The More Things Change, the More TCPA Litigation Stays the Same

Despite last year’s Supreme Court decision that under the Telephone Consumer Protection Act (TCPA), automatic telephone dialing systems (ATDS) must have the capacity to use random or sequential number generators, class action lawsuits continue to be filed that allege that texts were sent using an ATDS without the required consent.

As we noted in our April 2, 2021 client memo, the Facebook vs. Duguid decision did not entirely resolve the longstanding dispute over the definition of ATDS. We said then that with the continuing uncertainty about the definition of the term “capacity,” the TCPA continues to be a litigation risk. This remains true today.

Some lower courts have not followed the Facebook decision at the pleading stages of TCPA lawsuits. For example, in Shank v. Givesurance Insurance Services, Inc., a federal court in Ohio ruled that the Plaintiff sufficiently pleaded that an ATDS was used to send an unsolicited text message, based primarily on the fact that an SMS code was used to send the text message. The court did not address whether the text message was sent via equipment with the capacity to use a random or sequential number generator, as required by the Supreme Court.

There is some good news for TCPA defendants, however. A federal court in Washington state recently ruled in Johansen v. EFinancial LLC that the Defendant’s substantial compliance with the TCPA’s Do Not Call (DNC) safe harbor protected the Defendant from certain TCPA liability. The court held that the Defendant avoided legal liability if the offending text was placed in error. The Defendant had substantially complied with specific requirements, including: 1) having written procedures to comply with the national DNC rules; 2); training personnel on these procedures; 3) maintaining a business-specific DNC list; 4) using a process to prevent telephone solicitations to any number on the business-specific DNC list; and 5) using a process to ensure that the business does not sell, rent, lease, purchase, or use the national DNC registry, or any part of it, for any purpose except compliance with federal and state laws to prevent telephone solicitations to telephone numbers on the national registry.

Reportedly, lawsuits alleging DNC violations have increased in the past year to supplement ATDS claims. Johansen illustrates the value in implementing procedures and practices as part of businesses’ routine operations, in order to qualify for the protection of the DNC safe harbor.

If you have questions about TCPA litigation or need assistance with implementation of a TCPA safe harbor or other compliance, please contact an attorney in our Privacy, Data Protection, and Cybersecurity practice group.