Club Insider

Telephone Consumer Protection Act Case Update

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Paul R. Bedard, EsquirePaul R. Bedard, Esquire

In July's issue of Club Insider, I provided some information and suggestions aimed at helping club owners and operators to maintain compliance with the Telephone Consumer Protection Act (TCPA) and to avoid the recent explosion of TCPA lawsuits. As I reported in July, the frequency of TCPA lawsuits has increased 1,298% between 2010 and 2016! Given this surge of litigation, and the potentially crippling financial repercussions, staying abreast of TCPA legal developments and maintaining compliance in this regard is essential.

When the TCPA was enacted in 1991, it placed restrictions on the use of automatic telephone dialing systems (ATDS). The statute defined ADTS as equipment with the capacity to store or produce telephone numbers to be called, using a random or sequential number generator to dial such numbers. It became unlawful to utilize an ADTS to make a call other than a call for emergency purposes or one where the prior express consent of the called party had been received.

The TCPA grants the Federal Communications Commission (FCC) the authority to create orders and regulations interpreting the TCPA. Since the TCPA was signed into law, various FCC rulings have clarified what technology qualifies as ATDS. Notably, the FCC's 2015 TCPA Omnibus Declaratory Ruling and Order interpreted a broader definition of ATDS to include those systems with the "potential" capacity to dial numbers randomly or sequentially.

Yet, earlier this year the U.S. Court of Appeals for the D.C. Circuit ruled to invalidate key aspects of the Omnibus ruling in ACA International v. Federal Communications Commission. The court in ACA International v. Federal Communications Commission, among other aspects, dismissed the FCC's broader Omnibus interpretation of what qualified as ATDS. The D.C. Circuit Court did not provide a definitive explanation of what qualified as ATDS but nonetheless provided a ruling that would trigger the FCC to provide further clarification of the rules.

In contrasting fashion, the U.S. Court of Appeals for the Ninth Circuit issued a ruling on September 20th of this year which adopts an expanded definition of what constitutes an ADTS under the TCPA. The court in Marks v. Crunch San Diego reversed a 2014 district court decision which had held that Crunch's automatic text messaging system that had sent messages to Marks was not an ATDS under the TCPA because it lacked the ability to store or produce telephone numbers to be called using a random or sequential number generator.

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