New Eleventh Circ. Ruling Applies a New Test to the TCPA
The cases concerned unwanted and unsolicited telephone calls received by the plaintiffs in their respective cases. The ruling creates a new opportunity for massive litigation to be filed against those who telemarket.
On Jan. 27, the U.S. Court of Appeals for the Eleventh Circuit decided two cases involving the same issue on appeal, one from the U.S. District Court for the Northern District of Georgia (the Evans case) and one from the U.S. District Court for the Middle District of Florida (the Glasser case). The cases concerned unwanted and unsolicited telephone calls received by the plaintiffs in their respective cases. The ruling creates a new opportunity for massive litigation to be filed against those who telemarket.
The statute at issue is the Telephone Consumer Protection Act (TCPA or act) passed by Congress in 1991. The act makes it illegal to “make any call … using any automatic telephone dialing system or an artificial or prerecorded voice” to “emergency telephone lines,” to “guest rooms or patient rooms of a hospital,” or “to any telephone number assigned to a paging service or cellular telephone service” without the “prior express consent of the called party,” 47 U.S.C. Section 227(b)(1)(A). The central issue and deciding factor in the two cases concerned the use of the “automatic telephone dialing system” which the act defines as “equipment that has the capacity—to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” The penalties established within the act award an aggrieved plaintiff $500 per each illegal phone call, and the act also awards treble damages if the caller “willfully” or “knowingly” violated the prohibition, where the court may award $1,500 or more per call.
The plaintiffs in each case, Melanie Glasser and Tabitha Evans, alleged that they each received over a dozen unsolicited phone calls to their cellphones. It should be noted that the act does not apply to residential land lines. Hilton Grand Vacations Co. (the company), called Glasser 13 times about vacation opportunities. The Pennsylvania Higher Education Assistance Agency (the called Evans 35 times about unpaid student loans. In the Glasser case, the majority concluded that the system used by the company did not qualify as an auto-dialer because it required too much human intervention to dial the telephone numbers. In the Evans case, the majority concluded that the agency willfully violated the act for 13 of the 35 calls that it made to Evans because those calls used an artificial or prerecorded voice, a separate means of violating the act.
The majority of the court held that in order for either to violate the act, auto-dialer equipment must conjunctively “store telephone numbers using a random or sequential number generator and dial them or produce such number using a random or sequential number generator and dial them.” The act’s prohibition on artificial or prerecorded voices means that telemarketers who dial lists of telephone numbers have three options: they may obtain consumers’ consent to robocalls; they may connect each potential customer with a human representative; or they may face liability under the act.
The court distinguished the Evans case, which it affirmed the award of treble damages to 13 of the 35 calls received, from the Glasser case, which the court affirmed the lower court’s decision in finding there was no liability for the company under the act. In the Glasser case, there was far too much human interaction to be considered an “automatic dialing system.” Essentially, the company utilized marketing teams to identify potential customers, program computer systems with the telephone numbers of customers who fit the standards, and then physically require human operators to press “call,” which connected the potential customer to a marketing representative. In the Evans case, the court found multiple levels of liability. First, the agency used automatic recordings. Second, the agency’s use of recordings amounted to a willful violation of the act and warranted treble damage because Evans revoked consent from receiving calls.
How It Significantly Affects Businesses Today
It was estimated that there were 4.17 billion robocalls placed in the United States in 2019. With telemarketing by way of robocalls continuing to grow, companies need to be aware of potential liability, including $500 per phone call and $1,500 per phone call if a consumer has previously revoked consent to receive these calls. Although burdensome, the current best practice is to have some level of human intervention before a call goes out, including servicing the telephone numbers on the generated client lists, as well as adhering to requests from consumers who explicitly revoke consent. Because this is an Eleventh Circuit ruling, it is binding on all federal courts in Florida where act cases will have to be filed. Lastly, the floodgates may open as the court found no issue of standing because “the receipt of more than one unwanted telemarketing call is a concrete injury that meets the minimum requirements of Article III standing.”
Charles M. Tatelbaum is a director and Thomas Sternberg is an associate at Tripp Scott in Fort Lauderdale.