United States: TCPA Tracker For September - October 2023

Cases of Note

Ninth Circuit Affirms Decertification of Class under Amerifactors and Denies Treble Damages

In True Health Chiropractic, Inc. v. McKesson Corp., the Ninth Circuit affirmed the district court's grant of summary judgment for Plaintiffs. However, Plaintiffs' victory was cut short by the Court's decision to affirm decertification of the class, and deny "willful and knowing" treble damages.

Plaintiffs alleged they received thirteen advertising faxes from Defendant offering discounts on medical billing software. Though Defendant argued that Plaintiffs consented to these faxes by willingly providing their contact information, including their fax numbers, on registration forms, according to the court, "nothing about the form would suggest to a reasonable consumer that, upon submitting the form, he or she had agreed to receive faxed advertisements." This defect was also not cured by the end-user license agreement ("EULA"), which stated that the contact information was collected to "assist [Defendant] in offering End User other features and services."

Despite this finding, the Ninth Circuit agreed with the Northern District of California that they were bound by the FCC's Amerifactors declaratory ruling, which established that the "TCPA does not apply to faxes received through an online fax service." (In re Amerifactors Fin. Grp., LLC Pet. for Expedited Declaratory Ruling, 34 FCC Rcd. 11950, 11950-51 (2019)). Because Plaintiffs could not distinguish class members who had received faxes on a stand-alone fax machine from those who had received them through an online fax service, the class was divided. The Stand-Alone Fax Machine class was decertified, and summary judgment was granted for Defendant as to the Online Fax Services class.

Finally, in response to Plaintiffs' claims for treble damages, which may be awarded if a defendant "willingly or knowingly" violated the TCPA, the Court agreed with the Eleventh Circuit's determination that "this standard requires more than merely intentional or volitional action." The Court found defendant's TCPA violation to be "merely careless," and affirmed denial of treble damages.

True Health Chiropractic, Inc. v. McKesson Corp. (True Health II), No. 22-15710 (9th Cir. Oct. 25, 2023).

Court Rejects Constitutional Arguments Against FCC's TCPA Interpretation, Dismisses Claim

The District of Arizona recently dismissed a TCPA claim despite objections from the Plaintiff that court deference to the FCC's interpretation of the statute was constitutionally impermissible. Plaintiff Patricia Crawford alleged TCPA claims against Defendant National Rifle Association, a political action committee, for allegedly sending a text message to the Plaintiff's cell phone, without her consent, that included a video file that allegedly included a pre-recorded voice message.

Plaintiff argued, under several constitutional principles, that the exceptions to the TCPA enumerated by the FCC in 47 C.F.R. § 64.1200(a)(3) were unconstitutional, and therefore should be given no deference by the Court. The Court rejected each of these arguments in turn. First, the Court rejected Plaintiff's argument that the "major question doctrine" required courts to disregard any FCC interpretation of the statute. The crux of plaintiff's argument was that the FCC's enumeration of exception to the TCPA surpassed the authority that Congress intended to confer to the FCC. The Court rejected that argument because the plain language of the TCPA demonstrates that Congress did intend for the FCC to have the power to carve out exceptions to the statute. The Court also held that the FCC's ability to carve out exceptions to the TCPA is not the type of "unheralded agency power" that implicated the "major question doctrine."

Second, the Court rejected Plaintiff's argument that deference to the FCC and the exceptions to the TCPA enumerated in the federal register violate the First Amendment. The Plaintiff's arguments primarily pointed to provisions regulating calls "not made for a commercial purpose" or "on behalf of a tax-exempt organization" that Plaintiff argued implicated free speech principles. The Court rejected this argument as well. The Court held that the Hobbs Act, which commits the authority to review "final" FCC orders to the exclusive jurisdiction of the federal appellate courts rendered the Court without jurisdiction to review the constitutionality of provisions established in the federal register, and therefore moved to evaluating the merits of the Defendants motion to dismiss.

