Surprising Results for U.S. Chamber Statistics on TCPA Cases

Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

During a 17-month period after the Federal Communication Commission’s July 2015 order, the U.S. Chamber Institute for Legal Reform compiled a database of 3,121 Telephone Consumer Protection Act cases filed between Aug. 1, 2015, and Dec. 31, 2016, to examine the trends of TCPA litigation.

The U.S. Chamber found that TCPA litigation has increased 46% since the FCC’s July 2015 declaratory ruling and more than 30% of the cases brought are class actions. The litigation also has a widespread reach across various industries and geographical regions. Of the industries that have been targeted, the financial industry has been hit hardest. Of the cases filed, 36% have been brought against banks and other financial entities, followed by the collections industry with 18% of the cases. Other industries that have been targeted in TCPA litigation include healthcare (8.4%), retail (7.1.%), education (6.6%), marketing (2.3%) and the auto industry (2.2%). The increase in the number of cases filed also showed a trend of repeat players and professional plaintiffs in the space, with 60% of the cases filed by only 44 law firms. The most prolific filer of TCPA lawsuits was the Law Firm of Todd Friedman in Los Angeles, which filed 263 lawsuits, most of which were filed as class actions. Morgan & Morgan in Florida followed with 235 suits, and then Lemberg Law in Connecticut with 107 suits.

The geographic span of TCPA cases has also greatly expanded. Traditionally, TCPA cases were concentrated mainly in California, Illinois and Florida, but 40% of the litigation during the examined time period was brought outside of those three states. The sample spanned 42 states, with the top ten states accounting for nearly 90% of the cases filed. While California, Florida and Illinois still remain the top three states for TCPA litigation, the growing list of states now includes Georgia, New Jersey, New York, Texas, Pennsylvania, Tennessee, Missouri and Ohio.

Findings show that most TCPA cases end in settlements. The top ten TCPA settlements were between $23 million and $76 million, and 50% of the top ten settlements were made in the Northern District of Illinois. Half involved banks or financial entities—Capital One settled for $75 million, HSBC Bank for $40 million, Bank of America for $32 million, Wells Fargo for $30.4 million and Metropolitan Life Insurance for $23 million. Together, the financial services settlements are valued at over $200 million.

To read the study in U.S. Chamber Institute for Legal Reform’s TCPA Litigation Sprawl, click here.

Why it matters: The U.S. Chamber’s study shows an explosion of TCPA litigation since July 2015, when the FCC issued a major declaratory ruling. TCPA litigation continues unabated as businesses across a variety of industries and states face TCPA lawsuits, which may result in staggering settlements. Thus, compliance continues to be an essential part of any consumer outreach program.

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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