In a recent case, the United States District Court for the Southern District of California partially dismissed a consumer’s claims under the Telephone Consumer Protection Act.  The case is Bodie v. Lyft, No. 3:16-cv-02558-L-NLS (S.D. Cal. Jan. 16, 2019). 

Plaintiff Jason David Bodie’s complaint alleged that he received two unsolicited text messages from a telephone number that belongs to or was used by Lyft on or about October 10, 2016.  Bodie alleged that the first text message instructed him to download the Lyft app onto his cellular phone, while the second message included a link to download the app.  In addition, he alleged that the text messages were sent using an automatic telephone dialing system, or “ATDS,” as defined by 47 U.S.C. § 227(a)(1), and that the ATDS was owned by a commercial text messaging system acting as an agent or vendor of Lyft.  Finally, Bodie alleged that he sustained damages because the text messages invaded his privacy interests, were a nuisance, and caused frustration, distress, and loss of time. 

Lyft filed a motion to dismiss the complaint on the grounds that: (1) Bodie’s ATDS allegations were conclusory; and (2) he failed to plausibly allege that Lyft sent the texts or had an agency relationship with the sender.  The Court first noted two permissible approaches to evaluating the sufficiency of the consumer’s ATDS allegations.  Under the first, a plaintiff is permitted to make minimal allegations in the complaint, and discovery is permitted to proceed on the ATDS issue because the information is in the sole possession of the defendant.  Under the second, the plaintiff must plead factual allegations beyond mere statutory language.  The Court held that, under either approach, Bodie had failed to state a plausible claim for relief because his complaint “merely parrot[ed] [the] statutory definition of an ATDS” and failed to contain any facts that supported a reasonable inference that Lyft used an ATDS to send the relevant text messages. 

With respect to Bodie’s claim regarding the agency relationship between Lyft and the sender of the text messages, the Court held that his allegations were sufficient to survive a motion to dismiss.  In particular, the Court noted that the consumer’s allegations that the texts were “sent via a commercial text messaging system by an agent or vendor hired by Lyft” and that “Lyft instructed its agents or vendors as to the content of the text messages and timing of the sending of the text messages” sufficiently stated Lyft’s alleged vicarious liability. 

Troutman Sanders will continue to monitor and report on courts’ analysis and treatment of the TCPA.

Time Warner Cable is fighting back against a purported Telephone Consumer Protection Act wrong number class action lawsuit.  In Hunter and Villa v. Time Warner Cable Inc., No. 1:15cv06445 (S.D.N.Y), plaintiffs Leona Hunter and Anne Marie Villa allege that defendant Time Warner Cable engages in a “practice of making unsolicited telemarketing and debt collection calls” to individuals without their prior express consent. The plaintiffs’ complaint focuses on calls that were allegedly placed to reassigned or wrong numbers, given that the individuals who received the calls had no relationship to the debt at issue.   

In November 2018, the plaintiffs filed a Motion for Class Certification, seeking to certify the following wrong number class: 

All individuals in the United States who received a call made by or on behalf of Defendant to the individual’s cellular or residential telephone through the use of an artificial or pre-recorded voice, from October 16, 2013 to the date that class notice is disseminated, where such person was not listed in Defendant’s records as the intended recipient of the call. 

Hunter and Villa argue that each of the Rule 23(a) and 23(b)(3) requirements are met.  However, Time Warner vigorously disputes that common questions of facts and law predominate.  Instead, Time Warner argues that individualized issues of consent, liability, and class membership render the class noncertifiable. 

In wrong number cases, common proof of consent or lack thereof often creates problems at the class certification stage.  Time Warner rests its opposition to the motion for class certification on this exact issue, arguing that where a “caller obtains telephone numbers directly from its intended recipients,” the identification of subsequent absence of consent creates an individualized issue that requires mini-trials.   

