Marc Roth and HealthCrowd Present Webinar on TCPA and Health Communication Compliance, Mar. 17
Back in July 2015, the FCC issued their Declaratory Ruling and Order on the Telephone Consumer Protection Act, which left many in the healthcare community asking, "What does it mean for us? How does it impact our member engagement?" On Thursday, March 17, Marc Roth, partner and co-chair of Manatt's TCPA Compliance and Class Action Defense practice, will join HealthCrowd's CEO and Founder Neng "Bing" Doh to present an in-depth look into how to better understand the ruling, how it impacts member outreach, and what other leaders in the healthcare community are doing to comply with the regulations. To register for this free webinar "TCPA 2.0 - Navigating the World of Health Communication Compliance," click here.
FCC Confirms Different TCPA Liability Analysis for Text, Fax Broadcasters
Denying a petition filed by Club Texting, Inc., the Federal Communications Commission said it will keep its current liability analysis under the Telephone Consumer Protection Act, which separates text broadcasting from fax broadcasting.
Regulations promulgated by the FCC provide that a fax broadcaster will be liable as the "sender" of an unlawful fax under the TCPA only "if it demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such facsimile transmission."
Club Texting, Inc., provides a software platform for companies to contact a target audience via text message. In 2009 the company filed a petition with the FCC for a declaratory ruling asking the Commission to clarify that text broadcasters like itself should be treated consistently with fax broadcasters with regard to liability under the TCPA.
Aside from the technological characteristics of the medium, companies like Club Texting are identical to fax broadcasters, the petitioner argued, and liability should attach only if a text broadcaster "demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such transactions."
Clarifying the liability standard would promote compliance, the company added, because its clients are in the best position to ensure that recipients have consented to receive the text messages.
The Commission requested public comment on the issues and received six responses, the majority of which opposed granting the requested declaratory ruling, the FCC said. Concerns were raised about the difficulty identifying the third-party clients of text broadcasters, as well as the fact that the TCPA does not mandate an opt-out notice or sender identification on autodialed text messages. Commenters contended that if the text broadcaster cannot be held liable, then wireless consumers could be left without the ability to enforce the TCPA requirements against any responsible party.
While the petition was still pending, however, the FCC issued its long-awaited omnibus Declaratory Ruling and Order last July, addressing several issues under the TCPA, including liability for text broadcasters.
"Specifically, a 'direct connection between a person or entity and the making of a call' can include 'tak[ing] the steps necessary to physically place a telephone call.' It also can include being 'so involved in the placing of a specific telephone call' as to be deemed to have initiated it," the Commission wrote in the July order. "Thus, we look to the totality of the facts and circumstances surrounding the placing of a particular call to determine: 1) who took the steps necessary to physically place the call; and 2) whether another person or entity was so involved in placing the call as to be deemed to have initiated it, considering the goals and purposes of the TCPA. … Similarly, whether a person who offers a calling platform service for the use of others has knowingly allowed its client(s) to use that platform for unlawful purposes may also be a factor in determining whether the platform provider is so involved in placing the calls as to be deemed to have initiated them."
The omnibus order settled the issue, the FCC wrote. "[T]he Commission has concluded that the determination as to who is liable as the person who 'makes' or 'initiates' a particular robocall (including an autodialed text message) requires a fact-based determination governed by factors such as which party takes the 'steps necessary to physically place' that call and the extent and nature of involvement by others, including the provider of the calling platform used to make the call," the FCC explained.
Confirming that the July order is the applicable standard for determining text broadcaster liability for TCPA violations, the FCC denied Club Texting's petition.
To read the FCC's order, click here.
Why it matters: The Commission has made clear that text broadcasters are subject to a different standard of liability than fax broadcasters under the TCPA, and that the totality of facts analysis adopted in the FCC's July 2015 Declaratory Ruling and Order will be the standard used to determine a text broadcaster's involvement in and potential liability for a wrongful text campaign. The denial of Club Texting's petition did not elaborate on the text broadcasting standard beyond the July 2015 order or provide any additional guidance to businesses.
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To Settle TCPA Suit, Mortgage Company Agrees to Pay $7.4M
In the latest multimillion-dollar settlement of a Telephone Consumer Protection Act class action, Mortgage Investors Corporation agreed to pay $7.4 million to a class of more than 3 million individuals for millions of unsolicited phone calls.
In Oregon federal court, a pair of plaintiffs alleged that MIC targeted veterans with repeated calls about refinancing options for home loans, despite the fact that many call recipients had their numbers on the federal Do Not Call Registry and had not provided prior express consent.
The parties reached a deal last summer and U.S. Magistrate Court Judge Janice M. Stewart granted final approval in early 2016. Pursuant to the agreement, MIC will pay $7,483,600 into a settlement fund to cover cash awards to settlement class members, court-approved attorney fees up to $1,870,900 and litigation expenses up to $147,063, notice and administration costs of $1,190,000, and incentive awards for the named plaintiffs of $5,000 each.
If any amounts remain in the fund as a result of uncashed checks, the money will be disbursed on a cy pres basis to the Veterans Airlift Command and Consumer Federation of America, with no reversion to MIC.
Of the more than 3 million class members, none objected to the settlement and only 52 opted out. A total of 30,289 submitted claims resulted in an award of roughly $140.86 per class member.
