On December 28, ACA International, a trade association representing the credit and collection industry, filed its amicus, or “friend of the court,” brief in the Ninth Circuit Telephone Consumer Protection Act case Epps v. Earth Fare, Inc. The plaintiff, Jalen Epps, is appealing the district court decision, which held that although there was 12(b)(1) standing, she failed to state a claim due to her failure to use reasonable means to revoke consent to receive messages from Earth Fare, a health and wellness retailer.

Earth Fare asserted that Epps ignored repeated reminders that she could opt out by simply texting “STOP” at any time. Instead, she sent five text messages taking the form of complete sentences. For example, one stated: “I’m simply asking for texts to stop. I would appreciate that.” Earth Fare argued that these verbose “revocation requests” were designed to frustrate the company’s automated revocation mechanism.

Moreover, the Court took judicial notice of Epps’s multiple similar TCPA suits: “Plaintiff filed four TCPA lawsuits in district court between November 3, 2016 and December 6, 2016.” In addition to Earth Fare, Epps sued Office Depot, Dunkin’ Brands, and Walgreen Co.

Looking at the totality of these facts and circumstances, the Court concluded that Epps did not plausibly allege a reasonable method of revocation, as she did not explain why she did not follow Earth Fare’s clear instruction to text “STOP.”

In its amicus brief, ACA agrees with the district court holding that Epps had failed to state a claim, but goes further and argues that she also lacked 12(b)(1) standing, contrary to the district court’s view. The district court quoted the standard from Van Patten v. Vertical Fitness Group: “[A] violation of the TCPA is a concrete, de facto injury.” ACA argues for a stricter test for standing than the current one under Van Patten. ACA seeks an exception to Van Patten for a case brought by a plaintiff who “has procured the alleged violation of which she is complaining,” i.e., a bad-faith plaintiff bringing a “manufactured” lawsuit.

Many would agree with ACA that this case is a classic example of the TCPA abuse that results from its provisions allowing for substantial recovery amounts, calculated on a per-call basis, without any cap. Because the facts of this case are damaging to the plaintiff, ACA has found a good opportunity to use this case to set limits against rampant TCPA abuse. The decision in this case could, in turn, support a favorable decision in its own pending D.C. Circuit case, ACA Int’l, et al. v. Federal Communications Commission. In that case, ACA seeks to reduce the broad scope of the TCPA as the FCC has interpreted it. The outcome will be highly influential in subsequent TCPA cases. Notably, many courts have stayed TCPA cases pending the outcome in order to use the decision as guidance.

Troutman Sanders LLP has substantial industry-leading expertise on the TCPA, with experience successfully defending clients in court nationally and advising top companies regarding compliance strategies. We will continue to monitor regulatory and judicial interpretation of the TCPA in order to identify and advise on potential risks.

n a ruling that could have major implications for patient outreach by the health care industry, on January 22, 2018, the Northern District of Ohio held that prescription reminder calls are exempted from liability under the Telephone Consumer Protection Act’s (TCPA) “emergency purposes” exception. If this ruling is followed by other courts, the long-term effect of this Court’s decision has potential to classify almost all health-care related calls subject to the emergency exemption and thus outside of TCPA liability.


In an individual suit brought by the Plaintiff, Shari Lindenbaum, against CVS for six prerecorded calls to her cell phone, Lindenbaum alleges that CVS violated the TCPA for failing to obtain prior express written consent for prescription refill reminder calls. Specifically, Lindenbaum alleges that she received calls because she has a reassigned number (or a recycled cellphone number). She also alleges that she has been registered on the National Do Not Call Registry since December 2004 (it is unclear if the number at issue is the number that is listed on the Registry).

CVS filed a motion for judgment on the pleadings asserting, among other things, that prescription refill calls are “emergency purpose” calls and thus exempt from the TCPA.