The plaintiffs argue that wrong number class members are identifiable through online reverse lookup services frequently used to determine to whom a telephone number is assigned at any point in time.  However, Time Warner disputes that reverse lookup can properly identify the subscriber and/or customary user.  For example, it argues data for pre-paid phone plans, which are held by over 100 million individuals, is generally non-existent for use in a reverse lookup database.  Time Warner further argues that the plaintiffs’ proposed reverse lookup tool is not reliable for identifying the time period an individual is associated with a telephone number.  Time Warner points out that under the plaintiffs’ proposed methodology for identifying wrong numbers, named plaintiff Villa is not a member of the proposed class.  Time Warner also notes that the proposed reverse lookup methodology fails to address three percent of the numbers called by the cable provider during the relevant time period because the numbers are not available in the reverse lookup database.  Therefore, individualized inquires as to consent for those numbers would be necessary.  Finally, Time Warner points out that the plaintiffs’ namematching methodology results in various false matches, thereby creating further individualized consent issues.   

The plaintiffs have yet to file a reply in support of their motion for class certification addressing the deficiencies asserted by Time Warner Cable.  Nonetheless, the parties’ class certification briefing demonstrates the multiple hurdles a plaintiff must overcome when attempting to certify a wrong number TCPA class.   

We will continue to follow this case and provide an update on the Court’s class certification decision.

On January 28, Crunch Fitness filed a petition for writ of certiorari in the U.S. Supreme Court, asking the Court to overturn the Ninth Circuit’s decision in Marks v. Crunch San Diego.  Crunch contends that the Ninth Circuit rewrote the definition of an automatic telephone dialing system (“ATDS”) and contradicted the plain text and purpose of the Telephone Consumer Protection Act.  The petition argues that the Ninth Circuit’s definition of an ATDS omits the statutory requirement that a telephone system use a random or sequential number generator to qualify as an ATDS in favor of a consumer-friendly definition at odds with the D.C. Circuit’s ACA International opinion, and creates a circuit split. 

Background 

The plaintiff, Jordan Marks, signed up for a gym membership with Crunch Fitness in 2012.  Over an eleven-month period, he received three text messages from the gym, which Marks contends did not have prior express consent to contact him.  Crunch uses the “Textmunication” system, a web-based marketing platform designed to send promotional text messages to a list of stored telephone numbers, which can be input manually or automatically.  After a Crunch employee logs into the Textmunication system, selects the phone numbers, and generates the content, the system sends the text messages to selected phone numbers. 

Marks filed a putative class action against Crunch Fitness in 2014, alleging violations of the TCPA.  The district court granted summary judgment in Crunch’s favor, contending that its system did not qualify as an ATDS because it did not have the capacity to randomly or sequentially generate numbers and then dial those numbers.   

On September 21, 2018, the Ninth Circuit reversed the district court’s decision.  The Court began by discussing the intent and purpose behind the TCPA, noting that much of what was written in 1991 related to the technology at the time.  The Court then addressed the D.C. Circuit’s decision in ACA International v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018), where the D.C. Circuit overturned the FCC’s 2015 Order and the agency’s definition of an ATDS.  According to the Court, the D.C. Circuit’s vacatur of the FCC’s interpretation of what qualified as an ATDS left only the statutory definition as guidance.  However, the Court quickly concluded that the statutory text was confusing and ambiguous, making way for an expansive definition that includes devices with the capacity to dial stored numbers automatically.  This definition thus approximates that of the 2015 Order, which the D.C. Circuit expressly rejected in ACA International. 

Crunch’s Appeal 

Crunch frames its appeal as “[w]hether the Ninth Circuit erred in expanding the TCPA’s definition of ‘automatic telephone dialing system’—in acknowledged conflict with the third Circuit and in stark tension with the D.C. Circuit—to encompass any device with capacity merely to dial stored telephone numbers.”  Crunch contends that the Third Circuit’s decision in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018)—where the court affirmed that the defendant’s SMS service was not an ATDS because it did not have present capacity to function as an autodialer—adheres more closely to the statutory text and to the D.C. Circuit’s ACA International opinion, meaning the Ninth Circuit has created a circuit split.  Crunch also argues that the Ninth Circuit’s broadened definition of an ATDS expands the TCPA far beyond its statutory purpose.  According to Crunch, the expanded concept of an ATDS “massively increases exposure under the TCPA—not only for businesses facing over 4,000 TCPA suits each year . . ., but for over 300 million smartphone users when sending everyday texts or making calls .” 

