March 2012

In this issue:

  • The FCC adopted changes in the Telephone Consumer Protection Act regulations which will require express written signed consent for text messages, prerecorded calls, and predictive dialed calls to cell phones. The rule goes into effect one year from publication in the Federal Register. Non-telemarketing messages will still be allowed with express consent (oral or written) but advertising messages and solicitations will require written/signed consent.
  • The odds of a firm being sued in federal court are over six times lower, when the firm provides free credit monitoring following a breach of privacy, according to new research. See Empirical Analysis of Data Breach Litigation.
  • In California, a court has denied a Motion to Dismiss brought by Google in response to a class action alleging unsolicited text messages. Pimental v. Google, Inc.

Federal Communications Commission
The FCC adopted changes in the Telephone Consumer Protection Act regulations which will require express written signed consent for text messages, prerecorded calls, and predictive dialed calls to cell phones.  The rule goes into effect one year from publication in the Federal Register.  Non-telemarketing messages will still be allowed with express consent (oral or written) but advertising messages and solicitations will require written/signed consent.

Privacy Lawsuits
Three professors have analyzed more than 200 privacy lawsuits filed both by class action attorneys and the Federal Trade Commission or states’ Attorneys General to determine what types of corporate behavior generally trigger such litigation (besides the obvious breach) and what sort of actions are more likely to ameliorate any damages.

The odds of a firm being sued in federal court are over six times lower, for example, the researchers say, when the firm provides free credit monitoring following the breach. Empirical Analysis of Data Breach Litigation, [URL: papers.ssrn.com/sol3/papers.cfm?abstract_id=1986461].  The authors conclude that the cases generally either settle or are dismissed as a matter of law or because the plaintiffs were unable to demonstrate an actual harm.  Attorneys’ fees in such settlements had a mean value of approximately $1.2 million in the 28 settlements reviewed by the authors.

The Obama Administration has published a Consumer Privacy Bill of Rights which reportedly seeks to protect all Americans from having their information misused and to safeguard their privacy.  The rights include individual control, transparency, security, accuracy, and accountability.

Securities and Exchange Commission
The SEC is adopting rule changes designed to prevent fraudulent and manipulative acts and practices with regard to securities, sales, and telemarketing.  77 Federal Register 5611 (2012).

Arizona
A bill has been proposed in the Arizona House (HB 2610) which would eliminate the exemption found in Arizona’s telemarketing registration law for registered fundraisers and apply it solely to charitable organizations.

California
A California court has ruled that Jiffy Lube could be held liable for text message sent on its behalf even if it didn’t send the messages, itself.  In re: Jiffy Lube International, Inc.

A court has denied a Motion to Dismiss brought by Google in response to a class action alleging unsolicited text messages.  Pimental v. Google, Inc.  The case involved a group texting service known as “Disco” where an individual could create a group and thereby send text messages to many people at once.  Plaintiffs alleged that Google used all phone numbers gathered and independently sent its own text messages promoting the Disco service to those recipients.  The court did not dismiss the class action.

Florida
A representative of the Florida Department of Agriculture and Consumer Services has confirmed that publicly-traded companies do not need to file an affidavit of exemption from registration under the Florida Telemarketing Act.

Kansas
A Kansas appellate court has ruled that the applicable statute of limitations for the TCPA is four years. Anderson Office Supply, Inc. v. Advanced Medical Associates.  The class involved allegations of unsolicited facsimiles.

Louisiana
A bill has been proposed in the Louisiana House (HB 151) which would apply Louisiana State “do-not-call” lists to political prerecorded telephone calls.

A bill has been proposed in the Louisiana Senate (SB 210) which would ban unrequested commercial text messages to consumers. Federal law already allows the text messages only with express consent (soon to be express written signed consent), so this bill appears to duplicate existing federal law.

Maryland
The Maryland Board of Elections website states that “Maryland has no statute that specifically addresses the use of automated or ‘RoboCalls’ in political campaigns.”  This statement is incorrect, or at least misleading, because Maryland Public Utilities Code § 8-204 regulates automated dialing systems with a prerecorded message used to solicit sales of goods or services, offer gifts or prizes, or “conduct a poll.”  Id. at (b).

Comment:  I doubt that a caller could rely on the statement of the Board of Elections to avoid liability under the Utilities Code.

Mississippi
A bill has been proposed in the Mississippi House (HB 1434) which would apply the state “do-not-call” list to text messages as well as fax solicitations.  Persons with cell phones would also be able to put their telephone numbers on the state list. This bill largely duplicates federal law already in place.

Missouri
A federal court in St. Louis has denied a defendant’s argument that the TCPA was not intended to allow class actions. St. Louis Heart Center v. Vein Centers for Excellence, Inc.  The court ruled that nothing in the TCPA demonstrates that Congress intended to deprive private individuals from bringing class actions.

Ohio
A bill has been proposed in the Ohio Senate (SB 223) which would create an account administered by the Attorney General’s office known as the Telemarketing Fraud Enforcement Fund.  Registration fees paid for telemarketing registrations would be used to pay for reasonable expenses related to enforcement of telemarketing consumer protection law. 

West Virginia
Noted Plaintiff Diana Mey is the lead plaintiff in a class action against Versatile Marketing Solutions, a marketer of home alarm systems.  The defendant made the plaintiff an offer of judgment in an attempt to make the class moot.  The court ruled in her favor, holding that the class action could proceed.  Mey v. Monitronics International, Inc.