The TCPA defines “emergency purposes” as “calls made necessary in any situation affecting the health and safety of consumers.” While Lindenbaum alleges that she has no relation with the CVS customer who formerly used the recycled cellphone number, and, thus, these calls could not have been for an emergency purpose, the Court held that the calls were made for the health and safety of consumers. “In most cases, information about where, when, and how to refill a prescription concerns the health and safety of consumers, who may be reliant on their medication.” The Court also recognized that the reminder calls are “necessary” and “in many instances a patient’s ability to timely receive a prescribed medicine is critical in preventing a major health emergency.”

Further, the Court highlighted that the Court in the Roberts v. Medco Health Solutions, Inc., No. 4:15-cv-1368 (E.D. Mo. July 26, 2016), found that “in many instances a patient’s ability to timely receive a prescribed medicine is critical in preventing a major health emergency.”

The main thrust of Lindenbaum’s argument – that the court in St. Clair v. CVS Pharmacy Inc., 222 F. Supp. 3d 779 (N.D. Cal. 2016), found prescription reminder calls did not fall under the emergency purposes exception – fell flat. The Court easily distinguished the St. Clair case from the present because Lindenbaum failed to allege that she asked CVS to stop calling her.

Practical Implications

The Court recognized the FCC’s call for a broad interpretation of the term “emergency” in finding that the exception’s plain language did not limit the exception to the “large scale emergencies” that Lindenbaum suggested, such as power outages, severe weather, terrorist attacks, AMBER alerts, or unexcused school absence alerts. For health-care related calls placed prior to a revocation, consent may not be required because many of the calls placed can be classified as relating to the health and safety of consumers.

Health benefit companies as well as other industries should look to the types of calls being placed (including the purpose of such call) to determine whether consent is needed. As usual, scrubbing against the internal do not call list, however, is still required.

As we previously reported, last year the United States District Court for the Middle District of North Carolina trebled a jury verdict against DISH Network L.L.C., resulting in a $61 million damages award.  Following the jury verdict, the Court asked class counsel to devise a means for identifying class members.

DISH’s records, referred to as the “Five9/SSN records,” were used as a means of identifying the approximately 180,000 class members whose phone numbers were on the National Do Not Call Registry.  In November 2017, plaintiff Thomas Krakauer moved for entry of judgment as to 11,471 persons, “contending their class membership cannot reasonably be disputed based on the existing data.”  DISH argued in opposition that only 221 class members existed for which there were no evidentiary conflicts as to their identity or entitlement to judgment.

On January 25, the Court granted Krakauer’s motion, with two small exceptions, and held that the identities of the class members are not reasonably subject to dispute: “Dish has been found liable for willfully violating the TCPA 51,000 times, and the Five9/SSN records identify in overwhelming numbers the persons Dish’s agent attempted to solicit on Dish’s behalf.”

Throughout its opinion, the Court repeatedly admonished DISH for its alleged “lack of respect” to the Court and “its continuing repetition of long-rejected arguments, and its attempt to obfuscate the issues, confuse the record, and shift arguments and facts.”  The Court concluded that “[r]esolving uncertainties as to the remaining 7000 or so class members need not consume an irrational amount of resources by the Court, the parties, and the Claims Administrator in order to make reasonable decisions.”

We will continue to monitor the case.

2017 was a transformative year for the consumer financial services world. As we navigate an unprecedented volume of industry regulation and forthcoming changes from the Trump Administration, Troutman Sanders is uniquely positioned to help its clients find successful resolutions and stay ahead of the compliance curve.

In this report, we share developments on consumer class actions, background screening, bankruptcy, credit reporting and consumer reporting, debt collection, payment processing and cards, mortgage, auto finance, the consumer finance regulatory landscape, cybersecurity and privacy, and the Telephone Consumer Protection Act (“TCPA”).

