U.S. House Judiciary Subcommittee on the Constitution and Civil Justice Holds Hearing to Examine Abusive TCPA Lawsuits
6/16/2017 3:46 PM
Testimony in the recent hearing highlighted how abusive TCPA litigation has been devastating for business.
Advanced communications technology regulated by decades-old laws has flooded the courts with frivolous lawsuits. At the heart of the issue is the Telephone Consumer Protection Act, a 1991 law described as “horribly outdated” by Becca Wahlquist, a partner at Snell & Wilmer L.L.P who recently testified before the House Judiciary Constitution and Civil Justice Subcommittee.
When TCPA was enacted in 1991, mobile telephones were a luxury item, mobile calls were expensive, and only 3 percent of Americans subscribed to wireless telephone services. Today, 50.8 percent of households are wireless-only. According to the National Center for Health Statistics’ National Health Interview Survey, only 6.5 percent of households are landline-only households.
Wahlquist told the Subcommittee, chaired by U.S. Rep. Chairman Bob Goodlatte, R-Va., that “…businesses reaching out in good faith to customer-provided telephone numbers with non-marketing communications are now the most common target of TCPA litigation. The TCPA has created perverse incentives for persons to invite calls from domestic businesses and then sue for those calls, and for lawyers to avidly search for deep-pocketed defendants calling their potential clients; many individuals and attorneys now make their livings via the TCPA.”
ACA International and more than 40 other trade associations and business groups commended the Subcommittee on the Constitution and Civil Justice for holding the hearing in a letter to House Judiciary Committee Chairman U.S. Rep. Steve King, R-Iowa, and Ranking Member U.S. Rep. Steve Cohen, D-Tenn.
“Businesses need clarification and reasonable standards on how to reach their consumers, not the threat of a million or billion dollar class action lawsuit each time they pick up the phone or send a text message. We greatly appreciate your leadership in looking at the TCPA and the abusive litigation this outdated statute is causing and look forward to working with the Committee to pursue much needed reform,” the letter states.
ACA International has long supported efforts to modernize TCPA, publishing the May 2017 white paper, “Unintended Consequences of an Outdated Statute: How the TCPA Fails to Keep Pace with Shifting Consumer Trends,” which provides sound data and information demonstrating that current TCPA interpretations are causing problems for consumers and companies. The white paper cites 2016 data as showing a dramatic increase in TCPA litigation, noting a 1,273 percent increase in litigants between the years of 2010 and 2016. And, between 2015 and 2016 the total number of litigants increased 32 percent.
Wahlquist, who has represented companies sued under the TCPA for use of a variety of communications including phone, text and facsimile, cited the ACA white paper in her testimony noting that the majority of American homes (50.8 percent) are wireless-only.
“The largest driver of TCPA litigation these days is claims of ‘autodialed’ calls or texts to cellular phones placed without prior consent, because so many Americans now use their cell phones as their primary point of contact,” she said.
According to Goodlatte, TCPA litigation is arising from, “a lack of clarity in the law’s application, which is being exploited by attorneys seeking big payouts.”
“Unfortunately, the TCPA neither anticipates the effects of new technology nor these emerging legal trends. I hope that today’s hearing sheds some light on the lawsuit abuse of the TCPA and what Congress can do to modernize and improve it,” Goodlatte said. “We must protect consumers from being forced to foot the bill for unsolicited advertisements and we must also ensure that the law is not abused by a cottage industry of overly aggressive trial lawyers seeking to line their own pockets.”
Hoffman told the Subcommittee: “Today, the FCC points out that over 100,000 numbers are reassigned every day. These developments have produced conflicting judicial interpretations of the TCPA. What was once clear became quite complex, and businesses struggled to understand and comply with contemporary applications of a law passed for another time and space.”
ACA International and the credit and collection industry are awaiting a decision from the D.C. Circuit Court of Appeals in the ACA Int’l, et al. v. Federal Communications Commission case that could have a significant impact on the rules governing calls and texts to consumers.
ACA filed the first petition for review within hours after the FCC issued the TCPA Order in July 2015. ACA argued in its petition that the FCC’s exercise of regulatory authority expanded the scope and reach of the TCPA in a way that Congress never intended—leaving a law in place that hurts legitimate, law-abiding business. ACA’s appeal, as well as the subsequent appeals filed by nine other businesses and organizations, was later centralized in the D.C. Circuit by the Judicial Panel on Multidistrict Litigation.
“… It is long past time for this statute to be revisited, and for it to come into line with the other federal statutes that provide for statutory damages when there is no requirement to show actual harm. While protections should remain for consumers, businesses too need protection from astronomical liability for well-intentioned communications to customer provided numbers,” Wahlquist said in her testimony. “In short, TCPA litigation abuse is rampant. Its negative impact on American businesses and its stranglehold on federal court dockets is not what was intended when this statute was passed 26 years ago in a different technological era.”
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