U.S. Chamber of Commerce’s Faulty Argument Against the TCPA
Response to 'TCPA Litigation Sprawl' Paper by Institute for Legal Reform.
In August 2017, the U.S. Chamber Institute of Legal Reform issued, “TCPA Litigation Sprawl: A Study of Sources and Targets of Recent TCPA Lawsuits.” Not surprisingly, the Chamber of Commerce defended practices that regulatory agencies and the courts have ruled violate the Telephone Consumer Protection Act, and painted U.S. businesses as victims of consumer attorneys who represent people exercising their rights. Just like the big businesses’ attempts to channel aggrieved consumers’ claims into confidential ‘arbitration‘ proceedings, this is a bid for immunity, nothing more, nothing less.
The Chamber report relied on 17 months of data collected from court dockets following a 2015 Federal Communications Commission (FCC) ruling clarifying allowable practices under the TCPA. The ruling, which came about as a response to petitions from 21 companies and trade associations – many of which were aligned with the Chamber’s position – defined “predictive dialer” in a way that prevented robocalling companies from claiming that their equipment and practices were beyond the purview of the TCPA. Beyond closing that loophole, the ruling also determined that the onus was on companies to refrain from robocalling the wrong number. Businesses argued that they should only be penalized if they robocalled a cell phone without the consent of the intended recipient, rather than the actual recipient. In other words, the FCC ruled that it was illegal to call wrong numbers without the actual recipient’s consent.
The FCC ruling covered a number of other issues, such as clarifying that the sender of a spam text message and not the text messaging provider was liable under the TCPA for spam texts. Importantly, the ruling also noted that consumers could verbally revoke their consent to receive robocalls and commercial texts.
How Accurate are the Chamber of Commerce Findings on TCPA Lawsuits?
The Chamber’s report decried the 46% increase in TCPA litigation between the 17 months prior to and following the FCC ruling. However, the absolute numbers (2,127 lawsuits vs. 3,121 lawsuits) do little to support the overwrought tone of the report, which asserts dire warnings that “there is little that can stop the spread of TCPA litigation abuse.” In reality, the difference amounts to only about one additional case per state per month. That’s still less than the staggering 3,500 lawsuits in which President Trump, alone, has been involved, many of which were disputes with mom-and-pop contractors.
Similarly, the raw numbers belie the pearl-clutching claim that cases were brought against companies in 40 different industries. The report acknowledges that 36% of the cases were brought against companies in the financial services sector. It would follow, then, that the remaining cases averaged out to 51 per industry, or a not-so-astounding three per month per industry.
The Chamber’s report also points a finger at repeat plaintiffs and what they term “professional plaintiffs,” and bemoans that consumers across the U.S. – rather than simply in California, Florida, and Illinois – asserted their rights under the TCPA. But it saves its largest salvo for class action lawsuits, which arise from situations where large numbers of consumer are impacted, making individual lawsuits impractical. Although the report condemns large class action settlements, it undermines its own argument about the impact of the 2015 FCC ruling. Of the 39 class action settlements listed in the report, only seven were filed in or after 2015.
Sergei Lemberg: “Consumer Law Firms are the Best Recourse against Unsolicited Robocall Offenders”
Lemberg Law and other consumer law firms were called out in the report as “frequent TCPA filers.” Sergei Lemberg, the firm’s principal, proudly acknowledged his firm’s role in the uptick in TCPA cases. “Every consumer has been hounded by unsolicited robocalls,” he said. “It’s the role of consumer law firms to educate people about their rights and to hold businesses accountable.” Noting that the government is able only to bring suit against the worst offenders, Lemberg said that private attorneys must fill the gap. “We are unapologetic about getting positive results for our clients. They deserve no less.”
Lemberg concluded by pointing out that businesses have every right to call consumers who have given their consent to be called. “It’s ludicrous that the Chamber is whining about the number of TCPA cases filed across the U.S., when the best defense against such lawsuits is to simply comply with FCC regulations,” he said.