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


On November 21, the United States District Court for the Northern District of Illinois granted preliminary approval of a proposed $600,000 settlement of a class action lawsuit filed by a consumer against M3 Financial Services, Inc., an Illinois-based health care debt collector. The lawsuit, styled Elaine Mason et al. v. M3 Financial Services Inc., alleged that M3 placed more than one million calls to cellular telephones without prior express consent in violation of the Telephone Consumer Protection Act.

Originally filed on May 12, 2015, the lawsuit alleged that M3, in its attempts to contact debtors, placed autodialed and prerecorded calls that were instead received by individuals who were not debtors. The proposed class is based on 19,385 unique cell phone numbers contacted between May 2011 and May 2016 that did not belong to a debtor or guarantor on the underlying account for which a call was placed. This represents approximately one-fourth of the cell phone numbers called by M3 during the time period at issue.

The proposed settlement, which requires private mediation and considerable subsequent negotiations, provides for a fund of $600,000 from which will be paid class members as well as attorneys’ fees and costs and administration costs.

Troutman Sanders LLP has unique industry-leading expertise with TCPA compliance, 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 to identify and advise on potential risks.

The Third Circuit recently clarified in important ways its ascertainability standard for class actions under Rule 23 in a case that arose from the efforts of an auto finance company to generate business by marketing efforts directed at automobile dealers.  The decision reflects two key findings:  (1) that defendants who argue a class is not ascertainable – i.e., that it is not administratively feasible to identify class members – must produce information in their possession regarding putative class members during discovery; and (2) that affidavits from class members, by themselves, do not satisfy the ascertainability standard, but can suffice when combined with other records.

The genesis of the dispute is a 2012 agreement between Creditsmarts, an internet-based “indirect business-to-business lending tree” that helps independent car dealers connect various lenders with potential customers, and BMW Bank of America, Inc. and BMW Financial Services, LLC.  BMW offers automotive financing to customers through its “up2drive” division, which provides borrowers with financing at independent car dealers, regardless of make or model.  The parties agreed that BMW would use the Creditsmarts system at participating independent dealers to offer up2drive loans to borrowers.  Creditsmarts agreed “to establish electronic systems to permit customers to communicate with up2drive through mutually agreed secure lines of communication” and to “process all application forms using the minimum credit parameters established by up2drive and the information obtained … from the application form including the customer’s credit history, that will provide sufficient data to determine whether the customer may qualify for any loan programs offered … by up2drive.”  In exchange, BMW would compensate Creditsmarts for customers referred through the up2drive system.

In late 2012, Creditsmarts used a fax broadcaster, WestFax, Inc., to fax advertisements to independent dealers, touting the up2drive program.  The advertisements included BMW’s up2drive logo and identified BMW Bank of North America as the sender.  Creditsmarts used WestFax to send 5,480 faxes in late November 2012, 5,107 faxes in early December, and another 10,402 faxes in late December, using a list created from Creditsmart’s customer database.  City Select Auto Sales, a recipient of one of the faxes, brought a putative class action against the three parties, arguing that the unsolicited faxes represented a violation of the Telephone Consumer Protection Act.

The database formed the lynchpin of the parties’ arguments on class certification.  Class plaintiffs moved to compel production of the database, while Creditsmarts resisted, arguing that the database included more entries than the number of BMW faxes sent in 2012.  Plaintiff’s motion to compel production of the database was denied and the district court found that the plaintiff’s proposed class failed to meet the ascertainability standard of Rule 23, because there was no reliable and administratively feasible way to determine whether putative class members received faxes during the three 2012 fax blasts.

The Third Circuit vacated the district court’s decision and remanded for further findings after production of the database.  The court further found that none of its previous decisions foreclosed the possibility that the plaintiff could support a class with affidavits combined with information from the Creditsmarts database, and that the only factual determination necessary for class membership was whether a given dealership in the database received a fax from Creditsmarts on one of the three 2012 dates.

The case is City Select Auto Sales, Inc. v. BMW Bank of North America, Inc., et al., Civil Action No. 1-13-cv-04595 (D.N.J.).

