FCC Guidelines:
– Requiring “prior express written consent” for telemarketing calls.
– Making the caller responsible for proving that prior express written consent was given.
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Consent as an Individualized
Issue of Fact: Practical Questions
• Is it possible to distinguish those who consented from those who didn’t?
• Who made the calls? Were multiple platforms used?
• How do you tell if the call was to the person who consented?
• To which of the consenting consumer’s phones was the call made?
• When was the telephone number obtained?
• How was the telephone number obtained?
• Who answered the phone? Did anyone?
• Was the call for debt collection purposes or marketing purposes?
• Was the call to a cell phone or to a land line?
• For post-October 2013 telemarketing calls– Was the consent in writing?
– Does the defendant have proof?
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Class Certification Decisions
Turning on Questions of Consent
• Class certification denied – Newhart v. Quicken Loans Inc., No. 9:15-cv-81250 (S.D. Fla. Oct. 13, 2016)
(even under post-2013 standard, variations in forms prevented common resolution of question of “prior express written consent”).
– Shamblin v. Obama, No. 13-cv-2428, 2015 U.S. Dist. LEXIS 54849 (M.D. Fla. April 27, 2015) (no common way to determine consent, and no way to determine whether number was assigned to a mobile number at the time of the call).
– Balthazor v. Central Credit Services, Inc., et al., No. 10-62435-CIV, 2012 WL 6725872 (S.D. Fla., Dec. 27, 2012) (holding that providing a telephone number to a debt collector can be consent to call that number, and summarizing cases coming to similar conclusion).
– Connelly v. Hilton Grand Vacations Co., LLC, No. 12CV599 JLS (MDD) (S.D. Cal. Oct. 29, 2013) (plaintiffs failed to “advance a viable theory employing generalized proof to establish liability with respect to the class involved.”).
• Class certification granted– Meyer v. Portfolio Recovery Associates, LLC, 696 F.3d 943 (9th Cir. 2012) (as
amended) (FCC rule requires express consent in advance and the defendant “did not show a single instance where express consent was given before the call was placed”).
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Standing
• Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)– Alleged harm must be sufficiently “concrete” to justify statutory damages
– But Congress may identify abstract harms that are nonetheless sufficiently concrete.
• Lower Court Cases Recognizing Standing after Spokeo– Ung v. Universal Acceptance Corporation, No. 15-127-RHK/FLN (D. Minn. August 5,
2016) (collecting cases).
– Van Patten (9th Cir. 2017) (holding that “Congress identified unsolicited contact as a concrete harm, and gave consumers a means to redress this harm”).
• Cases Dismissed for Lack of Standing after Spokeo– Brinker v. Normandin's, No. 5:2014cv03007 (N.D. Cal. Feb. 17, 2017) (receipt of a single
call that went to voicemail “too minimal” to be concrete), order vacated after reconsideration in light of Van Patten (N.D. Cal. April 27, 2017).
– Romero v. Department Stores National Bank, et al., No. 15-CV-193 (S.D. Cal. Aug. 5, 2016), (reasoning that “one singular call, viewed in isolation and without consideration of the purposes of the call, does not cause any injury that is traceable to the conduct for which the TCPA created a private right of action, namely the use of an ATDS to call a cell phone”), reversed (9th Cir. February 28 2018) (unpublished decision).
• Potential future issues– Does volume matter?
– Unanswered calls?
– Voice mails?
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Picking Off/Mootness
• Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 669 (2016)– Unaccepted offer of judgment/settlement does not moot the plaintiff’s claim
– Concurrence leaves door open for argument that payment into registry of court can moot named plaintiffs’ claim and bar class certification.
• Cases holding that payment into registry of court does not moot claims– Geismann v. ZocDoc Inc., No. 14-3708 (2d Cir. Mar. 9, 2017) (holding that payment into
registry of the court did not moot claim because district court did not enter judgment).
