Part I – TCPA: Regulatory
Commission Releases and Actions
FCC Adopts Proposed Rules on Reassigned Numbers Database
On March 22, 2018, the Federal Communications Commission (FCC) adopted a Second Further Notice of Proposed Rulemaking (FNPRM) proposing the creation of a reassigned numbers database. Under the proposed rules, the FCC will ensure that a database is available to provide callers with the timely and comprehensive information they need to avoid calling reassigned numbers. The FNPRM also seeks comment on the kind of information that callers need from such a database, the best way for service providers to report this information, and whether the FCC should adopt a safe harbor from TCPA liability for callers who check the database.
The adopted FNPRM was changed from the draft version Chairman Ajit Pai circulated to include wording that addressed the long-awaited U.S. Court of Appeals TCPA ruling in ACA International v. FCC, issued just days prior to the vote. In particular, the FNPRM contains a paragraph seeking comment on the impact of the decision and how possible FCC action in response to that decision could affect the costs and benefits of the database options discussed in the FNPRM. Because of the Court’s decision to set aside the one-call safe harbor as arbitrary and capricious, coupled with the FCC’s increasing focus on cost-benefit analysis, the FCC may now be more likely to adopt a voluntary, rather than mandatory, approach to the reassigned number database.
Despite voting in favor of the proposal, Commissioner Michael O’Rielly said that the database proposal needed to be reassessed in light of the ruling and that more data is needed. In his written statement, he said the FCC should remain focused on “bad actors,” and said ideas “designed to help legitimate businesses operate within the confines of the largely defunct [2015 TCPA Omnibus] Order need to be reexamined closely and methodically.” Taking the opposition position, Commissioner Jessica Rosenworcel called the database “an effort to provide a legal green light for robocallers,” adding that “as long as they consult this list before dialing, they will be free from liability under the [TCPA]. So this protects robocallers.” Commissioner Rosenworcel lamented that it has been six months since the FCC initiated its last robocalling enforcement action; she called on the FCC to move forward with call authentication efforts, including the SHAKEN-STIR framework, which stands for Signature-based Handling of Asserted Information Using to-KENs (Shaken) and Secure Telephone Identity Revisited (Stir), that is already being implemented in Canada.
FCC and FTC Hold Joint Policy Forum on Robocalls
The day following the Commission vote, the FCC and the Federal Trade Commission (FTC) co-hosted a Joint Policy Forum on combating illegal robocalls, which highlighted recent policy changes, developments, and enforcement actions, as well as technical solutions and tools aimed at fighting the scourge of illegal robocalls. Speakers included the recently installed FCC Chief of Consumer and Governmental Affairs Patrick Webre, FCC Chairman Pai, and FTC Acting Chairman Maureen Ohlhausen, in addition to speakers from divisions and bureaus leading these efforts at the FCC and FTC, and the technology, consumer advocacy, and regulatory communities.
April has been a quiet month thus far on the TCPA front, and no TCPA-related items are scheduled for consideration during the Commission’s April Open Meeting.
Part II – TCPA: Class Action & Litigation Updates
A New Ruling Offers a Useful Tool for Limiting the Size of a TCPA Class
Roughly around this time last year, the U.S. Supreme Court issued its ruling in Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017), wherein the Court rejected the California Supreme Court’s finding of specific jurisdiction over mass tort claims filed by nonresidents.
There, plaintiffs consisted of mostly non-California residents who were injured outside of California. As Bristol-Myers is incorporated in Delaware and headquartered in New York and maintains substantial operations in both New York and New Jersey, the U.S. Supreme Court found that the California courts lacked specific jurisdiction over the company in regards to nonresidents. “The mere fact that other plaintiffs were [harmed in] California does not allow the State to assert specific jurisdiction over the nonresidents’ claims.” Id. at 1776 (emphasis added). However, Bristol-Myerswas a mass tort case, and its application in a class action context was not discussed.
Application to the Class Action Matters:
Last month, on March 12, 2018, U.S. District Judge Thomas M. Durkin applied the Bristol-Myersreasoning to a Telephone Consumer Protection Act (TCPA) class action matter. In Practice Management v. Cirque Du Soleil, 2018 WL 1255021 (N.D. Ill. Mar. 12, 2018), the district court considered whether to certify a nationwide class under the TCPA, given that the court lacked general jurisdiction over the defendant; specific jurisdiction depended entirely on a fax received by the named plaintiff in Illinois.
The Cirque Du Soleil court found “that the Fourteenth Amendment’s due process clause precludes nonresident plaintiffs injured outside the forum from aggregating their claims with an in-forum resident.” Id. at *47. And given that “Rule 23’s [class action] requirements must be interpreted in keeping with Article III constraints and with the Rules Enabling Act—which instructs that federal procedural rules may not abridge substantive rights . . . a defendant’s due process interest should be the same in the class context.” Id. at *48. Therefore, the court held the Bristol-Myers reasoning applied in the class action context and prevented the court “from exercising personal jurisdiction over defendants with respect to the claims of non-Illinois-resident class members.” Id. at *7. The court dismissed the claims of non-Illinois residents and limited class certification to include only Illinois residents who received the faxes.
This is a great ruling from the perspective of defendants that are defending TCPA class actions. Both Cirque du Soleil and Bristol Myers-Squibb should be raised at class certification, as they are useful tools for limiting the size of the potential class. To avoid these hurdles, Plaintiffs’ counsel will now need to either find named plaintiffs and file a suit in every state or sue the defendant corporation on its home turf.