Outlook 

Though Marks created a circuit split and arguably does not conform to the reasoning set forth in ACA International, Crunch may face an uphill climb to get their arguments before a TCPA-fatigued Supreme Court.  The Court has issued two major opinions on TCPA cases in the past seven years (Mims v. Arrow Financial Services, LLC and Campbell-Ewald Co. v. Gomez) and recently granted certiorari in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., meaning the justices may be less inclined to hear Crunch’s appeal. 

However, the Federal Communications Commission is considering issuing broad new guidance on the TCPA, which could be contrary to the Ninth Circuit’s position in Marks.  If that occurs, then the legal system – at least in the Ninth Circuit – will have to decide whether the FCC’s rules trump its judicial interpretations.

On January 17, in Kibbee v. Smith-Palluck Associates Corp., No. 2:18-cv-01848, a putative class action pending in the United States District Court for the District of Nevada, the Court entered an order notifying the United States Attorney General that the constitutionality of the Telephone Consumer Protection Act has been called into question and giving the Attorney General 60 days to intervene if it chooses to do so.

Plaintiff Jason Kibbee asserts that the defendant, which does business as Las Vegas Athletic Clubs, called his cell phone without his consent in an effort to collect payments due for a gym membership.  In moving to dismiss, Smith-Palluck asserts the claim fails as a matter of law because the provision of the TCPA at issue contains a content-based restriction on speech that violates the First Amendment of the Constitution.

A law regulating speech is content-based if it “applies to particular speech because of the topic discussed or the idea or message expressed.”  Reed v. Town of Gilbert, 135 S. Ct. 2218, 2227 (2015).  Such laws are presumed to be invalid under the First Amendment.  United States v. Playboy Entm’t Grp., 529 U.S. 803, 817 (2000).  They are permitted only if they can survive strict scrutiny – that is, if the Government can establish that “the restriction furthers a compelling interest and is narrowly tailored to achieve that interest.”  Reed, 135 S. Ct. at 2231.  Additionally, because restrictions that are based on the “identity of the speaker are all too often simply a means to control content,” the Supreme Court has held that laws that favor some speakers over others “demand strict scrutiny when the legislature’s speaker preference reflects a content preference.”  Id. at 2230.

In Kibbee, the defendant asserts that Section 227(b)(1)(A)(iii) of the TCPA contains an impermissible content-based restriction because it treats calls made by persons collecting debts owed to the United States differently from other types of calls.  Specifically, the provision makes it unlawful:

(A)     to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice —

*  *  *

(iii)     to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States;

47 U.S.C.S. § 227(b)(1)(A)(iii) (emphasis added).As an alternative to granting the motion to dismiss, Smith-Palluck has requested that the matter be stayed pending the outcome of a similar challenge to the constitutionality of the TCPA pending before the Ninth Circuit in Gallion v. Charter Communications, Inc., No. 18-55667 (9th Cir. Mar. 8, 2018).

Because of the far-reaching implications – the potential invalidation of all claims brought under § 227(b)(1)(A)(iii) of the TCPA – we will continue to closely monitor the proceedings in Kibbee and Gallion and provide updates as events unfold.

Nearly every American with a cellphone has had it happen to them. You receive a call from an unknown number with an automated message pitching refinance options for the loan you don’t have, or consolidation options for the student loan you already paid off.

In a new report released by Hiya, a Seattle-based spam-monitoring service, it was found that approximately 26.3 billion robocalls were placed to U.S. phone numbers last year – a 46 percent increase from the 18 billion placed in 2017.  More disturbingly, one report projected that at least half of all cellphone calls in 2019 could be spam.

Automated phone calls can be a cost-efficient and incredibly effective mechanism for the many businesses that have legitimate purposes for using them, such as delivery services, banks, and mortgage services.  However, the inconceivable number of illegitimate and unwanted spam robocalls is causing Americans to not answer about half of all cellphone calls according to Hiya, thus causing Americans to miss important calls and creating a difficult challenge for legitimate users as well as regulators and phone carriers.

