TCPA Connect - March 2014

by Manatt, Phelps & Phillips, LLP
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FCC Seeks Comment on TCPA Liability When Phone Numbers Switch Hands

What happens when a company with prior express consent to call a consumer’s mobile phone contacts that number only to find that it now belongs to someone else?

The Federal Communications Commission is seeking public comment on the issue after United Healthcare Services, Inc., filed a petition on January 16 requesting clarification about potential liability under the Telephone Consumer Protection Act.

The TCPA and FCC rules require that businesses obtain prior express consent to place autodialed or prerecorded calls to wireless numbers. United told the FCC that it obtains such consent from individuals before making healthcare-related information calls using an automatic telephone dialing system (ATDS) or prerecorded voice. But according to United’s petition, sometimes the wireless telephone numbers for which it obtains prior express consent are reassigned from one subscriber to another and organizations cannot always know whether a given number has changed hands.

“United, therefore, asks the Commission to clarify that parties are not liable under the TCPA for ‘informational, non-telemarketing calls, especially healthcare-related calls, to telephone numbers that have been reassigned without the caller’s knowledge—as long as the caller previously obtained ‘prior express consent’ to place calls to that specific telephone number,” according to the FCC’s notice and request for comment.

Comments were due March 10, and a variety of companies and consumer groups did weigh in on this issue. It is not certain when the FCC will issue a declaratory ruling, or even whether the FCC may decide instead to take on various TCPA concerns through a rulemaking, as other petitioners have requested.

To read the FCC’s request for comment, click here

Why it matters: United’s FCC petition presents the not uncommon situation where a cellphone user changes his or her number. Should a company be liable under the TCPA for contacting the number, not knowing a different user is at the other end? Companies are hoping the FCC will answer “no.”

District Court Finds No TCPA Violation For Text Sent By System Lacking Present Dialing Capacity

The system used by a cab company to send text messages to customers does not constitute an automatic telephone dialing system (ATDS) under the TCPA, a Washington federal court has ruled.

Orange Cab Company relies upon TaxiMagic, a computer program that links dispatch terminals, mobile terminals operated by drivers, and an SMS modem, to send texts to customers. When a customer needs a ride, the dispatcher who answers the phone obtains the rider’s name, telephone number, and dropoff and pickup locations; the phone number may also be captured by caller ID. After a driver is selected, and “accepts” the ride, the program composes a text message to the consumer that confirms the cab number.

Plaintiff Torrey Gragg called Orange Cab to request a ride last February and received a text message reading “Taxi #850 dispatched @ 5:20. Smart phone? Book our cabs with Taxi Magic-#1 FREE taxi booking app http://cabs.io/29e1b7d.” Gragg filed a putative class action under the TCPA based on the text message, claiming that it was made with an autodialer without prior express consent.

But Orange Cab moved for summary judgment, arguing that the complaint lacked a necessary element of a TCPA claim: the use of an ATDS. The TaxiMagic program is only capable of generating and sending text notifications in response to a customer’s initial request for a cab, the company said, and is not capable of randomly or sequentially dialing numbers.

In a recent decision, U.S. District Court Judge Robert S. Lasnik first clarified that his analysis of the program’s status under the TCPA was based on its “present, not potential, capacity to store, produce, or call randomly or sequentially generated numbers.” Simply looking to a program’s potential capacity could lead to an absurd result, he noted, and would capture many of the most common technological devices within the statutory definition (including all iPhones).

“The telephone numbers utilized by the system are those provided directly by customers or captured using Caller ID and inputted by the dispatcher,” he wrote. “Plaintiff has submitted no evidence that the TaxiMagic program can autonomously, randomly, or sequentially generate numbers to be dialed as required to fulfill the statutory definition of an ATDS.”

The program also does not function as a predictive dialer, the court determined. “In order for a text dispatch notification to be sent to a customer, the customer must have first provided some amount of information to both the TaxiMagic program and the nearest available driver, and the driver must have pressed ‘accept’ on his or her mobile data terminal,” the court said. “The system is able to dial and transmit the dispatch notification only after the driver has physically pressed ‘accept’: human intervention is essential.”

To read the order in Gragg v. Orange Cab Company, click here.

Why it matters: In a valuable ruling for TCPA defendants, Judge Lasnik analyzed whether the present capacity of the system constituted an ATDS under the statute. This decision is one of a handful of decisions issuing recently from courts that are taking a common-sense approach to the TCPA’s statutory language in order to avoid “absurd” results. However, it is significant that many courts don’t seem to be as clear in their readings of “capacity,” and that the issue hasn’t been decided by appellate courts, so that the judicial interpretation of “capacity” is thus still up for grabs.

