The FCC Shouldn’t Enable More TCPA Lawsuits

REUTERS/Yuri Gripas

Ajit Pai Commissioner, FCC
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The Los Angeles Lakers offered its fans a fun opportunity: text-message the team, and you might get to place a personalized message on the Jumbotron at the Staples Center. The Lakers acknowledged receipt of each text with a reply making clear that not every message would appear on the Jumbotron. An appropriate response? Not according to one attorney, who filed a class-action lawsuit claiming that every automated text response was a violation of the Telephone Consumer Protection Act of 1991, or TCPA.

This is not an uncommon story; the TCPA has become a fertile ground for lawsuit abuse. While only 14 TCPA cases were filed in 2008, lawyers filed 1,908 such suits during just the first nine months of 2014. And unfortunately, the Federal Communications Commission is set to give the trial bar another boost later this week.

Congress enacted the TCPA in order to crack down on intrusive telemarketers and over-the-phone scam artists. The TCPA prohibits these businesses from initiating phone calls for commercial purposes without the prior consent of the called party. Each violation comes with a $500 penalty. But trial lawyers have twisted the law’s words to target useful communications between legitimate businesses and their customers. And thanks to the $500 penalty, the TCPA has become their ATM.

Examples abound. Consider TaxiMagic, a precursor to Uber. TaxiMagic faced a class-action lawsuit because it sent a confirmatory text message to a customer who called for a cab — one that indicated the cab’s number and when it was dispatched to the customer’s location.

Or take the case of Rubio’s, a West Coast restaurateur. Rubio’s sends its quality-assurance team text messages about food safety issues, such as possible foodborne illnesses, to better ensure the health and safety of Rubio’s customers. When one Rubio’s employee lost his phone, his wireless carrier reassigned his number to someone else. Unaware of the reassignment, Rubio’s kept sending texts to what it thought was that employee’s number. And the new subscriber never asked Rubio’s to stop texting him — at least not until he sued Rubio’s in court for nearly half a million dollars.

Some lawyers go to ridiculous lengths to generate new TCPA business. Some have asked family members, friends, and significant others to download calling, voicemail, and texting apps in order to sue the companies behind each app. Others have bought cheap, prepaid wireless phones so they can sue any business that calls them by accident. One man in California even hired staff to log every wrong-number call he received, issue demand letters to purported violators, and negotiate settlements. Only after he was the lead plaintiff in over 600 lawsuits did the courts finally agree that he was a “vexatious litigant.”

The common thread connecting all of these cases is that the defendants were not illegal telemarketers. They did not violate the popular Do-Not-Call registry. And they were not the fraudsters that state attorneys general and the Federal Trade Commission have (rightfully) targeted for using modern technology to evade the law and peddle fake services. No, they were all legitimate businesses trying to communicate with their customers.

Incredibly, the FCC is about to make abuse of the TCPA much, much easier. On June 18, the Commission will likely vote to open the floodgates for even more TCPA litigation. One part of the plan would impose a strict liability standard on businesses that call a telephone number that’s been reassigned from a customer to someone else. Even if the business has no reason to know that it’s calling a wrong number, it’ll be liable. With 37 million phone numbers reassigned each year and no reliable numbers database for businesses to consult, this is an invitation for more abusive lawsuits.

Similarly, the FCC will dramatically expand the TCPA’s reach. Right now, the TCPA applies to “automatic dialing systems” — think clunky, 1980s-era machines that can automatically call a set of phone numbers. But the FCC soon will sweep into this definition everything from smartphones to Internet-to-text message apps. In other words, almost every call between a business and its customers will become a potential TCPA violation. The coming wave of litigation will serve no one but lawyers.

There is simply no reason for the government to help the trial bar update its business model for the digital age. Instead, the FCC should curb the gotcha lawsuits and focus on what the TCPA was designed to do — stopping illegal telemarketers.

Ajit Pai is a member of the Federal Communications Commission.