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TCPA AND WIRELESS MARKETING AT THE FCC, THE FTC, AND IN THE
COURTS
William B. Baker
Wiley Rein LLP
September 19, 2014
San Jose
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Why You Should Care
• Hundreds of lawsuits
• Hundreds of $millions in payouts
– Capital One: $75 million
– Bill Me Later: $9.9 million
– Sprint: $7.5 million
– L.A. Clippers: $5 million
• Insurance coverage uncertain
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Different rules for different media
• Subject to variety of federal (and state) laws enacted over 30 years with non smartphones in mind
• Opt-in or opt-out
• Consent: oral, written or none
• Rules vary with technology
• Rules vary with format of address
• Enforcement mechanisms vary
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Which laws apply depends on the technology used
• Voice • TCPA, Do Not Call,
Telemarketing Sales
Rule
• Text • TCPA, Do Not Call
• Email • CAN-SPAM (FTC &
FCC)
• Mobile App • FTC Section 5;
(TSR?)
• Browser • FTC Section 5
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TCPA, 47 U.S.C. §227(b)(A)
• “Unlawful . . . to make any call . . . using any automatic telephone dialing system or an artificial or prerecorded voice-- . . .
(iii) To any telephone number assigned to a paging service, cellular telephone service . . . for which the called party is charged for the call”
FCC can exempt calls that are not charged to user.
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What Is A “Call”
• Voice, text
• YouMail FCC petition (software-based menu of advanced voicemail features)
• VoAPPS FCC petition 7/31/14: service leaves message in wireless vm without calling device
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What is an “ATDS”?
47 USC 227(a)(1) The term “automatic telephone dialing system” means equipment which has the capacity— •to store or produce telephone numbers to be called, using a random or sequential number generator; and •to dial such numbers.
FCC (2003 & 2007): “capacity” to store or produce numbers using a random or sequential number generator and “to dial” without “human intervention” FCC has focused on capability, not actual usage, due to predictive dialers
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Many have asked FCC to Reconsider or Modify ATDS Definition
• Cargo Airline Ass’n (2014): exempted package delivery text notifications
• 22 petitions for reconsideration/clarification/exemption currently pending at FCC. 9 address “ATDS”
• Some seek to loosen: PACE, ACA, TextMe, Glide Talk: limit “capacity” to configuration when calls placed
• Or to broaden: Fried: if “combined equipment” collectively can have “capacity” to store or produce numbers and dial at random, sequentially, or from a database
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Court Rulings Are Mixed
Compare Satterfield v. Simon & Schuster (9th Cir. 2009) & Sherman v. Yahoo (S.D. Cal. 2014) (potential) with Gragg v. Orange Cab (W.D. Wash 2014) (present capability required) & Hunt v. 21st Mortgage Co. (N.D. Ala. 2013) (no liability if substantial modification required to produce calls from number generator)
Sterk v. Path (N.D. Ill. 2014) (stored #s without “human intervention” –numbers provided by 3d persons); interlocutory review pending
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TCPA: Prior express consent exception
• FCC (1992) (knowing release of phone number is permission)
• “absent instructions to the contrary”
• Consents do not expire
• FCC (2012) required PEC for telemarketing to be in writing as of 10/16/13 and freely given
• FCC (2012) also eliminated 20-year old EBR exception
• FCC has exempted entities subject to HIPAA
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FCC Rulings on Prior Consent
GroupMe (2014): prior express consent to non-telemarketing texts can be obtained by an intermediary
SoundBite (2012) (permitting one-time text to confirm revocation of consent)
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And in the Courts
• Courts have found consent in strange places
• Provided for verification purposes 10 years before the calls were made. Kolinek v. Walgreen Co. (N.D. Il.. 2014)
• Airline web form. Baird v. Sabre, Inc. (C.D. Cal. 2014)(transactional texts)
• Blood donor form. Murphy v. CDI Biologicals Orlando (M.D. Fla. 2013).
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Can consent be revoked?