In its report, Hiya analyzed activity from 450,000 users of its app to identify the scope of robocalling and how those receiving the calls responded to them.  In a month’s worth of data, Hiya found that each of its app users reported an average of 10 unwanted robocalls.  An average of 60 calls per user were from unrecognized numbers or numbers not linked to a recipient’s address book.

While spam robocalling may not be going away any time soon, federal regulators have taken notice of the 52,000 consumer complaints about caller ID spoofing in 2018 and have moved to adopt rules to facilitate the rollout of new technologies to combat these calls.  Multiple cell phone carriers have pledged to implement caller authentication services that follow the same principles as website encryption.  The goal of the new protocol is to limit the effects of caller ID spoofing such as when a spammer poses as a caller from a person’s own area code to trick them into answering the call.

As technology changes, so too will the rules and regulations regarding calling practices that may have the unintended consequence of creating new hurdles for legitimate businesses using automated dialers.

Troutman Sanders will continue to monitor and report on important developments involving calling regulations.

In Ewing v. Encore Solar, LLC, No. 3:18-cv-02247 (S.D. Cal. January 22, 2019), plaintiff Anton Ewing filed a suit against defendants Encore Solar, LLC; Sunrun, Inc. (“Sunrun”); Bargain Electricity, Inc. (“Bargain Electricity”); and individual employees of Encor and Bargain Electricity for violation of the Telephone Consumer Protection Act.  Ewing alleged that all defendants were liable under a theory of vicarious liability for contacting his cellular telephone using an automatic telephone dialing system, or “ATDS,” without his consent.

Ewing claimed that he believed the defendants used an ATDS to contact him because the calls exhibited signs associated with calls made by an ATDS, including repeated calls “within a period of time and the presence of a pause or click.”  Encor filed a motion to dismiss, arguing in part that a plaintiff cannot simply allege that a party used an ATDS to establish standing under the TCPA.

In rejecting Encor’s argument, Judge Cathy Ann Bencivengo adopted the expansive definition of an ATDS set forth by the Ninth Circuit in Marks v. Crunch of San Diego, 904 F.3d 1041, 1052 (9th Cir. Sept. 20, 2018).  Marks held that an ATDS is “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.”  Judge Bencivengo explained that although the allegations are not “sufficient on their own to support [Ewing’s] claim that an ATDS was used”, under Marks, it was “reasonable to infer that the equipment Defendants allegedly used was an ATDS.”

Encor’s motion to dismiss the TCPA claim ultimately was granted on other grounds.  Specifically, the Court rejected Ewing’s attempts to establish that Encor was vicariously liable for calls made to Ewing.  The Court found that Ewing had failed to differentiate his allegations against each defendant and that his allegations failed to distinguish the alleged wrongs each defendant purportedly committed.  Due to this failure, Ewing’s complaint “failed to adequately allege the first element of a TCPA claim, namely that Encor, or an agent acting on its behalf, called a telephone number belonging to Plaintiff.”

This case demonstrates how the Marks decision has created an uphill battle for defendants in the Ninth Circuit to challenge allegations that an ATDS was used to contact customers at the pleadings stage.

2018 was a busy year in the consumer financial services world. As we navigate the continuing heavy volume of regulatory change and forthcoming developments from the Trump administration, Troutman Sanders is uniquely positioned to help its clients successfully resolve problems and stay ahead of the compliance curve.  

In this report, we share developments on consumer class actions, background screening, bankruptcy, FCRA, FDCPA, payment processing and cards, mortgage, auto finance, the consumer finance regulatory landscape, cybersecurity and privacy, and TCPA. 

We hope you find this helpful as you navigate the evolving consumer financial services landscape.

Access full report here.

 

On January 15, amicus briefs were filed in the much awaited Telephone Consumer Protection Act (“TCPA”) case currently before the Supreme Court, PDR Network LLC, et al. v. Carlton & Harris Chiropractic.  Following filing of PDR Network’s opening brief, which we discussed here, four amici filed briefs: State and Local Government Associations; the states of Oklahoma, Indiana, Louisiana, Nebraska, Texas, and West Virginia (the “States”); the U.S. Chamber of Commerce; and, finally, University of Virginia School of Law professor Aditya Bamzai.  Notably, all amici filed briefs at least partially supporting PDR Network’s position that the Fourth Circuit incorrectly interpreted the Hobbs Act to deprive the district court of jurisdiction to review PDR Network’s TCPA-based defenses. 

