TCPA in Review; 2015 Was a Year of Clarification

David Kleber

In 2015, the courts clarified much in defining the Telephone Consumer Protection Act (TCPA). From expanding the parties who can bring an action, to expanding the definition of Automatic Telephone Dialing System (ATDS), to increasing the potential damages which may be claimed, 2015 court opinions increased the potential pool of litigation under the TCPA.

Who has standing to file a TCPA claim?

The courts discussed who has standing to file a TCPA claim. The Southern District of New York confirmed that the “called party” refers to the party actually called and not the party intended to be called. In King v. Time Warner Cable, No. 14 Civ.2018(AKH) (SD NY) July 2015, the Defendant  sent prerecorded messages to a delinquent customer using an interactive voice response (IVR) system. The phone number to which the messages were sent was provided by the customer. Defendant would have had the consent of that party to send messages to that number. However, when the messages were sent, the number was for a cell phone belonging to Plaintiff, an unrelated party. The court found that the new holder of the number had standing to file a claim under the TCPA since “called party” clearly refers to the party actually called and not the party intended to be called. The consent of the prior owner of the number offers no protection to the caller.

The 3^rd circuit widely expanded the definition of “called party” in October when it found that a co-resident of the called party had standing to bring a claim. In Leyse et al v. Bank of America

No. 14-4073 (3rd Cir.) Oct 14, 2015, the Court reversed the dismissal of the case by the District Court, holding that the intent of the caller had no bearing on who was the “called party” for standing purposes. The Court wrote that “a regular user of the phone line who occupies the residence being called undoubtedly has the sort of interest in privacy, peace, and quiet that Congress intended to protect.” Defendant called Plaintiff’s roommate and left a pre-recorded message allegedly in violation of the TCPA. Although Plaintiff was not the intended recipient, the court ruled that Plaintiff could file a claim when he received the message. If the caller had the intended recipient’s prior express consent, it would be protected against claims of incidental recipients, but without the prior express consent of the intended recipient, any actual recipient of a pre-recorded message can file suit under the TCPA so long as they fall within the “zone of interest protected by the Act.”

What constitutes an ATDS?

The courts also discussed what constitutes an ATDS. Capacity of the relevant equipment remains the critical issue, but the inquiry has changed regarding the capacity required. The courts have moved away from discussing “random or sequential number generators” as written in the statute. Instead, the courts focused on the capacity to make calls without “human intervention.”

In February, the Northern District of California decided that text messages sent as part of a group messaging application did not qualify as an ATDS using the “human intervention” standard. In Glauser v. GroupMe, Inc. No. C 11-2584 PJH. (ND CA) Feb, 2015, the court found that the definition of ATDS includes any equipment with the capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists. The court found for Defendant on the facts of this case, because the group’s creator was required to manually enter the numbers of the members in order to include them in the text messaging. The Court found the relevant texts were therefore sent as a direct response to human intervention.

In August, the same District Court revisited the question of human intervention in Luna v. SHAC, LLC, dba Sapphire Gentlemen’s Club; et al. No. C14-00607 HRL. (ND CA) Aug 2015. Here, Defendant sent promotional text messages to its customers. Plaintiff claimed he received unwanted messages from Defendant. The court found that the Hobbs Act requires the court to look to FCC rulings in addition to the TCPA itself in order to determine whether Defendant’s equipment qualifies as an ATDS. Under this analysis, the court found that “internet-to-phone text messaging technology” is expressly included in the definition of ATDS. The court found for Defendant on the facts of this case because there was human intervention in sending the messages. The court found that the human intervention in this case was even greater than that in Glauser v. GroupMe, Inc. and McKenna v. WhisperText. The “human intervention” was not limited to the act of uploading the telephone number to the database, but it included “drafting the message, determining the timing of the message, and clicking “send” on the website to transmit the message to Plaintiff.”

