On Friday, October 26th, from 2 – 3 pm ET, Troutman Sanders attorneys, David Anthony, Dave Gettings and Virginia Flynn will present a webinar that will help you make sense of the shifting TCPA landscape. It will focus on the different ways courts throughout the country have addressed the interpretation of an automatic telephone dialing system (“ATDS”) since ACA International, how courts have treated previously-binding orders from the Federal Communications Commission (“FCC”), and the different ways courts have handled motions to stay pending future guidance from the FCC. This webinar will help you attack current TCPA claims you may be facing and plan for TCPA claims you are trying to avoid.

Scheduling conflict? Register to receive the recording after the webinar. 

One hour of CLE credit is pending.

To register, click here.

On July 4, 2017, W. Va. Code § 46A-5-108 went into effect, requiring West Virginia consumers to send a written “Notice of Right to Cure” to a creditor or debt collector prior to instituting any action under Articles 2, 3, or 4 of the West Virginia Consumer Credit and Protection Act (the WVCCPA).  The full text of the current statute can be accessed here. 

After receipt of the Notice of Right to Cure, creditors and debt collectors are provided 45 days to send a cure offer to the consumer.  If the consumer accepts the cure offer and the offer is performed, it is a complete bar to recovery if a consumer later files a cause of action for the alleged violation.  Likewise, if the court finds that a cure offer is timely delivered and above the judgment that a consumer receives, the consumer’s counsel is barred from collecting attorneys fees and costs incurred following delivery of the cure offer. 

Implementation of the pre-suit notice requirement has raised multiple questions for courts and creditors alike.  Although intended to add clarity and to enable creditors to address any potential errors or violations of the WVCCPA, the provision has created more questions than answers, and it remains to be seen if the intent to allow creditors and consumers to avoid costly and time-consuming litigation will be realized. 

First, the statute is silent on whether a consumer can first file suit and then send the Notice of Right to Cure, requiring the creditor to then send a cure offer in 20 days under the provisions set forth in subsection (a) of § 5-108.  It appears that the legislature only intended this provision to apply when the creditor has filed a suit and the consumer is the would-be defendant.  However, as § 5-108 currently reads, the lack of clarity in the statute has been seen as an invitation for the consumer to engage in such conduct. 

Second, the effect the statute will have on individual claims for potential class representatives is still unknown.  Can the consumer demand a settlement on behalf of a class prior to class certification?  What is the effect of a rejected cure offer to a class representative’s claim if he or she does not individually recover a judgment above the individual cure offer amount?  Are creditors and/or debt collectors required to address potential class claims in a cure offer?  Once a class is certified, does the creditor or debt collector have an opportunity to send a classwide cure offer to all potential class members?  To date, these questions remain unanswered. 

Third, internal compliance procedures for companies conducting business in West Virginia should be updated to ensure that consumer notices are being addressed by either their legal departments or by referring the potential claim to their outside counsel to address and make recommendations to evaluate and respond to § 5-108 correspondence from consumers. 

The Financial Services Litigation group at Troutman Sanders has handled hundreds of contested matters in West Virginia, including class action cases, and arbitrations through appeal to the Fourth Circuit.  We will continue to monitor the effects of § 5-108 in West Virginia federal and state courts to identify and advise on new compliance risks and strategies.

In the last few years, the right to privacy debate in the United States has increased in pace and volume. One issue at the center of this long debate is how best to implement the right privacy tools in a manner that does not disrupt business and technological innovation. The current criticisms fail to appreciate that the next technological paradigm is completely dependent on both the quality and quantity of data.

As connected things (IoT) explode in popularity, they make things such as augmented reality (AR) and autonomous vehicles possible. And as interconnectivity grows, so too do the opportunities. The companies that fail to properly leverage new technologies and data opportunities may find themselves falling behind their competitors.

In venturing into these emerging paradigms, companies should stay informed of recent enforcement actions, cases, and laws to determine how their role within new ecosystems may be impacted.

This publication covers the ongoing evolution of the legal landscape for data-centric products, so that organizations can continue to succeed in their development of data-centric products.

Click here to download the report

On September 10, the Court of Appeals for the Third Circuit in Long v. Southeastern Pennsylvania Transportation Authority ruled that a group of plaintiffs lacked standing to assert claims brought under the Fair Credit Reporting Act relating to the defendant’s failure to provide statutorily-required information about their basic FCRA rights. The plaintiffs in Long alleged that SEPTA violated the FCRA’s pre-adverse action notice provision by terminating their employment without first providing them with (i) a copy of their background reports, and (ii) information about their rights under the FCRA.

