A TCPA for the 21st Century: Why TCPA Lawsuits are on the Rise and What the FCC Should do About it

    July 2014

    The Telephone Consumer Protection Act (TCPA) was signed into law in 1991, more than twenty years ago, with the specific purpose of stopping harassing and unwanted phone calls to consumers. Over the past few years there has been an astonishing increase in the number of TCPA lawsuits alleging violations of the TCPA, with one study estimating that TCPA lawsuits rose by 63 percent in 2012 alone (WebRecon, 2012). So what is the cause of this explosive increase in litigation? The answer seems to be a confluence of factors: modern technology allowing companies to reach multitudes of consumers in a short amount of time, no limits on damages combined with litigation that is often unchecked by any common sense application of the statutory language to modern technology, and the lack of an updated regulatory interpretation of the decades-­‐old statutory language that takes into account how consumers and businesses communicate today.

    Obviously, technology has changed over the past twenty years, allowing companies to communicate with consumers much more efficiently in many ways, including by text or by dialing numbers using a software system rather than manually. However, each individual communication that a company sends to an individual consumer that is alleged to be without “prior consent” can expose the communicating company to potential liability under the TCPA. The TCPA provides a private right of action for violations and statutory damages in the amount of $500 for each separate violation and up to $1,500 for each "willful" violation (47 U.S.C. § 227 (b)(3), (f)(1)). This is for every single individual text or individual call. And, the recipient of a message does not have to show any actual injury. As a result, liability exposure in individual actions can be high and in a single class action lawsuit liability can quickly reach tens of millions of dollars or higher. The TCPA has become fertile ground for nuisance lawsuits because class action lawyers are Mobile Marketing Association IJMM Summer 2013 Vol. 8, No. 1 76 often rewarded with quick settlements, even in cases without any merit, simply because litigation uncertainty and the potential financial exposure resulting from a bad decision are too great a risk for a company to bear.

    However, the major driving force behind the recent rise of TCPA lawsuits is the legal ambiguity surrounding how the language of the TCPA itself can be squared with today’s telephone software and equipment. In 2003, the FCC noted that in enacting the TCPA Congress had not contemplated changing technologies that necessitated revisiting the TCPA after eleven years (Federal Communications Commission, 2003 TCPA Order). Given the rapid pace of technological change, it is little wonder that in 2013 many provisions of the TCPA and the FCC’s implementing regulations are even more outdated. The effect of outdated TCPA statutory language and implementing regulations is apparent. In recent years, the filing of TCPA lawsuits has become a growth industry, as aggressive plaintiff’s counsel take advantage of ambiguity caused by the regulatory lag in addressing change. The FCC must act quickly to stem this tide in frivolous litigation.

    The first section of this article provides a brief overview of the TCPA. Section two highlights several recent lawsuits, many of them class actions, that exploit the language of the TCPA and the regulatory lag in updating its implementing regulations. Section three discusses a major focus of frivolous TCPA lawsuits, the meaning of the term “automatic telephone dialing system” (ATDS or autodialer), and posits that modern dialing technologies do not qualify as an autodialer under the TCPA if they do not have the current ability to store or produce telephone numbers by using a random or sequential number generator. Finally, section four urges the FCC to employ its regulatory authority to sensibly clarify the TCPA in the context of today’s technology.

    *This article was first published by the Mobile Marketing Association in IJMM Summer 2013 Vol. 8, No. 1.