The Position of the States and the State and Local Government Associations

The State and Local Government Associations and the States (collectively, the “State Amici”) supported the district court’s rationale which held that an unsolicited free e-book fax sent by a major health information provider must have a commercial goal to be considered an advertisement under the plain, statutory language of the TCPA.  In dismissing the case, the district court declined to defer to a 2006 Rule promulgated by the FCC that interpreted the term “unsolicited advertisement.”  The Fourth Circuit overruled this decision, affirming that the goal of the Hobbs Act is to ensure the TCPA has a single, nationwide meaning and not divergent meanings depending on what a particular court might say.  This conclusion, the State Amici argued, went against the very purpose of the Hobbs Act.

The State Amici further argued that the Fourth Circuit’s interpretation of the Hobbs Act – specifically, that the Act deprived district courts of jurisdiction to consider the validity of orders like the 2006 FCC Rule on unsolicited advertisements – would result in problematic constitutional concerns, including separation of powers, federalism, and due process issues.  Taken together, the State Amici argued that these impacts would be costly for corporate defendants as well as state and local governments.

The Position of Professor Bamzai

Professor Bamzai, on the other hand, addressed a singular argument: that the Fourth Circuit’s decision was mistaken because, under the Hobbs Act, district courts can interpret statutes, notwithstanding a prior agency interpretation such as the FCC’s 2006 Rule, where the regulation is merely interpretive.  In other words, Bamzai’s amicus brief avers that the district court did not determine the validity of the FCC’s 2006 Rule by disagreeing with the FCC’s interpretation and should therefore be upheld under the Hobbs Act.  This argument echoed the alternative path proffered by PDR Network in its opening brief. 

The Position of the U.S. Chamber of Commerce

Finally, the U.S. Chamber of Commerce filed an amicus brief supporting neither PDR Network nor the respondent, Carlton & Harris Chiropractic.  Splitting the baby, the U.S. Chamber of Commerce argued that the Fourth Circuit was both correct in its holding that the Hobbs Act requires certain procedures for reviewing agency orders, and that it erred when it curtailed private defendants’ due process rights to challenge regulations enforced against them, especially in TCPA cases.  By taking on this seemingly divergent position, the U.S. Chamber asserted that the Hobbs Act is necessary to protect regulatory certainty and national uniformity as designed by Congress.  With that in mind, however, the U.S. Chamber further argued that businesses have a due process right to defend themselves, including by making arguments about the reach and authority of agency rules.  Discussing the state of TCPA litigation across the country, the U.S. Chamber stated:

Plaintiffs in these class action lawsuits use the FCC’s rules and gaps in interpretations to sue legitimate businesses for the use of new technology or for innocent missteps in marketing campaigns.  Defendants may face limited options in defending themselves. TCPA litigation often involves questions of what Congress meant to proscribe, and how the FCC has implemented the statute… TCPA defendants should be able to contest the validity of imprecise or outdated obligations that plaintiffs seek to apply to them.

Ultimately, the U.S. Chamber of Commerce’s amicus brief affirmed that private defendants’ due process rights should be protected along with upholding the regulatory certainty and national uniformity promoted by the Hobbs Act.

Taken together with PDR Network’s opening punch, these briefs portend that the fight for interpretation of the TCPA is just beginning. 

 

In Thompson-Harbach v. USAA Fed. Sav. Bank, No. 15-cv-2098-CJW-KEM, 2019 U.S. Dist. LEXIS 3687 (N.D. Iowa Jan. 9, 2019), the Northern District of Iowa provided a deep dive into recent Telephone Consumer Protection Act case law and a retrospective look into Federal Communications Commission TCPA pronouncements.  After its informative analysis, the Court held that ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018), invalidated not only the FCC’s 2015 Declaratory Ruling but also the applicable provisions of the agency’s 2003 Order and 2008 Declarative Ruling, insofar as they “define a predictive dialer as an ATDS, even when the predictive dialer lacks the capacity to generate phone numbers randomly or sequentially and then to dial them.”  Accordingly, the Court granted the defendant’s motion for summary judgment after finding there was no genuine issue of material fact regarding the dialing equipment’s lack of ability to generate numbers randomly or sequentially, but instead the equipment could only dial specific numbers it was provided.