Relying on the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, the Third Circuit held that the plaintiffs had standing for the first alleged violation because they had a right to see the background reports before any adverse action was taken against them, despite not alleging any actual inaccuracies in their reports.

However, the court ruled that the plaintiffs lacked standing for the second alleged violation –their failure to receive information about their basic FCRA rights – which the court deemed a “bare procedural violation, divorced from any concrete harm.”  In so ruling, the Third Circuit noted that the plaintiffs were able to learn about their rights under the FCRA and were able to file their lawsuit within the FCRA’s two-year statute of limitations regardless of any disclosure failure on SEPTA’s part.

Troutman Sanders will continue to monitor these developments and provide any further updates as they are available.

On October 1, the State of Michigan will join more than 150 cities and counties as well as over 32 states in enacting a ban-the-box policy that prohibits asking job applicants if they have been convicted of a felony in an initial application. The policy applies to Michigan state positions and public employees, not private employers. The question will remain on applications where state law does not allow former felons from being licensed, such as in the healthcare field.

Michigan Governor Rick Snyder is encouraging private employers to follow suit.  Currently, eleven states require the removal of criminal history questions from job applications for private employers.

Troutman Sanders will continue to monitor related legislative developments concerning employment background screening and employee hiring.

On August 16, Judge Freda L. Wolfson of the District of New Jersey ruled that a consumer plaintiffs claim that insurance language overshadowed the required debt validation warning can proceed.  In the case of Morello v. AR Resources, Inc., the named plaintiff Wayne Morello received a collection letter arising from a medical debt.  That letter contained a standard validation notice pursuant to § 1692g of the Fair Debt Collection Practices Act, informing Morello that he must dispute the validity of the debt.  Above this notice, the defendant debt collector, AR Resources, included the following sentence: If you carry any insurance that may cover this obligation, please contact our office at the toll-free number above.  Morello sued, claiming this sentence overshadowed the debt validation notice and, consequently, violated the FDCPA.  The defendants filed a motion to dismiss, which Judge Wolfson denied.

In denying the motion to dismiss, Judge Wolfson engaged in a detailed discussion of Third Circuit precedent involving these types of overshadowing claims.  She found that precedent dictated that debt collectors must not merely include the validation notice but also convey the terms of that notice effectively.  Judge Wolfson analyzed three cases from the Third Circuit Court of Appeals on this point: Graziano v. Harrison, Caprio v. Healthcare Revenue Recovery Grp., LLC, and Laniado v. Certified Credit & Collection Bureau.  The letter in Graziano contained a validation notice and a threat to take legal action within ten days unless the debt was resolved.  The Graziano court found that the juxtaposition of two inconsistent statements rendered the statutory notice invalid under § 1692g.  In Caprio, the front of the letter contained a statement requesting that the consumer call if he believed he did not owe the debt (with please call in bold typeface).  The debt validation notice was on the back of the letter.  The Third Circuit found this could lead the least sophisticated consumer to believe he could call to dispute the debt, thereby inadvertently waiving his right to dispute the debt because such disputes must be in writing.  Lastly, Judge Wolfson found that Laniado followed Caprio by inviting the consumer to call the debt collector “should there be any discrepancy.

Judge Wolfson then cited one of her previous decisions, rendered in Kassin v. AR Res., Inc., to find that the insurance language here overshadowed the debt validation notice.  Judge Wolfson reasoned that the language could lead the least sophisticated consumer who thinks that they do not owe the debt because they have insurance that should cover it to call the debt collector and inadvertently waive their right to dispute the debt in writing.  In other words, a debtor may mistakenly believe he or she could dispute the debt via telephone if the dispute was based on insurance coverage.  Judge Wolfson then distinguished her ruling from rulings in Cruz v. Fin. Recoveries (District of New Jersey) and Anela v. AR Res., Inc. (Eastern District of Pennsylvania).  She noted the insurance language in question in those cases was found to address resolving the debt, compared to disputing the debt.  In short, the insurance language in Cruz and Anela invited the consumer to call to provide information about insurance that could cover the debt.  Because she found the language in question in Morello to be more closely related to disputing the debt, there was a possibility that it could mislead the least sophisticated consumer.  For that reason, she denied the defendants motion to dismiss and strongly suggested she would rule in the plaintiffs favor at the dispositive phase of the trial.


In several weeks, the U.S. Securities and Exchange Commission will release its annual enforcement results, and speculation about the trajectory of the SEC’s Division of Enforcement will resume in full force.

The results will reflect enforcement activity from the first full fiscal year of Jay Clayton’s tenure as SEC chairman. In the 16 months since Clayton’s swearing in, there have been repeated questions about how vigorously the Division of Enforcement is policing the U.S. capital markets. Naturally, following Mary Jo White’s “bold and unrelenting” enforcement agenda, many expected a decline in enforcement activity under Clayton.

