December 2012

In this issue:

  • The FTC has offered a $50,000 cash prize to a member of the public who can provide a technical solution to illegal prerecorded telephone calls.
  • A federal court in Illinois has ruled in favor of a plaintiff who alleged receipt of illegal faxes. Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC. The defendant claimed that the complaint did not include proof of receipt of a fax.
  • A federal judge in Washington State has certified a class action against Papa John’s International and related companies for illegal text messages.

Federal Trade Commission
The FTC has offered a $50,000 cash prize to a member of the public who can provide a technical solution to illegal prerecorded telephone calls.

Comment: Legitimate businesses should welcome the attention this offer will create.  Those legitimate businesses have born the burden of illegal actors’ calls for many years as the FTC and FCC rules get harsher and harsher but apply only to companies interested in compliance.

Alabama
An Alabama court has dismissed a putative class against Walmart Stores alleging unauthorized text messages. Pinkard v. Wal-mart Stores, Inc.  The defendant argued that the plaintiff consented to the message by providing her telephone number to the defendant.

Comment: This case is excellent as it clearly discusses the FCC’s ruling that a person providing his or her telephone number to a business expressly consents to calls or texts from that business absent instructions to the contrary.  It also details the FCC’s recent changes to its regulations for marketing rules, which are not yet in effect.

Florida
A Florida court has dismissed a suit brought by a debtor against an insurance company.  Astoria v. State Farm Bank.  The company contacted the debtor on his cell phone.  A person living with the debtor sued the bank in response to a collection call to a number provided by the debtor.  The court ruled that State Farm was permitted to call the number provided by the debtor.

Illinois
An Illinois court has ruled in favor of a plaintiff allowing a case to continue alleging a debt collector called her on her cell phone without express consent.  Anderson v. Leading Edge Recovery Solutions.  The plaintiff argued that Capital One’s debt collector could not contact her even if Capital One was authorized to do so.  The defendant was not able to show that the plaintiff had willingly provided her cell phone number to Capital One.

A federal court in Illinois has ruled in favor of a plaintiff who alleged receipt of illegal faxes.  Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC.  The defendant claimed that the complaint did not include proof of receipt of a fax.

Idaho
The Attorney General of Idaho has revised its registration policies to require registration only for sellers, and not the telemarketer who sellers may hire.

Indiana
The Seventh Circuit Court of Appeals has ruled that an offer of judgment for an FDCPA claim can moot a purported class action such that the named plaintiff can no longer proceed with the case.  Gonon v. Allied Interstate, LLC.

Comment:  An offer of judgment may be an important defense with regard to TCPA claims.  This case reinforces the value of such an offer.

Maryland
The Fourth Circuit Court of Appeals has affirmed the trial court’s ruling against a private plaintiff and in favor of a debt collector.  Worsham v. Accounts Receivable Management.  The debt collector called the plaintiff’s number attempting to locate a debtor, who is his sister-in-law.  The prerecorded message in the call asked him to press one if he was the sister and two if he was not.  Worsham claimed that these calls violated the TCPA and state law.  Most importantly, the Fourth Circuit ruled that the plaintiff did not have a private cause of action against a debt collector for failure to include certain disclosures required by TCPA regulations.

Comment: Most courts have ruled that private plaintiffs may sue for illegal calls, but not for alleged violations of regulations contained in those calls.  Some private plaintiffs have made claims for damages for a single call exceeding $10,000, when the statute provides for $500 to $1,500 per illegal call, and these court cases reject these inflated claims.

New York
New York’s registration requirements changed in early November and the office has had some backlog processing new registrations.  Businesses registering in the state have seen two week delays in processing applications, but that time period may shorten as the office processes an initial surge.

North Dakota
The North Dakota Attorney General’s office continues to be aggressive with regard to enforcement of its state law regarding prerecorded messages, which is more restrictive than the federal standard, even with regard to political calls.  That office will seek penalties for even one complaint.

Comment: Most regulators will allow some “grace” for minor violations.  The above stance is likely to generate a counter lawsuit eventually because North Dakota statute is so restrictive and inconsistently interpreted by that office.

Ohio
The United States Court of Appeals for the Sixth Circuit has dismissed a purported class action brought against a radio station alleging its prerecorded calls violated the TCPA.  Leyse v. Clear Channel.  The court ruled that the FCC was authorized to exempt calls from the TCPA’s prohibition and was entitled to deference under the United States Supreme Court ruling in Chevron.

Washington
A Washington court has denied class certification in a purported class action against a payment processor.  Hartman v. United Bank Card, Inc.  The payment processor argued that calls placed by a third party should not be attributed to it, but the court disagreed.  The court, however, held that the case could not proceed as a class action because the court would have to hold individualized hearings for each potential call received in Washington to determine whether the call was a commercial solicitation or not.

A federal judge in Washington State has certified a class action against Papa John’s International and related companies for illegal text messages.  Maria Agne v. Papa John’s International.  The text company hired by Papa John’s claimed to be able to send texts solely based on a transactional relationship (or established business relationship).

Comment: Text messages are only allowed with express consent, and recent FCC regulations clarify this restriction.  The plaintiff’s attorneys in this case have estimated that it is worth more than $250 million in damages.