Check Your Phone: States Continue to Enact Mini-TCPAs – JD Supra

Companies that use the latest technology to contact customers and prospects by telephone or text messages breathed a huge sigh of relief after the United States Supreme Court issued its decision in Facebook, Inc. v. Duguid[1] adopting the correct and narrow definition of an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). While we had all hoped that Facebook would put an end to most of the TCPA class actions, the relief at the federal level is quickly turning into a minefield as state legislatures have begun to enact and revise “mini-TCPAs” at the state level. These mini-TCPAs go beyond the regulations in federal law to include more restrictive provisions and additional state penalties that can be stacked on top of federal penalties.
How the Supreme Court Case Narrowed the TCPA
In Facebook, the plaintiff alleged that Facebook violated the TCPA by using a notification system that stored phone numbers linked to Facebook accounts and sent automated text messages to those phone numbers to alert individuals of login activity from new devices or browsers.[2] The district court and the Ninth Circuit Court of Appeals followed existing precedent that had greatly expanded the definition of an ATDS to capture technology that did not exist in 1991 when the TCPA was passed. Facebook appealed.
The Supreme Court determined that “[b]ecause Facebook’s notification system neither stores nor produces numbers ‘using a random or sequential number generator,’ it is not an autodialer”[3] as defined by the TCPA.[4] Accordingly, the restrictions in the TCPA do not apply to Facebook’s notification system. This decision altered the landscape of telephone solicitation law because it narrowed the category of equipment falling under the TCPA’s definition of “automatic telephone dialing system” (or “autodialer”). The Facebook holding served as notice that the TCPA’s application was less broad than some consumers, attorneys, and lower court judges might have thought. But state legislatures were listening too. And since Facebook, states have stepped in to add new telephone solicitation protections.
Florida Leads the Charge in States’ Response to Facebook, Inc. v. Duguid
Only three months after the Facebook decision, Florida became the first state to amend its state telephone solicitation law.[5] Unlike the federal TCPA, the amended Florida Telephone Solicitation Act (“FTSA”) does not restrict application to autodialers to systems with the capacity to randomly or sequentially generate phone numbers. Instead, Florida’s FTSA expansively defines an “automated” dialer to include any “automated system for the selection or dialing of telephone numbers or the playing of a recorded message.”[6] Additionally, the FTSA added new restrictions including prior express written consent for all telephonic sales calls using an automated system and removed certain exemptions such as (1) calls in response to calls initiated by persons to whom the automatic calls or live messages were directed and (2) calls concerning previously ordered good or services.
But the change most dangerous to businesses is the FTSA’s inclusion of a private cause of action that allows called parties to recover at least $500 per violation.[7] The penalty per violation can go up to $1,500 if the court finds that the defendant willfully or knowingly violated the FTSA.[8] In response to these provisions opening up new paths to liability and high damages calculations, Florida plaintiffs’ lawyers have jumped in to file more than 100 new FTSA putative class action lawsuits since July 2021.[9]
New State Law Landscape of Mini-TCPAs
Although Florida’s mini-TCPA was met with strong pushback from business groups, efforts to amend the law failed during Florida’s regular legislative session. This means the rules in Florida’s FTSA will remain as amended on July 1, 2021. Because the law is here to stay, businesses should review their policies and vendor contracts related to automatic calling and mass text messages to ensure compliance with the FTSA.
Florida is not the only state changing the rules of the game. Activity in state legislatures across the country means that business need to look to multiple state laws before picking up the phone. State laws regulating telephone solicitation are changing this year, with more changes likely to come next year.
With telephone solicitation rules changing in many states, now is the time for businesses to take a second look at existing state laws regulating telephone solicitation. Several states include unique requirements that can lead to severe penalties.
In light of the rapidly changing legal landscape governing telemarketing and the use of the latest technology to contact customers and prospects, companies should not just rely on what they have done in the past to continue calling consumers. Each new calling campaign provides an excellent opportunity to update policies and procedures to make sure you are up to date on your compliance efforts.
***
[1] Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021).
[2] Id. at 1168.
[3] Id. at 1169.
[4] 47 U.S.C. § 227(a)(1).
[5] Florida Senate Bill 1120, effective July 1, 2021.
[6] Fla. Stat. § 501.059(8).
[7] Id. § 501.059(10)(a).
[8] Id. § 501.059(10)(b).
[9] Florida Senate Bill 1564, Bill Analysis and Fiscal Impact Statement.
[10] Okla. Stat. 15 § 775C.6 (to be codified).
[11] Ga. Code § 46-5-27(i) (proposed).
[12] RCW 80.36.390 (to be amended).
[13] The bill currently defines “automatic dialing and announcing device” as “any device or system of devices that is used, whether alone or in conjunction with other equipment, for the purpose of automatically selecting or dialing telephone numbers and transmitting a voice communication” without reference to the capacity to randomly or sequentially generate phone numbers.
[14] Tex. Bus. & Com. Code § 302.101(a).
[15] Id. § 302.251.
[16] Id. § 302.302.
[17] Va. Code § 59.1-512.
[18] Va. Code § 59.1-517.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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