There has, in fact, been a dip in the number of SEC enforcement actions during Clayton’s tenure, but the decline has not been as precipitous as many anticipated. And the decline in enforcement activity does not tell the whole story of the current enforcement program. There have been marked changes in priorities and tone and subtle shifts in the mix of cases coming out of the commission.

To read full article go to Law360


Executive Summary

  • On September 20, 2018, the Ninth Circuit in Marks v. Crunch San Diego, LLC (Case: 14-56834), overturned a lower court’s ruling that a text messaging system was not an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA), holding instead that the statutory definition of an ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.
  • The Court found that because the language of the TCPA was ambiguous, it used canons of construction, legislative history, and the statute’s overall purpose in determining that a system only needs to store numbers and then dial them automatically to qualify as an ATDS.
  • The Court declined to follow the Third Circuit’s opinion in Dominguez v. Yahoo, Inc., noting the decision unpersuasive as it contained an “unreasoned assumption that a device must be able to generate random or sequential numbers in order to qualify as an ATDS” and “merely avoided the interpretive questions raised by the statutory definition of ATDS.”
  • Many anxiously await the Federal Communication Commission’s (FCC) updated ruling on the definition of an ATDS because its omnibus overhaul will certainly be guided by the analytical framework set forth in the D.C. Circuit’s opinion, and the new Chairman has questioned many of the FCC’s interpretations that have led to the proliferation of TCPA lawsuits.


The system at issue is called the Textmunication system, which is a web-based marketing platform designed to send promotional text messages to a list of stored telephone numbers. Phone numbers can be input manually or automatically. Crunch Fitness communicates with its prospective and current gym members by sending text messages through the Textmunication system, which, after a Crunch Fitness employee logs in, selects the phone numbers, and generates the content, automatically sends the text messages to the selected phone numbers.

Marks signed up for a gym membership with Crunch Fitness in 2012. Over an eleven- month period, he received three text messages. In 2014, Marks filed a putative class action against Crunch Fitness, alleging violations of the TCPA.

The district court granted summary judgment in favor of Crunch Fitness on the ground that the system at issue did not qualify as an ATDS because it did not have the capacity to randomly or sequentially generate numbers and then dial those numbers.


After spending significant ink discussing the intent and purpose behind the creation of the TCPA, noting that much of what was written in 1991 related to the technology at the time, the Court discussed ACA International and its effect on the statute itself. The Court noted that because the D.C. Circuit vacated the FCC’s interpretation of what device qualified as an ATDS, “only the statutory definition of ATDS … remains.” (Op., p. 17-18.) Essentially, we have a blank slate. The next issue was whether the statutory text was “plain and unambiguous” or “ambiguous.”

The Court in an almost conclusory fashion found that the statutory text was confusing and thus ambiguous, as evidenced by: (1) Marks and Crunch Fitness offering competing interpretations of the language, and (2) the D.C. Circuit’s opinion finding that “‘[i]t might be permissible’ for the FCC to adopt an interpretation that a device had to generate random or sequential numbers in order to be an ATDS, or that a device could be an ATDS if it was limited to dialing numbers from a stored list.” (Op., p. 20.) The Court then looked to the context and structure of the statutory scheme as well as the statute’s overall purpose for clarification.

“Although Congress focused on regulating the use of equipment that dialed blocks of sequential or randomly generated numbers – a common technology at that time – language in the statute indicates that equipment that made automatic calls from lists of recipients was also covered by the TCPA.” In short, the Ninth Circuit held that Congress intended to regulate devices that make automatic calls. Specifically, as support for this statement, the Court noted:

  • Provisions in the TCPA allow an ATDS to call selected numbers (i.e., those who have provided prior express consent); and
  • Provisions in the TCPA permit exceptions to the statute, which allows a system that qualifies as an ATDS to automatically call specific numbers from a set list.

The Court held, therefore, that “the statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator’, but also includes devices with the capacity to dial stored numbers automatically.” In short, the definition of an ATDS means “equipment which has the capacity – (1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator – and to dial such numbers.” (Op., p. 23.)

Practical Implications

There are a few key points that must be noted:

  1. Definition of an ATDS: A severe definition of an ATDS now controls in the Ninth Circuit – absent a successful further appeal.

    What does this mean? Plaintiffs in the Ninth Circuit will likely argue that “anything qualifies as an ATDS.”

