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Redial: 2016 TCPA Year in Review Telephone Consumer Protection Act: Analysis of Critical Issues and Trends Introduction Eversheds Sutherland is pleased to present REDIAL, our annual in-depth analysis of key Telephone Consumer Protection Act (TCPA) issues and trends. REDIAL reports on issues affecting the industries that face TCPA class action liability. Did you know? 2ND 100,000 3X For the fourth consecutive year, The FCC has reported that as many The TCPA imposes liability of TCPA cases are the second most as 100,000 cell phone numbers $500 per call, text or fax, trebled filed type of case in federal are reassigned every day. to $1,500 if the sender’s conduct courts nationwide. is deemed willful. Eversheds Sutherland Industry Knowledge and Focus Few industries are immune from TCPA liability. In 2016, the insurance, financial services, energy and health sectors were uniquely affected by TCPA litigation. REDIAL analyzes key legal issues affecting these industries. Eversheds Sutherland tracks daily all TCPA cases filed across the country. This allows us to spot trends and keep our clients informed. We understand the law and our clients’ businesses, allowing us to design compliance and risk management programs uniquely suited to our clients' specific needs and to spot issues before they result in litigation. When litigation is filed, Eversheds Sutherland’s TCPA team has the depth of experience necessary to zealously defend its clients’ interests in court. Why Eversheds Sutherland? STRENGTH in representing STRENGTH in knowing STRENGTH in advising STRENGTH as trial lawyers the country’s and the world’s our clients’ businesses and counseling our clients in efficiently and zealously leading companies on TCPA compliance representing our clients in class actions filed in state and federal courts across the country Redial: 2016 TCPA Year in Review The TCPA Traffic Light LANDLINE CELL PHONE MARKETING NON-MARKETING MARKETING NON-MARKETING DO NOT PRIOR CALL LIST+ PRIOR AUTODIALED EXPRESS EXPRESS WRITTEN CALLS/TEXTS CONSENT2 CONSENT1 PRIOR PRIOR PRIOR PRERECORDED EXPRESS EXPRESS EXPRESS WRITTEN WRITTEN VOICE CONSENT CONSENT CONSENT DO NOT DO NOT CALL LIST CALL LIST MANUALLY DIALED PRIOR EXPRESS PERMISSION OR FAX ESTABLISHED BUSINESS RELATIONSHIP 1 “Prior express written consent” requires a written agreement, signed by the consumer, that includes, among other things, the telephone number that specifically authorizes telemarketing by automatic dialing/texting or prerecorded voice, and that is not required as a condition of purchase. 47 C.F.R. § 64.1200(f)(8). 2 For non-marketing purposes, providing a cell number in connection with a transaction generally constitutes prior express consent to be contacted at that number with information related to the transaction. 7 F.C.C.R. 8752 ¶ 31 (1992). + Do Not Call List restrictions apply broadly to telemarketing to both cell phones and landlines, but can be overridden by written consent from the consumer. * Opt-out notice and mechanism must be provided. Specific requirements vary. This chart does not constitute legal advice. The chart provides only a general overview of TCPA rules and does not reflect all details needed for compliance. © 2017 Eversheds Sutherland (US) LLP. All Rights Reserved. This chart is for informational purposes and does not constitute legal advice. Telephone Consumer Protection Act: Analysis of Critical Issues and Trends Contents Supreme Court Spotlight Campbell-Ewald Co. v. Gomez: Money for Nothing: Offer of Complete Relief to Named Plaintiff Does Not Moot Class Action, Supreme Court Holds in 6-3 Decision. 1 Spokeo, Inc. v. Robins: Supreme Court Explores Injury Requirement for Federal Statutory Standing . 3 Litigation Developments Dial “C” for Confusion: Courts Split on TCPA Definition of Autodialer . 5 Lewis Wiener, Wilson Barmeyer and Frank Nolan Win Dismissal of TCPA Fax Case: Applying Spokeo, Court Finds Plaintiff Incurred No Actual Harm . .8 Heads I Win, Tails You Lose: TCPA Defendants Finding Success in Striking “Fail-Safe” Class Allegations . 9 Reverse the Charges: Challengers Push Forward in Appeal of 2015 TCPA Order . 11 Dial or Push-Button: Oral Argument in Appeal of FCC Order . 13 Who’s Calling? Standards for Third-Party Liability Diverge Under TCPA . 15 Cruise Ships Miss the Boat on TCPA Compliance to the Tune of Up to $76 Million . 18 Industry Focus TCPA Litigation and the Insurance Industry . 19 TCPA Issues for Healthcare Providers: Are You Covered? . .. 22 Power Outage: Energy Utilities Come Away With Little Under FCC’s TCPA Robocall and Text Ruling . 25 Off the Grid: TCPA Class Action Settlements for Energy Utility Companies . 27 Regulatory Update TCPA Hazards Abound Following Busy Month for the FCC . 29 Voice over Internet Protocol and the TCPA: The Hidden Pothole on the Information Super Highway . 31 The Future of the TCPA TCPA RIP? . 