Judge Stewart deemed the settlement agreement "fair, adequate and reasonable," granting final approval to the deal.
Although she found the hourly rates charged by class counsel to "greatly exceed" what the court would award for similar work performed by attorneys of comparable skill, experience, and reputation in the community—and that the hours appearing in the time records were excessive—she nevertheless granted the fee award. Accounting for the risk the plaintiff's attorneys assumed when taking the case on a contingent fee basis, she applied a multiplier and found the attorney fees "not unreasonable."
To read the opinion and order in Ott v. Mortgage Investors Corporation, click here.
Why it matters: Mortgage Investors Corporation joins an ever-expanding list of companies that have agreed to pay millions of dollars to end a TCPA class action. Other deals have ranged from the record-setting $75 million paid by Capital One to more than 17.5 million class members to a $40 million agreement by HSBC to Western Union's $8.5 million settlement that was reportedly the largest per-class-member payout in a TCPA suit at up to $650 per class member after payment of attorney fees and costs. Also noteworthy is the Court's approval of plaintiff counsel fees, despite its finding that the hours spent on the case leading up to settlement were "excessive."
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New TCPA Suit Focuses on Texts Sent After Opt-Out, Extra Messages
Telephone Consumer Protection Act suits show no signs of abating, with a new putative class action suit challenging text messages that were sent after a consumer allegedly opted out of the program.
In the suit, Philip Nghiem accused Dick's Sporting Goods of violating the TCPA by continuing to send text messages after he elected to stop receiving them. The California resident enrolled in Dick's mobile alert program by text messaging the word "JOIN" to the specified short code in May 2015. He opted out of the program on December 6, 2015, according to the complaint, by texting the word "STOP" to the same short code and received a confirmation message that he had been unsubscribed.
Despite his request, the defendant texted him eight more times, Nghiem said, in violation of the TCPA. Seeking to certify a nationwide class of "hundreds, if not thousands" of class members, the suit requests treble damages for each text. It's unclear whether the additional texts were sent because Dick's experienced technological problems.
To read the complaint in Nghiem v. Dick's Sporting Goods, click here.
Why it matters: While the volume of TCPA litigation shows no signs of slowing down, this complaint focuses on perhaps a new trend of litigation—a violation of the statute where a consumer opted out from his earlier consent to receive marketing materials, but continued receiving marketing messages by text.
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Ninth Circuit Affirms TCPA Dismissal Based on Express Consent
The Ninth Circuit Court of Appeals affirmed dismissal of a Telephone Consumer Protection Act class action, agreeing with a California federal court judge that the defendant could not be liable under the statute because the plaintiff provided express consent to be contacted.
Shaya Baird booked flights online for herself and her family on the Hawaiian Airlines website. During the process, Baird was presented with spaces to enter a number for a mobile phone, home phone, or work phone with the statement, "At least one phone number is required." Baird entered her cell phone number.
Three weeks later and about one month before her departure, Baird received a text message from Sabre, Inc., a travel technology company that contracted with Hawaiian, offering to provide flight notification services if she replied "yes." Baird's response to the text: a putative class action complaint filed in California federal court alleging that Sabre violated the TCPA by sending her an unsolicited text message.
Sabre moved for summary judgment. The defendant argued that Baird consented to receive the text message by voluntarily providing her cell phone number during the online reservation process, even though the number was provided to Hawaiian Airlines and not to Sabre.
The district court agreed and Baird appealed to the Ninth Circuit.
Affirming summary judgment in favor of the defendant, the court relied upon the Federal Communications Commission's 1992 Order prescribing regulations for the TCPA. The agency determined that "persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary."
With the validity of the FCC's interpretation of "prior express consent" not at issue, the Ninth Circuit said the 1992 Order made the appeal easy.
"Baird expressly consented to the text message in question when she provided Hawaiian Airlines with her cellphone number," the federal appellate panel wrote. "Baird knowingly released her phone number to Hawaiian Airlines while making a flight reservation. She did not provide any 'instructions to the contrary' indicating that she did not 'wish[] to be reached' at that number. Therefore, according to the 1992 Order, Baird provided 'prior express consent' to receive the text message in question."
The court also distinguished Satterfield v. Simon & Schuster, Inc., where a panel of the Ninth Circuit concluded that a person's consent to receive calls from one business does not constitute consent to receive calls from a different business. Although a similar situation existed in the Sabre case—Baird provided her phone number to Hawaiian Airlines, but was contacted by Sabre—a key difference existed.
"Sabre is a vendor for Hawaiian Airlines and contacted Baird regarding her reservation," the court wrote in a footnote, and the record in Satterfield revealed no direct contractual relationship between the entity that contacted the plaintiff and Simon & Schuster. "The district court made no distinction between Sabre and Hawaiian Airlines because of the relationship between the companies, and Baird does not make any argument based on this distinction."
To read the memorandum in Baird v. Sabre, Inc., click here.
Why it matters: The Ninth Circuit affirmed the district court's commonsense approach to providing consent and recognized that as a vendor of Hawaiian Airlines, Sabre was able to rely on the consent provided to the airline as prior express consent for the calls it made in connection with the plaintiff's flight.
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