  2. Human Intervention: Many have argued (and some courts have agreed) that a system is not truly automatic when human intervention is involved. The Court here essentially found that if human intervention is minor, such as when a person “turn[s] on” or “triggers” a system to dial numbers, the system still qualifies as an ATDS. The Court noted that Congress was targeting equipment that could “engage in automatic dialing, rather than equipment that operated without any human oversight or control.” Thus, merely “flip[ping] the switch on an ATDS,” does not qualify as human intervention, nor does human intervention occur when a human adds phone numbers to a dialing platform.

    What does this mean? Companies should still argue aggressively that human intervention is a necessary part of their telephone or texting system; however, systems that require minimal human intervention may satisfy the Marks definition of an ATDS within the Ninth Circuit.

  3. Capacity: One of the hot button issues is whether capacity means “present” or “potential.” The Dominguez court (among others) found that it meant present. However, the Court here declined to “reach the question whether the device needs to have the current capacity to perform the required functions or just the potential capacity to do so.”

    What does this mean? We continue to live in a world of uncertainty and doubt (at least in the Ninth Circuit), but we take it as a good sign that the Court did not speak to this issue. The trend has been present capacity and we are hopeful that the FCC will cement that in the future.

  4. Possible FCC action: The FCC is currently considering new interpretations of the TCPA in light of ACA International. If nothing else, Marks has raised the stakes of FCC action even higher. All eyes are on the FCC; many are expecting the FCC to issue its new interpretation after the mid-terms, perhaps by the end of the year.

Overall, the Court’s opinion in Marks is a reminder that the TCPA is alive and well. Plaintiff’s lawyers will continue to file litigation and companies will need to continue their strong efforts of TCPA compliance.

On September 19, the Eleventh Circuit Court of Appeals issued an opinion illustrating the importance of careful drafting of arbitration agreements.

Following the holdings of many other courts, the Eleventh Circuit panel held that if an agreement is silent regarding the ability to arbitrate claims on a class basis, then it is up to courts to decide whether the action may proceed to arbitration.

Despite its unremarkable holding on the legal issue, the Court nevertheless found that the agreement at issue was not silent as to arbitrability of claims on a class basis, but instead indicated an agreement to submit the issue to the arbitrator. Thus, the general presumption was defeated and the question of arbitrability should be decided by the arbitrator. The agreement’s multiple references to the American Arbitration Association, its statement that “[t]he ability to arbitrate the dispute, claim or controversy shall likewise be determined in the arbitration,” and the fact that the agreement was written in broad terms with respect to what type of disputes were arbitrable, all signaled to the Court that the parties intended that questions of arbitrability be submitted to the arbitrator.

The case is JPay, Inc. v. Kobel, No. 17-13611 (11th Cir. 2018).

The underlying dispute arose out of allegations that JPay, a company that provides services to the family and friends of prison inmates, including electronic money transfers, was charging excessive fees and then using those funds to provide kickbacks to correctional facilities. Claimants Cynthia Kobel and Shalanda Houston served a demand for class-wide arbitration on JPay in October of 2015. JPay responded by filing a complaint in Florida state court that sought to defeat the ability of the claimants to pursue class-wide arbitration and instead compel bilateral arbitration. The matter was eventually removed to the Southern District of Florida, where the district court found that “the availability of class arbitration is a substantive ‘question of arbitrability,’ presumptively for the court to decide, and that the Terms of Service did not clearly and unmistakably evince an intent to overcome this presumption and send the question to arbitration.”

In affirming the district court’s decision that availability of class arbitration is a question of arbitrability for the court to decide, the Eleventh Circuit reasoned that class availability is a gateway-to-arbitration question because it “determines what type of proceeding will determine the parties’ rights and obligations.” Further, due to the stark differences between bilateral and class arbitration, the court concluded that “contracting parties would expect a court to decide whether they will arbitrate bilaterally or on a class basis.” However, the Court disagreed with the lower court’s decision that the parties’ agreement did not clearly express an intent to submit questions of arbitrability the arbitrator.

The Eleventh Circuit’s decision is in line with that of the Sixth, Third, Fourth, and Eighth Circuits. However, the Supreme Court of California and the Fifth Circuit Court of Appeals have noted contrary opinions.

We will continue to monitor and report on developments in this area of the law.

On Wednesday, September 26th, from 2 – 3 pm ET, Troutman Sanders attorneys, David Anthony and Andrew Buxbaum will present a webinar discussing an in-depth examination and update on the FDCPA as well as the impact on the debt collection industry. The discussion will focus on recent case law, litigation trends and current regulatory enforcement initiatives in connection with this consumer protection statute.

The panel will review these and other key questions:

  • What are common causes of action under the FDCPA?
  • What are the litigation trends under the FDCPA?
  • What regulatory and enforcement actions should be of most concern to debt collectors under the current administration, from the FTC, CFPB and others?

One hour of CLE credit is pending.

To register, click here.