– Wendell H. Stone Company, Inc. v. Metal Partners Rebar LLC, No. 16-8285 (N.D. Ill. Dec. 5, 2016) (no mootness because the court did not enter judgment).
– Chen v. Allstate Ins. Co., 819 F. 3d 1136 (9th Cir. 2016) (conditional payment into registry of court was not sufficient to moot claims).
• Cases holding claims moot after Campbell-Ewald– Leyse v. Lifetime Entertainment Servs., No. 13 Civ. 5794 (AKH), 2016 WL 1253607
(S.D.N.Y. March 17, 2016) (“[O]nce the defendant has furnished full relief, there is no basis for the plaintiff to object to the entry of judgment in its favor. A plaintiff has no entitlement to an admission of liability, as a party can always incur a default judgment and liability without any factual findings.”), aff’d (2d Cir. Feb. 15, 2017).
– Radha Geismann, M.D., P.C. v. ZocDoc, Inc., 268 F. Supp. 3d 599 (S.D.N.Y. 2017) (dismissing on mootness grounds after entry of judgment) (currently on appeal to the Second Circuit).
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Ascertainability
• Granting Class Certification– Sandusky Wellness Center, LLC v. Medtox Scientific, Inc., 821 F.3d 992 (8th Cir. 2016) (finding that
recipients of faxes were “clearly ascertainable” because the recipient is the person who subscribes to the fax number).
– Birchmeier v. Caribbean Cruise Line, Inc., Case No. 12 C 4069 (N.D. Ill.) (“plaintiffs need not establish that the people who received the calls at the numbers on the list of 930,000 were the actual subscribers; the fact that they received calls is enough to permit them to sue.”).
• Denying Class Certification– Leyse v. Lifetime Entertainment Servs, LLC, Nos. 16-1133 and 16-1425, (2nd Cir. Feb. 15, 2017)
(unpublished) (upholding district court’s decision to deny class certification because class members could not be identified).
– Gannon v. Network Telephone Services, Inc., 628 Fed. Appx. 551 (2016) (unpublished) (finding trial court did not abuse discretion in denying class certification on ascertainability grounds where it would be extremely difficult to identify recipients of text messages who had failed to consent).
– Zarichny v. Complete Payment, No. 2:14-cv-03197 (E.D. Pa. Jan. 21, 2015) (striking class allegations because proposed class was impermissible “failsafe” class).
– Balschmiter v. TD Auto Fin. LLC, No. 13-cv-1186 (E.D. Wisc. Nov. 20, 2014) (denying class certification because plaintiff’s sole theory was that individualized issues regarding consent and because of ascertainability problems associated with “reverse lookup” process).
– Brey Corp. (t/a Hobby Works) v. LQ Management LLC, No. 11-cv-00718 (D. Md. Jan. 29, 2014) (denying class certification on ascertainability grounds because individual class members would have to submit affidavits claiming that they received offending faxes).
• Additional Discovery Required– Smith v. State Farm Mutual Automobile Insurance Co., No. 1:13-cv-02018 (N.D. Ill., Jan. 13, 2015)
(refusing to strike class allegations on the ground that the proposed class was an impermissible “failsafe” class and permitting discovery).
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Is the Communication Covered?
• Calls using live operators
• Do Not Call Registry• Company-Specific
• National Do Not Call List
• ATDS Issues
• Non-residential lines
– Bank v. Independence Energy Group LLC, No. 1:12-cv-01369 (E.D.N.Y. Oct. 2, 2014) (identifying potential factual issues).
• Noncommercial calls to land lines
– E.g. nonprofit, informational calls.
– Note distinction between mobile phones and land lines.
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No Class Actions for Statutory
Penalties?
• Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co., 130 S. Ct. 4131 (2010) (New York prohibition on class actions was a procedural rule not applicable in federal courts sitting in diversity jurisdiction).
