Boom in TCPA Litigation Continues, Though Lull Seen With FCC Appeal
Telephone Consumer Protection Act litigation -- which skyrocketed in the past half dozen years -- shows no sign of abating, TCPA experts tell us. But the targets of such suits are shifting, often to smaller companies, said Thomas Cunningham, a Locke Lord class-action practitioner. “The low-hanging fruit has all been picked.”
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Numerous complaints are on hold pending the outcome of the challenge before the U.S. Court of Appeals for the D.C. Circuit of the FCC 2015 TCPA declaratory ruling and order governing robocalls (see 1507130039); oral argument is Oct. 19 (see 1607250040). There has been a noticeable dip in class-action TCPA complaints in recent months as plaintiffs' attorneys wait for clarity from the D.C. Circuit on the nature of an automatic telephone dialing system (ATDS) before pursuing those claims, said Andrew Glass, a K&L Gates class-action litigation defense lawyer. The D.C. Circuit "could really change the playing field pretty significantly" if it says the FCC overstepped its bounds, he said.
In granting Time Warner Cable's motion for a stay in Fontest v. TWC, U.S. District Judge Christina Snyder of Los Angeles in her ruling (in Pacer) in December cited “the close divide amongst the FCC commissioners and the fact that at least one … believe the FCC’s ruling is ‘flatly inconsistent with the TCPA.’” And Senior U.S. District Judge Ronald Lew of Los Angeles in May similarly granted TWC a stay in a separate TCPA complaint. His order (in Pacer) said the ACA decision is expected to clarify what constitutes at ATDS and whether FCC use of the word capacity in its ATDS definition abuses the agency’s discretion.
Numerous multichannel video programming distributors have been hit with TCPA suits, but multiple lawyers told us such litigation hasn't targeted particular industries but has naturally centered around businesses with lots of customer contact by phone. The litigation often involves debt collection efforts, whether by third-party debt collectors or creditors collecting their own, said Joseph Wylie, a lawyer at K&L Gates with TCPA defense experience.
The trajectory of TCPA litigation also grew after the FTC, DOJ and four states alleged TCPA violations by Dish Network in calling numbers on the Do Not Call Registry and by making telemarketing robocalls to consumers (see 0903260144), with plaintiffs' lawyers often tending to follow what the government does, one lawyer who co-chairs a firm's TCPA practice told us. There had been hopes among companies subject to TCPA litigation that the FCC 2015 order might put in place rules that would tamp down on the suits, but the order went in the other direction and made defense more difficult, the lawyer said. Thune's office didn't comment.
Since 2010, “the litigation really ramped up [with] virtually tens of thousands now being filed," Locke Lord's Cunningham said, saying the growth rate in cases being filed seems to have plateaued. He said the value of cases is dropping because companies with the wherewithal to pay huge settlements are generally in TCPA compliance. Many companies have taken to buying specialized phone systems that comply with TCPA and don't constitute an ATDS, Cunningham said. The FCC 2015 order also encouraged more cases by lowering the bar for establishing who's using an ATDS, Cunningham said. MVPDs ranging from Comcast and DirecTV to Charter Communications and Dish are fighting various TCPA complaints in U.S. District courts around the country. Numerous companies didn't comment.
The amount of litigation on reassigned numbers, particularly individualized complaints rather than class action, has gone up notably since the 2015 order, Wylie said. One issue driving that is that more plaintiffs' counsel are getting into such cases, though they often don't have background in class action suits, Wylie said.
Commerce Committee Chairman John Thune, R-S.D., called for a "balanced solution" to TCPA during a committee hearing in May (see 1605180069). But a number of TCPA lawyers told us they don't expect substantive changes anytime soon, given the political challenges. With the main violators tending to telemarketers and debt collectors, Cunningham said, "Nobody wants to go to bat for those particular industries.”
Larger companies typically are aware of TCPA strictures and are aggressive about compliance, Wylie said. But staying in compliance is challenging "when you have a sea change in the environment such as the 2015 order," Wylie said. "It causes companies to have to reassess their systems."