CHICAGO — The number of lawsuits targeting businesses under the Telephone Consumer Protection Act (TCPA) is surging, as many businesses struggle to "decipher and implement" the law's provisions amid a proliferation of modern technology, like smartphones and text messaging, says an attorney specializing in assisting clients on federal communications policy and enforcement.
The number of lawsuits alleging harassing marketing calls, including automatic calls and text messages are up 50 percent, according to a report authored by Mark W. Brennan, a partner at Hogan Lovells US LLP in Washington, D.C., and fellow attorney, Wesley Platt. In the report, the two noted that, out of approximately 3,000 recent lawsuits, over 1,000 are class-action suits requesting millions of dollars in damages.
Mark W. Brennan | Hogan Lovells
The study also found that 44 law firms were responsible for about 60 percent of the cases, with a single law firm filing 263 TCPA lawsuits alone, the majority of which were class-action suits.
The TCPA was passed in 1991 by Congress in an attempt to restrict the number of telemarketing solicitations and the use of automated dialing calls. The act restricts the time of day and night when such calls can be made, prohibits calling consumers who ask not to be called and requires marketers to identify themselves and provide contact information, among other restrictions.
In 2015, the U.S. Federal Communications Commission (FCC) issued a “declaratory ruling and order,” which sought to clarify the 1991 TCPA rules.
In the early years, TCPA litigation was rare. Smartphones were not yet available, but the eventual development and popularity of the smartphone opened up new ways for businesses to communicate with customers.
The FCC's interpretation has been called "broad" in its definition of what exactly constitutes “automatic dialing.” The question is whether uses of the new technology, including smartphones and texting, violate the 25-year-old law.
Thus, some businesses seeking to communicate with customers find themselves liable for calling, texting or faxing using the modern devices. In some cases, plaintiffs have sued banks for allegedly calling them on their cell phones to collect credit card debt.
Businesses in more than 40 industries have been targeted by TCPA challenges, with financial and collections agencies suffering the most, while health, retail and education sectors also have been impacted.
Most of the TCPA lawsuits have occurred in federal courts in California, Illinois and Florida, the report stated.
Brennan recommended curbing litigation abuses by creating a one-year statute of limitations, limiting possible damages, providing relief from wrongly provided numbers and going after repeat offenders rather than legitimate businesses.
“TCPA litigation is likely to get worse until Congress implements these suggestions and the FCC re-evaluates the 2015 order and addresses its weaknesses,” Brennan said.
He said a common-sense approach is what is needed now.
“The TCPA framework should provide a reasonable, practical compliance approach for good-faith callers,” Brennan said.