Joan Thompson-Harbach brought a single-count complaint against USAA Federal Savings Bank, alleging it violated the TCPA by continuing to call her cell phone after she asked USAA to stop placing collection calls to her cell phone.  After obtaining a credit card from USAA, Thompson-Harbach entered into an Online Agreement regarding the credit card account.  In relevant part, the agreement provides: “You authorize USAA to contact you at the telephone numbers in your profile.  …  To revoke this authorization, you may edit your profile by removing telephone number on which you do not want to receive such calls.”  She provided the number at issue as her contact number in her online profile and did not subsequently reject or withdraw from the Online Agreement or remove or change her contact number.

The Court found that the evidence showed USAA called Thompson-Harbach’s cell phone.  However, after extensive analysis, it held USAA did not use an ATDS or artificial or prerecorded voice to call her.

The Court explained that the holding in ACA Int’l “rejected the ‘expansive interpretation’ of the term ‘capacity,’” which effectively deemed all smartphones ATDSs. The D.C. Circuit invalidated the FCC’s 2015 Declarative Ruling because of its contradictory ATDS definition – “one providing that ‘a device qualifies as an ATDS only if it can generate random or sequential numbers to be dialed,’ and the other that ‘it can so qualify even if it lacks that capacity.’”  The D.C. Circuit explained that either definition might be permissible, but competing definitions in the same order “rendered unreasonable the FCC’s ruling that predictive dialers categorically qualify as ATDSs.”

By extension, the Court reasoned the FCC’s prior rulings, stating that predictive dialers automatically qualify as an ATDS – even when lacking the ability to generate numbers randomly or sequentially and then dial the generated numbers – were invalidated. The Court joined courts in the District of Minnesota, Northern District of Illinois, Northern District of Georgia, and District of Arizona in so holding.

After determining the FCC’s rulings were no longer controlling and that ACA Int’l did not provide a conclusive opinion on what meets the requirements of an ATDS, the Court set out to determine what qualifies as an ATDS, at least in the Northern District of Iowa.  It wrote: “[T]he question for this Court to determine is whether a predictive dialing device that calls telephone numbers from a stored list of numbers—rather than having generated those numbers either randomly or sequentially—satisfies the statutory definition of ATDS.”

The Court engaged in fundamental statutory analysis of the relevant TCPA text.  “[T]he TCPA defines an ATDS as ‘equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.’”  The Court found the language “using a random or sequential number generator” necessarily modifies both “store” and “produce.”  Therefore, it determined “that a device meets the definition of an ATDS only when it is capable of randomly or sequentially producing, or randomly or sequentially storing telephone numbers.”

The Court explained that its interpretation is supported by the FCC’s pre-2003 definition of an ATDS.  The Agency’s 1992 Order noted the prohibition against ATDS use “clearly do[es] not apply to functions like ‘speed dialing,’ ‘call forwarding,’ or public telephone delayed message services …. because the numbers called are not generated in a random or sequential fashion” while the Agency’s 1995 Ruling “described ‘calls dialed to numbers generated randomly or in sequence’ as ‘autodialed.’”  Finally, the Court rejected Thompson-Harbach’s reliance on the Ninth Circuit’s holding in Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), which held equipment lacking the capacity to generate random or sequential numbers could still meet the statutory definition of an ATDS, stating, “With respect, this Court finds the Marks court’s decision erroneous as a matter of statutory construction, for the reasons previously stated.”

Since there was not a genuine dispute of material fact as to the capabilities of the dialing equipment at issue, and finding it lacked the ability to randomly or sequentially generate numbers and then dial those numbers and instead stored and called the number provided by the plaintiff, the Court granted summary judgment in favor of USAA.

