April 27, 2015

American Energy Companies Latest Victims of TCPA Lawsuit Abuse

We’ve told you in recent weeks how the Telephone Consumer Protection Act, or TCPA, is being abused by plaintiffs’ lawyers looking to score big paydays from companies that use autodialing technology to communicate with their customers.

You can now add the energy companies associated with the Edison Electric Institute (EEI) and the American Gas Association (AGA) to Mammoth Mountain Ski Area and the rest of the list of businesses who’ve found themselves on the receiving end of malicious litigation over the TCPA.

The TCPA is an antiquated law from 1991 that was written to protect people from unwanted autodialed or prerecorded telemarketing calls to cell phones. For all the law’s noble intentions, it was morphed into something far more sinister. Today it has become a vehicle for trial lawyers to seek big payouts from malicious lawsuits. And it’s clearly big business, with TCPA litigation growing by 560% between 2010 and 2014.

EEI and AGA are seeking to have the FCC clarify that autodialed and/or prerecorded message to customers of energy companies about outages in their area, or providing warning notices prior to disconnection for non-payment are not prohibited by the TCPA. As we note in our comments submitted to the FCC, the TCPA was never intended to curtail these kinds of calls:

There should be no argument that the types of calls described in the Petition fall under the informational call category that can be placed via autodialed/prerecorded calls to wireless phones without TCPA liability.The purpose of the calls described by the Petitioners is not to sell anything to consumers but to communicate time-sensitive service notification, warnings before non-payment disconnects, and other important information. Therefore, it seems to be completely reasonable that there should be no TCPA liability as long as the utility can show that the phone number was provided by the customer in connection with the establishment or connection of service.

However, utility companies—just like businesses in every other sector of the American economy—are confronting the current reality of TCPA litigation: plaintiffs and TCPA lawyers are filing lawsuits with the hope that the burdens and costs of defending a TCPA action (often in federal court and often involving a nationwide putative class) will encourage a lucrative settlement.

Specious litigation abusing the TCPA is having a chilling effect on companies seeking to communicate with their own customers. Companies now have to be concerned about a potential lawsuit every time the press “dial” on a call to customers.

And less communication means that customers will be in the dark — literally and figuratively — about problems like power outages and service repairs, and will risk disconnection without reminder calls for bill payment.

This is now the fifth letter that ILR and the U.S. Chamber have filed with the FCC, in addition to a multi-association letter signed by more than thirty trade associations and sent to the FCC in February. Despite these letters, the FCC so far has failed to act.

We encourage to the FCC to act swiftly and clarify that the TCPA never intended to curtail these kinds of calls.

You can read our full comments submitted to the FCC by clicking here.

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