A statutory “safe harbor” within the Telephone Consumer Protection Act (TCPA) may have become a bit safer after a federal court reinforced what defendants must do to secure statutory protection from high-dollar TCPA lawsuits.

The TCPA, found at 47 U.S.C. § 227, places strict rules on when and how business entities may make telephone solicitations. Unless recipients have given prior express consent, the TCPA and Federal Communications Commission rules prohibit companies from calling residences before 8 a.m. or after 9 p.m. (local time based on the location of the call recipient), requires solicitors maintain a company-specific “do not call” list that must be honored for five years, and requires solicitors to respect the national Do Not Call registry, among other prohibitions and regulations. Violation of these rules can give rise to significant damages, as the statute provides plaintiffs with the right to sue for $500 per violation, with no cap on liability.

For many companies that communicate with consumers and customers via text and phone calls, the TCPA presents a significant threat of class action liability. The TCPA is a strict liability statute, so mistake is not generally a defense. That said, the law also provides defendants with a number of potential (but rarely invoked) “safe harbors.” These statutory shields block potential liability for allegedly unlawful calls, if a defendant can satisfy the elements of the safe harbor.

One such safe harbor protects callers from liability for calling an individual on the Do Not Call registry, provided that the calling party: (1) called the individual in error; and (2) has established adequate procedures to avoid mistakenly calling individuals on the registry.¹ This provision is only available for claims related to the TCPA’s restrictions on calling numbers on the National Do Not Call Registry and requires a relatively heavy evidentiary showing. Although defendants in TCPA actions often cite this safe harbor as an affirmative defense, there are relatively few instances in which a defendant successfully invoked the defense. In light of that, defendants in TCPA class actions should take note of the decision in Johansen v. Efinancial Llc, No. 2:20-cv-01351-DGE, 2022 U.S. Dist. LEXIS 8798 (W.D. Wash. Jan. 18, 2022), where a court made three significant holdings relevant to the safe harbor defense.

First, the Johansen court ruled that consent to be called can be properly obtained via online disclosure agreement. In doing so, the court disagreed with a Massachusetts federal court that had held that a caller cannot rely on a TCPA consent disclosure on a website without a separately signed ESIGN agreement to do business with the caller electronically.²

Second, the court, in addressing the plaintiff’s argument that he never submitted an online disclosure agreement, found that the plaintiff’s behavior in “posing as a customer” in a call with an agent of the defendant refuted any claim that plaintiff had not consented to the calls. This holding comes on the heels of another dismissal of a TCPA case involving the same serial plaintiff.³ In fact, a footnote in Johansen discussed the plaintiff’s deceptive conduct specifically, noting his prior 60 TCPA lawsuits and his “typical practice” of feigning interest in defendants’ solicitations.

Finally, the court held that, even if there were a question of fact as to the plaintiff’s consent, the defendant company had implemented policies that substantially complied with 47 C.F.R. §§ 64.1200(c)(2)(i)’s safe harbor provision, shielding it from liability. Traditionally, courts are hesitant to credit defendants’ assertions of safe harbor under 47 C.F.R. §§ 64.1200(c)(2)(i) at summary judgment, preferring to send such questions to a jury. The Johansen court, however, had no such compunctions and found that Efinancial has a routine business practice of complying with the standards required by the safe harbor provision. Significantly, the court held that these standards “substantially complied,” with the purpose of the TCPA, even though Efinancial did not produce evidence showing that it purchases or accesses the Do Not Call list prior to making calls. In doing so, the court explicitly disagreed with the plaintiff’s argument that substantial compliance is insufficient to take advantage of the TCPA’s safe harbors.

For businesses that make use of telephone solicitations, Johansen v. Efinancial underscores the power of meticulous recordkeeping and implementing stringent policies and procedures. By implementing the standards laid out in 47 C.F.R. §§ 64.1200(c)(2)(i), businesses can mitigate against potential class action liability.  In cases like Johansen v. Efinancial, federal judges are drawing a line with serial plaintiffs who use questionable tactics to manufacture TCPA claims, but they are also showing businesses how best to protect themselves against potential class action liability.

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