In Duran v. LaBoom Disco, Inc., No. 19-600-cv (2d Cir. Apr. 7, 2020), the Second Circuit joined the Ninth Circuit in expansively defining Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). The Second Circuit held, like the Ninth Circuit before, that ATDS includes automated texts/calls to consumers from stored lists, while the Third, Seventh, and Eleventh Circuits have held the opposite, requiring that an ATDS make texts/calls not only automatically, but from a list of randomly generated numbers. The Second Circuit decision highlights the growing Circuit split on the issue and potentially foreshadows a date with the Supreme Court. For now, the decision will likely encourage TCPA class action plaintiffs to fill their dance cards in New York and other states in the circuit.
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Federal Class Action
FCC Declares Certain Calls/Texts Regarding COVID-19 Are Exempt From The TCPA
The Telephone Consumer Protection Act (“TCPA”) generally prohibits automated calls, including text messages, to cell phones without sufficient prior express consent, and imposes a statutory penalty of $500 to $1,500 per call/text in violation. Calls that serve an “emergency purpose” are completely exempt from the TCPA. The FCC’s rules define “emergency purpose” to mean “calls made necessary in any situation affecting the health and safety of consumers.” See 47 C.F.R. § 64.1200(f)(4).
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Seventh Circuit Adopts Narrow Definition of Autodialer Under The TCPA
The Seventh Circuit has recently joined the Second, Third, Sixth and Eleventh Circuits in adopting a narrow interpretation of Automatic Telephone Dialing System (ATDS) under the Telephone Consumer Protection Act (“TCPA”), one that excludes equipment that dials numbers from a customer database. See Gadelhak v. AT&T Services, Inc., No. 19-1738, — F.3d —-, 2020 WL 808270 (7th Cir. Feb. 19, 2020); see also Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301 (11th Cir. Jan. 27, 2020); Gary v. Trueblue, Inc., 786 F. App’x 555 (6th Cir. Sept. 5, 2019); King v. Time Warner Cable, 894 F.3d 473 (2d Cir. 2018); Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018).
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The Death of One California Privacy Class Action, and the Birth of Another
As one year ends, another begins. So too it seems with California’s embrace of multi-million dollar privacy class actions. The purported illegal recording of cellular or cordless phone calls under Section 632.7 of the California Penal Code has long been a favorite of the class action bar due to the availability of staggering statutory damages. These actions are all but dead, however, following the Fourth Appellate District’s decision in Smith v. LoanMe, Inc., 2019 DJDAR 11930, holding that some form of eavesdropping is required to state a cause of action under Section 632.7. No longer is the simple recording of a cellular or cordless telephone call between the actual participants to the call actionable. While many have long argued that the actual language of the statute as well as its legislative history – including the legislative history of the California Invasion of Privacy Act (Pen. Code §§ 630, et seq.) in general – require some form of spying to state a claim under Section 632.7, the court of appeal in LoanMe has made it official. Barring review or inconsistent rulings by other appellate districts, privacy class actions seeking statutory damages under Penal Code section 632.7 are the past.
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CBD Industry Beware: The False Labeling Class Action Has Arrived
Last week, in what may be the first of its kind, a putative class of Massachusetts consumers filed a false labeling class action complaint against Global Widget LLC, d/b/a Hemp Bombs (“Hemp Bombs”) (Ahumada v. Global Widget LLC, D. Mass. Case No. 1:19-cv-12005), challenging the labeling of numerous Hemp Bombs products, including gummies, lollipops, capsules, syrup, vape and pet products.
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The Sixth Circuit Limits the Meaning of ATDS Under the TCPA
Recently, the Sixth Circuit in Gary v. Trueblue, Inc., No. 18-2281, 2019 U.S. App. LEXIS 26959 (6th Cir. Sep. 5, 2019), weighed in on the meaning of Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). The TCPA generally prohibits calls and text messages to cell phones using an ATDS without prior express consent and imposes a statutory penalty of $500 per call or text in violation, or up to $1,500 per call/text for a knowing or willful violation. On a class action basis covering all calls/texts sent over four years, the potential liability can be crushing.
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Supreme Court Punts On Whether FCC’s Interpretation of the TCPA Binds Federal Courts
At the end of the Supreme Court’s most recent term, the Court released its long-awaited ruling in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (June 20, 2019)—a case that could have carried far-reaching ramifications for Telephone Consumer Protection Act (“TCPA”) litigation nationwide. The Supreme Court granted review to consider whether the Administrative Orders Review Act (also known as the Hobbs Act), 28 U.S.C. § 2342(1), requires district courts to accept the FCC’s legal interpretation of the statutory term “unsolicited advertisement” under the TCPA.
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One “Chirp, Buzz, Or Blink” Is Not Enough To Sue Under The TCPA
A recent decision by the Eleventh Circuit will make it more difficult for plaintiffs to establish standing to sue under the Telephone Consumer Protection Act (TCPA). In Salcedo v. Hanna, et al., Case No. 17-14077, 2019 U.S. App. LEXIS 25967 (11th Cir. Aug. 28, 2019), the Eleventh Circuit ruled that a single text message did not cause sufficient harm to sue in federal court. As a result, “single text message” TCPA cases may be a thing of the past, at least in the federal courts across the three States in the Eleventh Circuit (Florida, Georgia, and Alabama). However, given conflict with a ruling by the Ninth Circuit, the issue may now be ripe for decision by the U.S. Supreme Court.
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Spate of Recent False Advertising Class Actions Take On Animal Treatment Label Claims
In the last few months, a handful of class actions have been filed challenging label claims regarding the treatment of the animals providing the food item in question. This appears to be a new food litigation trend, as plaintiffs’ attorneys invoke the purchasing public’s apparent concern for “clean”, “pure”, “healthy”, and “organic” food items.
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Lack of Standing Dooms Organizational Plaintiffs’ False Advertising Claims; Such a Challenge Can Be Brought at Any Time
Challenges based on lack of standing can be brought at any time and, in Friends of the Earth v. Sanderson Farms, Inc., 2019 U.S. Dist. LEXIS 127964 (N.D. Cal. July 31, 2019), the court dismissed a putative class action for lack of standing pursuant to Rule 12(h)(3) after Plaintiffs supplemented discovery responses and depositions were taken. Although it had earlier denied motions to dismiss brought pursuant to Rule 12(b)(6), the district court concluded that Plaintiffs failed to produce evidence in discovery to establish their injury in fact and, accordingly, lacked standing under Article III.
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