April 2011

In this issue

  • The United States Supreme Court ruled that AT&T could not block disclosure of information under the Freedom of Information Act by asserting privacy rights. Federal Communications Commission v. AT&T
  • The California Supreme Court has held that zip codes are “personal identification information” within the meaning of the State’s Song Beverly Credit Card Act.
  • The Oklahoma Senate is considering a bill which would amend the state’s telemarketing registration law to include solicitations via text message. Such calls would also be regulated by the state’s no-call list law.

FCC
The United States Supreme Court ruled that AT&T could not block disclosure of information under the Freedom of Information Act by asserting privacy rights.  Federal Communications Commission v. AT&T.  This decision is important for telemarketing compliance issues because state and federal “do-not-call” lists are constitutional based on individual’s rights to privacy, and thus legally protecting their right not to be called.  Because corporations do not have privacy rights, however, corporations can not be included on “do-not-call” lists.  The Court could rule that some other right which businesses do have could allow business-to-business “do-not-call” lists, although that seems unlikely.

There has been no update with regard to changes in the “express consent” standard for prerecorded or predictive dialed calls to cell numbers.  The FCC proposed a change in March 2010 but has not yet acted on that proposal.

A federal court has reviewed the “knowing or willful” trebled damages portion of the TCPA regarding whether “knowing or willful” applies to sending faxes or prerecorded messages or sending them knowing that the messages are illegal.  The court ruled that the defendant must only know of the facts of the case, not that those facts are illegal, and therefore “knowing or willful” damages could apply even if the caller did not know that the calls were illegal. Segenberger v. Credit Control Services.

The FCC has issued a forfeiture order against a group of travel companies (In the Matter of Mexico Marketing, LLC) after the company failed to respond to an FCC Citation alleging illegal faxes.  The Commission imposed a forfeiture of $.6 million against the company for willful violation of the TCPA.

FTC
The FTC has agreed to settle claims against three resellers of consumer credit reports based on allegations that the companies did not take reasonable steps to protect consumers’ personal information and that these failures allowed computer hackers to access the data.  The companies are required to submit to audits by the FTC for a period of 20 years and strengthen their data security procedures.

Alabama
An appeals court in the Eleventh Circuit has ruled that debt collection prerecorded calls were not subject to the TCPA’s ban on prerecorded calls because they did not introduce an unsolicited advertisement or contain a telephone solicitation.  Meadows v. Franklin Collection Service.

California

The California Supreme Court has held that zip codes are “personal identification information” within the meaning of the State’s Song Beverly Credit Card Act.  Song Beverly prohibits businesses from requesting personal identification information during credit card purchases in most circumstances.  This suit is likely to generate numerous class actions against California retailers.

Florida
A Florida court has ruled that there is no established business relationship from the TCPA’s ban on prerecorded calls to cell phones.  Bentley v. Bank of America.  Express consent or emergency are the only exemptions to that section.

Florida House Bill 5005 has passed both the Senate and House in Florida in different forms and would eliminate telemarketing registration in the state as part of a broader deregulation of professions and occupations bill.  It is likely that the bill will be passed and signed by the governor ultimately eliminating telemarketing registration in the state.  The bill does not affect Florida’s state “do-not-call” list which would still be available for purchase and enforced.

Illinois
An Illinois federal court has ruled that recipients of phone calls have no duty to mitigate damages for illegal calls received.  Powell v. West Asset Management.  In that case, the defendant argued that the plaintiff needed to advise the caller that it was calling the wrong party.  The court disagreed.

Maine
The State of Maine has changed the fees applicable for transient seller’s license and now charges $225 as an initial fee for a company (with a $10,000 bond) and an initial fee of $86 per employee.

New York
A bill has been proposed in the New York House which would change the state regulator of New York’s no call law from the Board of Protection in the Governor’s office to the Department of Financial Regulation.

Ohio
A federal court in Ohio has ruled that a plaintiff could not collect damages “per violation” of the TCPA but rather could only collect damages for each illegal call.  Charvat v. DFS Services.  The court also ruled that alleged violations of the TCPA were also not automatically violations of state consumer protection law absent some allegation of deception.

Oklahoma
The Oklahoma Senate is considering a bill which would amend the state’s telemarketing registration law to include solicitations via text message.  Such calls would also be regulated by the state’s no-call list law.

Pennsylvania
The Pennsylvania House is considering a bill (HB 951) which would amend the definition of telemarketing in the state’s registration statutes to include calls on behalf of a political party or candidate.  Pennsylvania’s registration statute contains many exemptions and it would be surprising to me that, even if amended, this statute would require registration of any political candidate.

Washington
The Ninth Circuit Court of Appeals in Washington has scheduled oral argument to consider the question of whether Washington’s state law bans a prerecorded telephone message which could not result in a “conversation” with the recipient of the call.  The Washington law, on its face, is limited to calls which generate a “conversation,” but the plaintiff argued that this language did not prevent the statute from applying to all prerecorded calls received in the state.  The plaintiff lost at trial but appealed to the ninth circuit.

Wisconsin
Wisconsin refers to purchase and implementation of its state “do-not-call” list as a “registration” and I recently heard that entities obtaining the Wisconsin “do-not-call” list for the first time were questioned regarding their previously year’s activity.  Most states do not inquire about calling activity prior to a registration attempt, so it is remarkable that Wisconsin may be investigating and/or prosecuting activities prior to a registration attempt.

Commentary

FCC Rule Change Still Not Enacted

Oral Argument Heard in Washington Preemption Case - Update to June 27, 2010