In the News Today - December 13, 2017

Defendants in long-running lead paint litigation to take case to Supreme Court

As the 26th anniversary of the Telephone Consumer Protection Act (TCPA) approaches on Dec. 20, even the name of this landmark statute suggests it is badly in need of an update.

When President George H.W. Bush signed the TCPA into law in 1991, “telephone” mostly meant a landline phone connected to the traditional switched network. Only three percent of Americans owned cell phones and the digital smartphone, with gigabits of memory and the capacity to store video, music and thousands of contacts, wasn’t even a glimmer in Steve Jobs’ eye.

The TCPA is still a vital tool in the Federal Communications Commission’s (FCC) fight against unwanted and irritating robocalls. But it has also become a gold mine for plaintiffs’ lawyers, who exploit ambiguous statutory language and a partisan 2015 FCC order to threaten legitimate businesses with billions of dollars in damages over minor or even nonexistent violations. With a statutory provision of $500 per unwanted call or text and treble damages for private plaintiffs, the law allows lawyers to extort settlements including millions of dollars of fees for themselves.

Many times, the plaintiffs in these cases are repeat players who have been known to buy as many as 35 cellphones in an effort to attract calls from innocent businesses that have no way of knowing a customer’s number has changed.

Lawsuits under the TCPA surged fifteen-fold between 2010 and 2016 to 4,100, and more than 3,700 additional suits have been filed this year against retailers, utilities, financial firms and even non-profit educational institutions. The Breast Cancer Society was sued over fundraising calls and a customer sued Häagen-Dazs for receiving a “thank-you” text for joining a rewards program – after she willingly gave the company her number.

The FCC made things even easier for plaintiffs’ lawyers in 2015 when it decided, on party lines, to expand the interpretation of “automatic dialer” to any device with the potential to dial numbers in random or sequential fashion – meaning virtually every digital communications device on the market today. The Commission also reinterpreted the law to require consent from whoever receives a call, not the person a business intended to call. That made it much harder for companies to defend themselves against lawsuits by people who obtain mobile phone numbers that were reassigned from legitimate customers. 

A recent study by the U.S. Chamber Institute for Legal Reform found a 46 percent increase in case filings in the 17-month period after the FCC’s 2015 decision, as opposed to the 17 months preceding the ruling. 

The federal appeals court for the District of Columbia is currently considering a lawsuit challenging the FCC’s 2015 reinterpretation of the TCPA. But the FCC shouldn’t outsource its job entirely to the courts. The TCPA remains a powerful weapon against abusive robocallers who invade the privacy of millions of consumers each day and should be used for that purpose, not enriching trial lawyers.

Despite many thousands of lawsuits against legitimate businesses, robocalls touting fraudulent travel and credit-card repair schemes still plague the nation’s landline and mobile phone systems. With the correct interpretation – in light of the many changes that have transformed digital communications since 1991 – the FCC should restore the TCPA to its proper role of protecting consumers while eliminating the ability of the trial bar to pervert it for financial gain.