With a trial looming like storm clouds on the horizon, several cruise ship companies and their affiliated travel agencies settled a “robocall” Telephone Consumer Protection Act (TCPA) class action up to $76 million. The settlement, announced on September 8, 2016, was reached just weeks after the trial court rejected the defendants’ attempts to decertify the class based on recent U.S. Supreme Court case law. Once the trial court determined that a violation of the plaintiffs’ right to maintain their “solitude” and be free from unwanted calls constituted an actual and concrete injury, the defendants were effectively sunk. The settlement of this four-year-old case once again demonstrates the “titanic” risk that companies face for failure to comply with the TCPA.
The putative class action TCPA lawsuit was filed in the U.S. District Court for the Northern District of Illinois, a well-known hotbed of TCPA class actions. The class claims arose from robocalls made by Caribbean Cruise Lines, Inc., two of its marketing subsidiaries and a third-party entity, to approximately one million individuals. In 2014, the court certified two subclasses, one for cell phone call recipients, and another for landline call recipients. In mid-2016, the defendants moved to decertify those classes, arguing that the plaintiffs did not have Article III standing because they did not suffer any actual, concrete harm from the calls and had alleged nothing more than a naked statutory violation of the TCPA.
The defendants’ argument was based on the U.S. Supreme Court’s May 2016 opinion in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), where a majority held that a naked statutory violation—without a corresponding, independent concrete harm to a plaintiff—is not enough to create standing to pursue litigation. The Northern District of Illinois rejected this argument by Caribbean Cruise Lines and the other defendants, holding that the plaintiffs’ alleged invasion of their right to privacy constituted sufficient injury to satisfy the Spokeo standard necessary to maintain the action. Although the defendants did not seek interlocutory appeal of the district court’s decision, courts across the country are not in agreement on whether a right to privacy in this context is sufficient to confer standing.
The specifics of the Caribbean Cruise Lines litigation and settlement aside, the case is another reminder for companies that utilize phone, text and fax for marketing purposes that failing to strictly comply with the TCPA can be very costly. Companies must remember, among other things:
-
The TCPA does not prohibit calls, texts or faxes, provided that the recipients have provided some form of consent.
-
Consent runs with the individual, not the number, and there is no good faith exception for a misdialed call or a call made to a reassigned number.
-
Requests to stop calling, texting or faxing must always be honored.
-
Companies may not condition or restrict the manner in which opt-outs are made.
-
Adherence to national, state and company-specific “Do Not Call” lists is imperative.
-
Consider using email.
-
Stay abreast of the orders and guidance issued by the Federal Communications Commission, such as the July 2015 Order which significantly broadens the definition of autodialer.
While not an exhaustive list to ensure smooth sailing, these are some of the many steps that must be taken to avoid facing TCPA class actions and potential multi-million-dollar liability
