Samantha Duke, with Rumberger, Kirk & Caldwell.

Virtually any business that contacts customers on their mobile device is at risk for a potential class action lawsuit brought under the Telephone Consumer Protection Act (TCPA), regardless of industry or jurisdiction. The TCPA prohibits the use of automatic telephone dialing systems (ATDS) or "auto-dialers" to contact consumers on their mobile phones, without the consumers' express consent.

Failure to comply with the TCPA could result in statutory fines of at least $500 for every call or text sent to a consumer. The challenge for businesses in today's market: With the ever-evolving definition of ATDS, it is nearly impossible to know whether the communication is covered by the TCPA. Thus, Florida businesses should carefully evaluate their compliance with the TCPA, no matter the definition of ATDS, in order to avoid the potential penalties that can be imposed in TCPA class action litigation.

Inconsistent ATDS Definition Causes Confusion for Business

 The definition of an ATDS is not clear. The TCPA defines ATDS as, "Equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers." In 2015, the Federal Communications Commission (FCC) issued an omnibus order that "clarified" that dialing equipment with the capacity to store, produce and dial numbers at random or sequentially, even if not currently used for that purpose, qualifies as an auto-dialer.

This order was challenged by the business community and in 2018 the U.S. Court of Appeals for the D.C. Circuit struck down the FCC's interpretation, finding that under the FCC's broad interpretation of "capacity," "all smartphones would qualify as auto-dialers because they have the inherent 'capacity' to gain ATDS functionality by downloading an app." However, in striking down the FCC's interpretation, the court of appeals did not clarify what capacity was needed for equipment to be deemed an ATDS under the TCPA and handed the task to the FCC to further define an ATDS.

The FCC sought public comment on how it should interpret the phrase ATDS. Meanwhile, "robocall" legislation is moving through both houses of Congress and is likely to result in compromise legislation based on the bipartisan support given to both bills. This may offer more clarity or may ultimately result in a TCPA shakeup in the future. Until then, defining an ATDS remains a hotly contested issue.

For example, the Third Circuit Court in Dominguez v. Yahoo, affirmed summary judgment for Yahoo and found the plaintiff failed to present evidence that the Yahoo text-email service had the present capacity to function as an ATDS and the record only showed that the service sent messages to numbers that had been individually and manually inputted into its system by a user. By comparison, the Ninth Circuit Court in Marks v. Crunch San Diego reversed summary judgment for Crunch and found that an "ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator."

What Can a Business Do Now to Ensure Compliance?

 Until clarification is given, businesses that use technology or text messaging to contact consumers are vulnerable under the TCPA and should implement and update their marketing practices to ensure TCPA compliance. Those steps include:

• Get express written consent: Before your business sends any text messages or makes a call to a cellphone, get express written consent from the customer. The request for consent must be conspicuous and clear, and the burden will be on your business to prove consent if sued. Therefore, keep all proof of consent for four years (the TCPA statute of limitations). Finally, even with express consent, confirm that your business is calling the right number and that the number has not been reassigned. The "called party" under the TCPA is the recipient of the call, not the person whom you intended to call. Thus, if you do not have the consent of the called party, your business could be liable. To aid businesses moving forward, the FCC issued a final rule and order creating a reassigned numbers database that will provide information businesses will be able to use to avoid calling reassigned numbers.
• Give the consumer the option to opt-out: Even if your business has express written consent, the consumer is allowed to revoke consent at any time, and you must give them the option of opting out. At the beginning of a robocall, the consumer must be informed of their option to revoke consent. If the communication is by text, an option given to the consumer to opt-out by texting "unsubscribe" or "stop" has been found sufficient.
• Review the practices of third-party vendors: If your business has hired an outside firm to conduct your advertising and marketing, make sure that company is complying with the TCPA and other regulations. Your company can be held liable for violations committed by a telemarketing firm working on your company's behalf. The responsibility to ensure and maintain compliance is with the company that commissions the third party, meaning your business cannot contract away compliance responsibilities.

Samantha Duke is an attorney in the Orlando office of Rumberger, Kirk & Caldwell, where she practices commercial litigation, consumer defense law, products liability and casualty litigation. Contact her at [email protected].