Across the country in New York, the District Court also found that human intervention was the key to defining an ATDS and not random or sequential generation of numbers. In King v. Time Warner Cable, No. 14 Civ.2018(AKH) (SD NY) July 2015, the Court ruled that Defendant’s IVR system was an ATDS because it dialed numbers without human intervention, even if those numbers were not randomly or sequentially dialed. Further, since the violation was to “make any call…,” even unanswered calls constituted violations. The Court held that Time Warner violated the TCPA when it continued calling Plaintiff’s number after she informed Defendant that she was not the intended recipient and requested the calls cease. All calls after that time were willful violations authorizing treble damages.

The 3^rd Circuit considered the 2014 case of Dominguez et al. v. Yahoo, Inc. on appeal from the Eastern District of Pennsylvania (14-1751 (3rd Cir) October, 2015) and expanded the definition of ATDS.  Here, Plaintiff received text messages from Yahoo on his cell phone. These e-mail notification messages were requested by the prior holder of Plaintiff’s cell phone number. There is no question that the messages were not sent to randomly or sequentially generated numbers, but to specific customers who opted in to the service and provided their numbers. The court ruled that because the telemarketing industry has changed its tactics, the “random or sequential number generator” language in the statute is no longer applicable. The Court adopted what it found to be the FCC position that neither “present ability” of the equipment nor the use of a single piece of equipment is required to qualify as an ATDS. So long as the equipment is part of a “system” that has the latent “capacity” to place autodialed calls, the statutory definition of ATDS is satisfied. The Court found an issue of fact existed as to whether the equipment in question had this “capacity.” The Court found since the defendant’s expert did not sufficiently define “capacity” in his affidavit, his opinion was a “legal conclusion” insufficient for summary judgment.

Some courts did find some limit to what is considered an ATDS.

A District Court in California found that a call individually placed from a desktop telephone did not qualify as an ATDS. In Freyja v. Dun & Bradstreet, Inc. CV 14-7831 DSF (MRWx) CD California (October 14, 2015), the court held that the phone itself could not be used as an autodialer. Although the phone could have been used to receive calls from an autodialer if properly configured, it did not constitute an ATDS as it existed when the call was placed.

Similarly, in Modica v. Green Tree Servicing, LLC No. 14 C 3308. (ND, IL) April, 2015, the Court held that when the agent did not log in to the dialer, the call she placed was not from an ATDS. Although she had the capacity to log in to a dialer to place the call, she did not do so, and the equipment she did use to make the call did not qualify as an ATDS.

What constitutes consent?

Courts also addressed the issue of consent to be called. The 11^th Circuit held that voluntarily providing a cell number to the caller constituted express consent for that caller to use that cell number. In Murphy, et al. v. DCI, et al. No. 14-10414 (11th Cir) Aug 20, 2015, the Court held that  Defendant’s text messages to Plaintiff’s cell number did not violate the TCPA because the caller had prior express consent as a result of Plaintiff providing that number on an initial information form.

The Illinois District Court confirmed that the requisite consent must be expressed and must be prior to the contact. In Modica v. Green Tree Servicing, LLC No. 14 C 3308. (ND, IL) April, 2015, the plaintiffs were husband and wife. Defendant obtained one Plaintiff’s cell number when she called them. Capturing the number by caller ID does not constitute sufficient consent under the TCPA. The other Plaintiff allegedly provided consent during a telephone conversation. That consent, however could not protect Defendant from calls it made prior to the consent.

A District Court in Florida addressed the issue of revocation of consent. It found, in Miceli v. Orange Lake Country Club, Inc. 6:14-cv-1602-Orl-41DAB (MD FL) August, 2015, that an attorney’s letter of representation containing a blanket revocation of consent could be effective in revoking prior express consent to call a cell phone. The court found that there is no requirement that a debtor use any particular language to notify a debt collector that he is represented by legal counsel and that the letter of representation was sufficient to allege that Debtor’s prior consent to call his cell phone was revoked. This alleged revocation of consent was sufficient to allege a willful violation of the TCPA.

Finally, the 11^th Circuit held that TCPA violations are $500.00 per violation and not per call. In Lary v. Trinity Physician 780 F.3d 1101 (11th Cir) March 2015, Plaintiff alleged a single call constituted multiple violations because it was both an unsolicited advertisement and a call to an emergency telephone line. The Court held that there is no language in 227(b)(1) limiting recovery of $500 per call or fax.