33 Redial: 2016 TCPA Year in Review Supreme Court Spotlight Money for Nothing Campbell-Ewald Co. v. Gomez: Money for Nothing: Offer of Complete Relief to Named Plaintiff Does Not Moot Class Action, Supreme Court Holds in 6-3 Decision An unaccepted Rule 68 offer of judgment that would fully satisfy a named plaintiff’s individual claim does not moot individual or class claims opined the U.S. Supreme Court, resolving a split in the circuits. Campbell-Ewald Co. v. Gomez, No. 14-857 (January 20, 2016). The Court also held that the petitioner’s status as a government contractor does not entitle it to the protection of derivative sovereign immunity. The Campbell-Ewald case was brought under the Telephone Consumer Protection Act (TCPA), but the ruling applies to all class actions where the defendant has made (or could make) a Rule 68 offer of judgment. Left unresolved by the Court is the question of whether actual payment in some form, rather than merely offering to pay a settlement or judgment, would lead to the same result. In the underlying case, the plaintiff Rule 68 offer does not moot a plaintiff’s received a single, unsolicited recruitment individual claims or putative class claims.1 Businesses that find text from the defendant, a marketing Although the mootness ruling was themselves defending consultant hired by the United States consistent with Ninth Circuit precedent, against class actions will Navy. The plaintiff responded by filing a several other federal circuit courts of no longer have the option putative class action against the marketing appeals had held otherwise. consultant, alleging a violation of the of resolving the case TCPA. Before the plaintiff moved for On review of the mootness issue, the by offering judgment to Supreme Court held that an unaccepted class certification, the defendant the named plaintiff. The offer of judgment does not moot a marketing consultant made a Rule 68 Supreme Court held in offer of judgment to the plaintiff for plaintiff’s individual claim or the claims $1,503—$3 more than the maximum of a putative class, embracing the Campbell-Ewald Co. v. amount of treble statutory damages the reasoning of Justice Elena Kagan’s Gomez that an offer of plaintiff could recover for a single violation dissent in Genesis HealthCare Corp. judgment under Rule 68 v. Symczyk, 133 S. Ct. 1523 (2013).2 of the TCPA. The plaintiff declined the does not moot a TCPA offer. Thereafter, the defendant moved In that dissent, Justice Kagan, and now class action claim. to dismiss the plaintiff’s claim, arguing the majority of the Court in Campbell- that the claim was moot because it had Ewald, characterized the unaccepted already offered the plaintiff full and offer as a “legal nullity, with no operative never made the offer. In deciding only complete relief under the TCPA. The effect.” The rejection of a Rule 68 offer the specific issue before the Court, district court denied the motion. of judgment leaves the case as a live Justice Ruth Bader Ginsburg, writing On appeal, the U.S. Court of Appeals for controversy in the same position as it for the majority, declined to opine on the Ninth Circuit held that an unaccepted would have been had the defendant the hypothetical situation in which Telephone Consumer Protection Act: Analysis of Critical Issues and Trends 1 Supreme Court Spotlight Money for Nothing “a defendant deposits the full amount According to the Court, the Navy relied of the plaintiff’s individual claim in an on the contractor’s representation that account payable to the plaintiff, and the list of recipients for text message the court then enters judgment for solicitations included only individuals the plaintiff in that amount.” Justice who had opted in to receive them. Clarence Thomas concurred with the The Court embraced the Ninth Circuit’s judgment on that basis, agreeing that a vicarious liability determination on claims mere offer does not end the case; he against the contractor, and rejected the suggested, however, that his analysis sovereign immunity defense. may have been different had there been actual tender of the funds. Eversheds Sutherland practice point The decision limits the class action defense strategy of picking off the named plaintiff by offering complete relief on an individual basis. This ruling will have a particular impact in cases where the named plaintiff’s damages are limited and well-defined, such as in TCPA cases, because defendants will no longer be able to moot class claims simply by making an offer of individual relief. Chief Justice John Roberts, writing in dissent, advocated for a rule that a complete offer made pursuant to Rule 68 moots the action. According to Justice Roberts, “[w]hen a plaintiff files suit seeking redress for an alleged injury, and the defendant agrees to fully redress that injury, there is no longer a case or controversy for purposes of Article III.” In such circumstances, “the plaintiff cannot demonstrate an injury in need of redress by the court.” Finally, on the question of derivative sovereign immunity for federal contractors under the TCPA, the Supreme Court concluded that a contractor cannot claim this shield when the contractor’s actions are alleged to have violated both federal law and the government’s explicit instructions.

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