In dicta, the Court also analyzed whether the calls at issue were placed without consent.  While Thompson-Harbach alleged she orally revoked consent multiple times, only one occurrence was noted in USAA’s records.  Therefore, for the purposes of summary judgment, the Court analyzed only the undisputed oral revocation to determine if it was legally sufficient to revoke consent and trigger TCPA liability for subsequent calls.

In its opinion, the Court pointed out that the TCPA is silent regarding whether consumers may revoke permission to be contacted after initially providing consent.  However, the Court also noted the FCC’s 2015 Declaratory Ruling “concluded that ‘consumers may revoke consent [to be called] through any reasonable means.”  The Court found, as a matter of law, the means for revoking consent may be limited by mutual agreement, provided the means are reasonable, but held the contract could not bar a consumer from withdrawing consent completely.

After this analysis, the Court held that the provision at issue, stating a consumer “may” edit their profile to remove the numbers on which they no longer wished to receive calls, was permissive and did not establish the only means by which consent could be effectuated. Therefore, Thompson-Harbach’s oral revocation was a valid – and reasonable – means of revoking consent to be contacted.  However, having already decided that the equipment at issue did not meet the statutory definition of an ATDS, and therefore that Thompson-Harbach could not prevail on her TCPA claim, the Court granted USAA’s motion for summary judgment.

On January 8, petitioner PDR Network LLC filed its opening brief in the Telephone Consumer Protection Act case before the Supreme Court that could potentially knock out TCPA litigation as we know it.  As we explained here, the Supreme Court’s decision to grant certiorari in PDR Network LLC, et al. v. Carlton & Harris Chiropractic means that the Court could decide whether the Federal Communications Commission or the courts will dominate the interpretation of one of the most litigated statutes in America. 

Essentially, this case is about whether the Hobbs Act (which requires the courts to defer to the FCC) or the Chevron doctrine (which gives courts freer rein to interpret agency decisions) prevails.   

PDR Network’s brief didn’t pull any punches.  Criticizing the Fourth Circuit Court of Appeals decision to strip jurisdiction from district courts in favor of FCC rulemaking, PDR Network averred that the Fourth Circuit “treated the Hobbs Act as though it gives agencies, rather than courts, the final word as to what federal law means” and that “[t]he Fourth Circuit was wrong to ascribe such revolutionary meaning to a statute as ordinary as the Hobbs Act.”  In so arguing, PDR Network urged the Court to find that the “[t]he Fourth Circuit misconstrued the Hobbs Act” which it concluded did not have such an effect.  

Relying on the text of the Hobbs Act and the Administrative Procedure Act, PDR Network forcefully argued that there is no limitation on the power of district courts to fully consider a party’s defenses, such as FCC interpretations of TCPA provisions.  Instead, PDR Network argued, “the Hobbs Act has a limited and sensible reach.    There is thus no reason to read the Act to give the courts of appeals a monopoly over all judicial review of agency orders[.]”   

However, PDR Network did not limit their argument to the Hobbs Act.  It argued that, if accepted, the Fourth Circuit’s interpretation of the Hobbs Act would raise “grave constitutional concerns” as so doing would bar PDR Network from “litigating a statutory defense that it never had a full and fair opportunity to present to any court, on the theory that an agency has put the issue to rest without any judicial determination whatsoever.”  In other words, PDR Network argues that the Fourth Circuit’s holding prevents corporations such as PDR Network from defending themselves with the full range of defenses constitutionally available.   

After raising the constitutional stakes, PDR Network offers the Supreme Court an alternative solution: review the FCC’s 2006 Order as an interpretive rule rather than a binding legislative rule.  In urging this approach, PDR Network reminded the Court that “interpretive rules do not bind courts or private parties, and frequently are not even reviewable by a court until applied by an agency to a particular party.”  Accordingly, then, the District Court was correct to conclude that the complaint did not plausibly allege a violation of the TCPA as it was not bound by the Hobbs Act to “slavishly” follow the FCC.   

These arguments confirm that the TCPA interpretation battle between the FCC and the courts could well be decided by the Supreme Court through this case.