• Holster v. Gatco, Inc., 618 F.3d 214 (2d Cir. 2010) (§ 227(b)(3) is “a delegation by Congress to the states of considerable power to determine which causes of action lie under the TCPA” and therefore New York statute’s prohibition on statutory penalty class actions applies in TCPA cases as a matter of federal law).
• Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 745 (2012) (federal question jurisdiction exists over TCPA claims).
• Federal courts following Mims interpret it as implicitly overruling Holster. E.g.,– Bank v. Independence Energy Group LLC, No. 13-1746-cv (2d Cir. Dec. 3,
2013) (vacating and remanding district court’s order dismissing action based on § 901(b));
– American Copper & Brass, Inc. v. Lake City Industrial Products, Inc., No. 13-2605, (6th Cir. 2014) (reaching similar conclusion under Michigan law).
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Superiority/Suitability
• Know your jurisdiction– TCPA precedent (may not be dispositive because many jurisdictions are split).
– Local small claims procedures.
• Class actions not superior given availability of statutory damages– Local Baking Prods., Inc. v. Kosher Bagel Munch, Inc., 421 N.J. Super. 268, 23 A.3d 469,
473–77 (N.J. Super. Ct. App. Div. 2011) (summarizing cases from various jurisdictions and holding that class actions were not superior because a small claims case can be brought in New Jersey for far less than $500).
• Superiority can be met in TCPA cases– A&L Industries Inc. v. P. Cipollini Inc., No. 2:12-cv-07598 (D.N.J. Oct. 2, 2013) (unpublished)
(criticizing Local Baking Products and citing contrary federal cases).
– Reliable Money Order, Inc. v. McKnight Sales Co., Inc., 281 F.R.D. 327 (E.D. Wis. 2012) (reaching opposite conclusion based in part on the absence of express statutory language precluding class actions).
• The argument that potentially annihilating exposure makes class action not superior is out of favor– See, e.g., Critchfield Physical Therapy v. Taranto Group, Inc., 263 P.3d 767 (Kan. 2011).
• Due process– Alternative to superiority argument when there is potential “annihilating” liability.
– May not be ripe until after class certification or even until after judgment. See Parker v. Time Warner Enter. Co., 331 F.3d 13, 21-22 (2d Cir. 2003).
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Other Issues/Defenses
• Statutes of Limitation– Ewing Indus. Corp. v. Bob Wines Nursery, Inc., No. 14-13842 (11th Cir. Aug. 3, 2015)
(no “piggybacking” of class actions to avoid statute of limitations).
• Constitutionality of FCC Regulations– Nack v. Walburg, No. 11-1460 (8th Cir. May 21, 2012) (raising questions about the
FCC’s authority).
– Murphy v. DCI Biologicals Orlando, LLC, No. 14-10414 (11th Cir. Aug. 20, 2015); Mais v. Gulf Coast Collection Bureau, Inc., No. 13-14008 (11th Cir. Sept. 29, 2014) (finding that FCC interpretation cannot be challenged outside of rulemaking).
• First amendment– Gomez v. Campbell-Ewald Co., No. 13-55486 (9th Cir. Sept. 19, 2014) (rejecting
challenge).
• Arbitration Agreements– Andermann v. Sprint Spectrum LP, No.14-3478 (7th Cir. May 11, 2015) (arbitration
agreement valid despite assignment of interest by original company).
– Knutson v. Sirius XM Radio Inc., No. 12-56120 (9th Cir. Nov. 10, 2014) (finding arbitration agreement invalid).
• Typicality and Adequacy– Labou v. Cellco Partnership, 2014 WL 824225 (E.D. Cal. March 3, 2014) (denying
certification because plaintiff was not a Verizon customer and therefore was not typical of the class and unique factual issues made the plaintiff an inadequate representative).
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Practical Considerations
• Political Changes – Will FCC reverse course?
• CAFA – Do you really want to remove?
• Settlement – Don’t assume plaintiffs’ counsel is holding out for a huge payday.
• E-discovery – Preservation of recordings, consent data – failure to preserve could result in sanctions affecting class certification defenses.
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