In one of the largest settlements in history under the Telephone Consumer Protection Act (“TCPA”), Sirius XM Radio Inc. agreed to pay $35 million to resolve putative class actions filed throughout the country alleging that it had used an automatic telephone dialing system to engage in telemarketing to trial users of its satellite radio service without the consent of consumers.
The deal, announced in a status report filed on June 30, 2016, aims to resolve cases filed in the United States District Courts for the Eastern District of Virginia (Hooker v. Sirius XM Radio Inc.), Southern District of California (Knutson v. Sirius XM Radio Inc.), Northern District of Illinois (Elikman v. Sirius XM Radio Inc.), and Middle District of Florida (Parker v. Sirius XM Radio Inc.).
In Hooker, Sirius XM had previously unsuccessfully attempted to stay the case pending the United States Court of Appeals for the District of Columbia Circuit’s resolution of a challenge to the Federal Communications Commission’s July 2015 Order interpreting the TCPA.
As part of the deal, Sirius XM will pay $35 million into a fund from which class members can either take a cash payment or instead choose three months of Sirius XM Select service. In addition to the financial component, Sirius XM has pledged to modify the “system architecture” used by its telemarketing call center vendors. The parties are expected to submit a motion for preliminary approval of the settlement by July 11, 2016. At that time, the court will consider the terms of the settlement and decide whether the notice and opt-out period can commence.
Even with the Supreme Court’s recent decision in Spokeo v. Robins, Inc. requiring “concrete harm” in order for plaintiffs to bring suit, the settlement demonstrates that big-dollar TCPA settlements are not yet a thing of the past, and that companies utilizing outbound call campaigns still must maintain diligent compliance regimes in order to minimize potential liability.
Troutman Sanders LLP has unique industry-leading expertise with the TCPA, with experience gained trying TCPA cases to verdict and advising Fortune 50 companies regarding their compliance strategies. We will continue to monitor regulatory and judicial interpretation of the TCPA in order to identify and advise on potential risks.