• Yes. Gager v. Dell (3d Cir. 2013)
• Implicitly: SoundBite (FCC 2012) (one-time text to confirm revocation of consent)
• Maybe not: Santander Consumer USA FCC petition re non-telemarketing calls and texts
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FCC: Pending Petitions
• 7 out of 22 as of 9/15 address “prior written consent”
ACA: Prior express consent/debt calls
Satcom: Mobile numbers provided prior to 2012 FCC order
Coalition: PWC provided prior to 10/16/2013
DMA: Asks for forbearance for consents obtained prior to 10/16/2013
RILA: “On-Demand” text services
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THE EFFECT OF NUMBER REASSIGNMENT ON CONSENT
Calls to ported or reassigned numbers (6 petitions)
– United Healthcare: seek exception/exemption for informational calls to numbers ported to wireless unbeknownst to caller
– ACA: wants “safe harbor” for autodialed non-telemarketing calls to “wrong numbers”
– Comcast: exception for any calls to reassigned numbers where caller had PEC and caller unaware of reassignment
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– Stage Stores: asks exception for call to wireless number for which prior express consent existed before reassigned without notice/knowledge of caller
– Rubio’s (8/11): seeks exception where employer has PEC to “remote text messaging alerts” to employees, then number is reassigned without its knowledge.
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And in the Courts:
Consent to calls to someone else’s phone
• Soppet (7th Cir. 2012): called party means called party
• Osorio (11th Cir. 2014): current subscriber (housemate’s cell number provided on credit application – agency?)
• Lamont (D.N.H. 2014) (spouse cannot consent for telemarketing to other spouse’s cell phone)
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Searching for Defendants
• DISH Network (FCC 2013): sellers can be vicariously liable for actions of its telemarketers
• Extent of vicarious liability
• Lucas (FCC petition): person assisting telemarketer and “knows or consciously avoids knowing” of TCPA violations
• Smith v. State Farm (N.D. Ill. 8/11/2014)
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Emails: CAN-SPAM Act
• FTC (2004): “Opt-out” for commercial emails
• FCC (2004): Opt-in for “Mobile service commercial messages”
– Addressed to wireless domains
– “express prior authorization”
– Can be oral, unlike TCPA “PEC”
• FCC: Texts are “calls” not “emails”
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“Do Not Call” Mobile Devices
• FTC established registry under TCFAPA & TSR
• FCC extended scope under TCPA
– FCC already had company-specific
• Mobile numbers eligible
• “EBR” is exception to Do Not Call, but not to ATDS
• Limited safe harbor for erroneous calls to mobile devices on DNC registry
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Text Marketing
• FCC: Texts are “calls”
• Accord Joffe v. Acacia Mortgage (Ariz. 2005); Satterfield (9th Cir.)
• TCPA & TSR apply: ATDS & DNC restrictions
• SoundBite (FCC 2012): confirmatory texts ok w/in 5 minutes
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FTC & Mobile Apps
• Mobile Apps
– Shopping Apps (Aug. 2014)
– “Dot.com Disclosures” (Mar. 2013)
– NTIA multistakeholder process
• Is location “sensitive”
– Mobile App Privacy Disclosures (Feb. 2013)
– COPPA: yes, and specifically applies to mobile apps
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Private Lawsuits
• Two private rights of action under TCPA
• ATDS/prerecorded to mobile ($500)
• Do Not Call ($500)
– Penalties per call
– Treble damages for knowing/willful
– Class actions
• FTC Act/TCFAPA enforced by agency.
• Insurance coverage?
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For Further Info:
• “The Complications of Doing Mobile Marketing Legally,” Journal of Internet Law (Feb. 2014)
• “Telemarketing and Robocalls,” FCC http://www.fcc.gov/encyclopedia/telemarketing
• “Marketing Your Mobile App: Get It Right from the Start ,” FTC Staff (April 2013) http://business.ftc.gov/documents/bus81-marketing-your-mobile-app
• “Mobile Privacy Disclosures: Building Trust Through Transparency: An FTC Staff Report”, (Feb. 2013)