Four More Years and a TCPA Suit: Obama’s Reelection Campaign Can’t Get Case Dismissed

President Barack Obama’s reelection campaign organization cannot avoid a TCPA suit based on First Amendment grounds, a Florida federal court judge has ruled.

Lori Shamblin filed a putative class action suit against the president’s reelection organization, Obama for America. She alleged that from September 2012 until the November presidential election, the group violated the TCPA by making autodialed calls to her cell phone. Shamblin did not answer the calls and received prerecorded voicemails. Not only did she say that she had not given the group her express consent to call her, but also Shamblin claimed she had never even heard of Obama for America prior to receiving the messages.

The defendant responded to the complaint with a motion to dismiss that failed to sway U.S. District Court Judge Virginia M. Hernandez Covington.

“Obama for America suggests that First Amendment concerns are implicated by the complaint because ‘aggregating statutory damages may . . . chill political speech,’” she wrote. “However, Obama for America does not provide any specific arguments supporting dismissal of the present action on First Amendment grounds, or any other grounds for that matter.” Instead, the reelection campaign focused its motion on defeating class certification, an argument Judge Covington said was too early for the procedural posture of the case.

Noting that “[t]his action is in its infancy,” the court denied the motion to dismiss.

To read the order in Shamblin v. Obama for America, click here.

Why it matters: Unfortunately for fellow TCPA defendants, Obama for America failed to elaborate on its potential First Amendment arguments to avoid liability under the statute. As the case moves forward, the group could raise the issue again, possibly in a motion for summary judgment, which might yield a favorable judicial discussion of the issue.

Travel Company Flies Away From TCPA Liability By Showing Consent Through Provision Of Cell Phone To An Airline At Booking

By providing a cell phone number during the process of booking a flight, a plaintiff gave consent to be contacted at that number, a California federal court judge has ruled in dismissing a TCPA suit.

Shaya Baird booked flights online for herself and her family on the Hawaiian Airlines website. During the process, Baird was presented with spaces to enter a number for a mobile phone, home phone, or work phone with the statement, “At least one phone number is required.” Baird entered her cell phone number.

Three weeks later and about one month before her departure, Baird received a text message from Sabre, Inc., a travel technology company that contracted with Hawaiian, offering to reply “yes” to receive flight notification services. Baird’s response to the text: a putative class action complaint filed in California federal court alleging that Sabre violated the TCPA by sending her an unsolicited text message.

Sabre moved for summary judgment. The defendant argued that Baird consented to receive the text message by voluntarily providing her cell phone number during the online reservation process, even though the number was provided to Hawaiian Airlines and not to Sabre.

The court agreed.

U.S. District Court Judge Stephen V. Wilson found that the single text message sent to Baird’s cell phone fell within the scope of her prior express consent. The court cited an 1992 FCC Order, which stated that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” A myriad of federal district courts, mainly in California, have relied upon the language in that same 1992 ruling “to conclude that plaintiffs who provided a business with their telephone number and then received a text message from the business had no claim under the Act,” Judge Wilson said.

Judge Wilson acknowledged that the 1992 Order “is not a model of clarity” and that its language “drains the term ‘express’ in the TCPA of its meaning. Despite the weakness in this reasoning, however, the FCC appears to have intended its 1992 Order to provide a definition of ‘prior express consent’ in the TCPA.”

Therefore, “Under the FCC’s definition, it is undisputed that Baird ‘knowingly’ release[d] her cellphone number to Hawaiian Airlines when she booked her tickets, and by doing so gave permission to be called at that number by an automated dialing machine,” the court concluded. In finding that the plaintiff had given prior express consent for the text, Judge Wilson also noted the voluntary nature of her decision to provide a cellular number: “Baird’s act of providing her cellphone number was a voluntary act; she was not forced to book a flight on Hawaiian Airlines.”

To read the summary judgment order in Baird v. Sabre, Inc., click here.

Why it matters: Despite Judge Wilson’s misgivings with the 1992 FCC Order, he relied upon this interpretation to find that the plaintiff consented to receive the text message by providing her cellphone number during the online booking process. The significance is that Sabre was able to rely on consent provided to Hawaiian airlines as prior express consent for calls made by Sabre in connection with that Hawaiian flight, thus allowing a common-sense reading of consent to apply.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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