A federal district court in Connecticut recently ruled that a debt collector’s 29 telephone calls to a debtor’s home telephone over a period of 24 days was sufficient to establish a claim under the Fair Debt Collection Practices Act. In denying in part the defendant debt collector’s motion for judgment on the pleadings, Judge Jeffrey A. Meyer found that the frequency of the telephone calls could support plaintiff Peter Lundstedt’s claim that the debt collector made the calls to harass, abuse, or coerce him.

Lundstedt, who is representing himself, filed the action in Connecticut state court in May of 2015. The debt collector removed the action to federal court later that month. Lundstedt alleged the debt collector made 29 “terrorizing collection calls” in an attempt to collect on a $160 debt he owed to Verizon even though Lundstedt requested the debt collector to stop calling him. The complaint also alleged the debt collector violated the Telephone Consumer Protection Act as well as Connecticut state and common law. Attached to the complaint was a call log which purportedly showed 29 phone calls from the debt collector to Lundstedt from February 16 through April 11, 2015.

On August 25, 2015, the debt collector filed its motion for judgment on the pleadings in which it asked the Court to dismiss Lundstedt’s complaint. With regards to Lundstedt’s FDCPA claim, the debt collector argued the number of calls it made to Lundstedt is not sufficient to support a claim of harassment under the FDCPA. The debt collector also argued that Lundstedt failed to plead facts sufficient to support a claim under the TCPA or Connecticut state and common law.

Judge Meyer agreed with the debt collector’s analysis of Lundstedt’s TCPA and Connecticut state law claims and dismissed those counts of the complaint with prejudice. However, Judge Meyer found the 29 telephone calls over a period of 24 days was not “so insubstantial that it fails as a matter of law.” Judge Meyer further cited the fact that Lundstedt had orally requested that the debt collector stop calling him as well as evidence that the debt collector made multiple calls per day to support his decision that Lundstedt had pled facts sufficient to support a claim under the FDCPA.

This decision adds to the series of cases in which courts have attempted to quantify the number of telephone calls that constitute harassing or abusive conduct under the FDCPA. However, application of this decision to future cases is notably limited due to the procedural posture of the case. Further, claims of harassing or abusive telephone calls remain highly fact-specific inquiries for courts to consider, which may lessen the effect of a given court’s decision.

A Texas-based payment processor agreed on November 1 to pay $9 million to settle a putative class action brought under the Telephone Consumer Protection Act in the United States District Court for the Northern District of California.  According to the plaintiffs, Pivotal Payments, Inc. failed to ensure that a third party it hired to make marketing calls on its behalf complied with the TCPA, which prohibits telemarketing calls to cellular telephone numbers without call recipients’ prior express written consent.

Pivotal Payments allegedly included a provision in its contract with the marketing firm that mandated TCPA compliance.  However, the marketing firm allegedly violated the contract by calling cell phone numbers without first obtaining the recipients’ prior express consent.  Although Pivotal Payments initially filed a third-party complaint against the marketing firm seeking indemnification, it voluntarily dismissed such claims less than a month later.

After more than a year of discovery, Pivotal Payments and the putative class agreed to settlement terms for a class of over 1.9 million members.  Pivotal Payments agreed to pay $9 million to settle the TCPA claims.  Class members are each expected to receive between $20 and $60.  The settlement fund will also pay for an incentive award to the named plaintiff ($25,000), settlement administration costs (approximately $50,000), and class-action attorneys’ fees and costs (approximately $2.25 million).

It is also important to note that the District of Columbia Circuit Court of Appeals has the potential in the near future to upend litigation under the TCPA, one of the nation’s most frequently litigated statutes, as it considers the legality of the FCC’s 2015 Declaratory Ruling and Order that greatly expanded the statute’s purview. With oral argument completed in October 2016, a decision is likely imminent.

Troutman Sanders LLP has unique industry-leading expertise with TCPA compliance, 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 to identify and advise on potential risks.