Having rejected Plaintiff's constitutional concerns, the Court proceeded to rule on the substance of the motion to dismiss. Though the messages included a video attachment, they did not include an automated voice that immediately began playing upon being opened. Therefore, the Court held that they did not violate the TCPA. The Plaintiff had to affirmatively open and play the video in order to hear it. Therefore, the text message that Plaintiff received did not constitute a "call" made using a "prerecorded voice.

Further, the Court concluded that the Defendant's messages were exempt from the TCPA, as 47 C.F.R. § 64.1200(a)(3)(iv) explicitly exempts communications by a "tax-exempt nonprofit organization" from the TCPA. Because Defendant fit this description, the Plaintiff's TCPA claims lacked merit and were dismissed.

Crawford v. Nat'l Rifle Ass'n of Am., No. CV-23-00903-PHX-SPL, 2023 WL 7301864 (D. Ariz. Nov. 6, 2023)

SDNY Dismisses Plaintiff's TCPA Claims Over Text Received One Business Day Following Opt-Out Request

The Southern District of New York dismissed Plaintiff's TCPA claim because Defendant's failure to comply with Plaintiff's opt-out request within one business day was not unreasonable.

Plaintiff Eitan Barr brought suit against Defendant Macy.com LLC based on his receipt of a solicitation text message three days - but only one business day - after he opted out of receiving texts by replying "STOP" to Defendant's earlier message. Plaintiff alleged that Defendant failed to maintain an internal Do Not Call list, and failed to honor Plaintiff's request to not be contacted, in violation of the TCPA.

The Court found Plaintiff's claims conclusory. The Court noted that Plaintiff did not allege that he took any action to investigate whether Defendant maintained an internal DNC list, such as requesting such a list from Defendant. Further, under 47 C.F.R. § 64.1200(d)(3), a defendant has 30 days to comply with a DNC request, and the Court "struggle[d] to see how failure to comply with Plaintiff's DNC request within one business day could be unreasonable." The Court therefore dismissed Plaintiff's TCPA claim.

Because Plaintiff is a Florida resident, he also brought claims under the Florida Telephone Solicitation Act ("FTSA"). However, since the Court dismissed the federal TCPA claim, and "no party has asked the Court to exercise supplemental jurisdiction in the absence" of the TCPA claim, the Court declined to exercise supplemental jurisdiction over the FTSA claim.

Barr v. Macys.com, LLC, 2023 U.S. Dist. LEXIS 176653 (S.D.N.Y. September 29, 2023)

Failure to Allege Use of ATDS Fatal to Plaintiff's Claims

The Eastern District of Pennsylvania recently dismissed a claim brought against Defendant CMI Marketing Research, Inc., a marketing company whom Plaintiff alleged used calls purporting to collect survey data as a "pretext" for telephonic marketing. Plaintiff alleged that he received six separate calls from Defendant, and that the number he was called from connected him to Defendant.

Plaintiff's claims, however, brought on the basis that Defendant used an ATDS to call him, fell short of adequately alleging as much. Plaintiff alleged that his phone number was a part of a "computerized list" that asserted could be "used to call recipients sequentially . . . using an ATDS."

In analyzing Plaintiff's claim, the Court concluded that he failed to adequately allege that Defendant actually used an ATDS. In order to qualify as an ATDS, the technology at issue must "have the capacity to either store a telephone number or to produce a telephone number using a random or sequential number generator." While Plaintiff alleged that his number was a part of a "computerized list" from which Defendant made calls, it was not clear from the complaint how or whether the "random or sequential-number generation" was used. While Plaintiff might have adequately alleged that Defendant was using an automated system to dial the numbers, there were no allegations that Defendant used a system that was capable of "produc[ing] or stor[ing] telephone numbers through random or sequential number generation." That Plaintiff's number was a part of a pre-determined list said nothing about whether his number was stored or generated using a random or sequential number generator. The Court therefore dismissed the TCPA claim and the Complaint in its entirety.

Perrong v. CMI Mktg. Rsch. Inc., No. CV 22-3733, 2023 WL 6277299 (E.D. Pa. Sept. 26, 2023)

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