The November 3 decision in Alpha Tech Pet, Inc. v. Lagasse, LLC, et al. highlights that one of the key individualized issues present in many TCPA class actions – whether consumers provided their consent to be called, texted, or, as in this case, sent faxes – can defeat class claims.

In its complaint, Alpha Tech Pet alleged that the defendants sent it eight unsolicited fax advertisements in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq.  Alpha Tech Pet sought to certify a class of all persons to whom the defendants sent faxes from May 1, 2011 to May 1, 2015.  Importantly, the class included members who had received both solicited and unsolicited faxes.

In March 2017, the United States District Court for the District of Columbia, in Bais Yaakov of Spring Valley v. FCC, held that the TCPA only applies to unsolicited fax advertisements and not to solicited faxes.  Since that decision, “several courts have found class certification inappropriate in TCPA cases where, ‘to determine whether any putative member of the proposed class had a TCPA claim, the Court would first be required to determine whether that proposed class member ‘solicited’ the faxes it received.’”  However, the defendant must first “set forth ‘specific evidence showing that a significant percentage of the putative class consented to the communication at issue’ before a court can find that ‘issues of individualized consent predominate [over] any common questions of law or fact.’”

In Alpha Tech Pet, the United States District Court for the Northern District of Illinois followed these courts’ reasoning, finding “the individualized consent issues created by Bais Yaakov dispositive of plaintiffs’ class certification claims.”  The Court found that the defendants “set forth several different types of consent-related evidence,” namely consent forms provided by the defendants’ customers, a description of the defendants’ practices of requesting fax numbers from customers, and declarations from 25 customer fax recipients who consented to receive the faxes.  The Court held that this was “concrete evidence of consent” by a significant portion of the proposed class.  Accordingly, “individualized consent issues would require a series of mini-trials, thus defeating predominance and superiority.”  The Court therefore grated the defendants’ motion to deny class certification.

While Alpha Tech Pet focuses specifically on consent related to the receipt of faxes, consent will also pose an individualized issue in TCPA class actions involving telephone calls or text messages.  For non-telemarketing calls, the caller must have the prior express consent of the called party while telemarketing calls require prior express written consent of the called party.

In the past several years, Dish Network, LLC has found itself a target of several class actions for violations of the Telephone Consumer Protection Act.   Earlier this year, a jury found Dish Network liable for TCPA violations arising from telemarketing calls.  The North Carolina District Court trebled the jury verdict, resulting in a $61 million damages award.  Also, earlier this year, Dish Network was found liable for TCPA violations after a jury trial in an Illinois federal court that rendered a $280 million damages award against the direct-broadcast satellite service provider.

In its post-trial motions filed in the North Carolina District Court, Dish Network argued that the $61 million award should be set aside because the Illinois class action had a preclusive effect on North Carolina TCPA claims.  The Court rejected this argument, finding that Dish Network waived its right to assert the defense of res judicata because of its “prolonged silence, its representations to the Court and the plaintiffs [that two actions had no preclusive effect on each other], and failure to object to the dual prosecution of this case and the Illinois Action.”

Dish Network also argued that, if not set aside, the $61 million verdict should at least be reduced.  The Court disagreed, concluding that the treble damages did not improperly punish Dish Network based on its “past compliance issues” with telemarketing laws.  Rather, the Court gave weight to the specific violations at issue while also considering the evidence of “Dish’s historic and general non-compliance with telemarketing laws.”  The Court also rejected as “inaccurate and nonsensical” Dish Network’s argument that no deterrence was necessary because the evidence in support of deterrence went back more than a decade.  The Court emphasized that the need for deterrence was greater precisely because non-compliance with the TCPA continued over the course of many years.

Simultaneous prosecution in several states of class actions based on the same facts is not a rare occurrence.  A global strategy for handling such actions is vital to reducing the risk of excessive and duplicative damages awards.

The Court’s opinion can be found here.