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Defending Class Action Lawsuits

Have you been served with a Telephone Consumer Protection Act (“TCPA”) class action? If so, several questions come to mind: What is the TCPA? Why am I being sued? How do I make this TCPA lawsuit go away without destroying my business?

By way of background, the TCPA was enacted in 1991 and, with some exceptions, the law allows individuals to file lawsuits (including class action lawsuits) to collect damages for having received unsolicited telemarketing calls, faxes, pre-recorded phone calls or auto-dialed telephone calls. The TCPA has been interpreted by the Federal Communications Commission (“FCC”) and various courts to also include unsolicited texts messages.

The TCPA allows for actual damages, or statutory damages ranging from $500 to $1,500, per unsolicited call/text message. Not surprisingly, the TCPA has therefore become fertile ground for class action litigation.

So what should you do when your business is named in a TCPA class action? The first steps you take are crucial.

First, resist the temptation to call the plaintiff’s counsel in defense of your business practices. Why? Speaking with the plaintiff’s counsel can sometimes cause more harm than good because even if you believe your business practices to be proper, they may in fact be unlawful.  Sharing your business practice with your adversary directly may simply confirm plaintiff’s case, and inadvertently serve as an admission of wrongdoing.  Therefore, do not say anything to anyone about the case, including your employees, until you’ve had the opportunity to speak with counsel.

Second, you only have 20 days to respond so immediately contact an experienced TCPA defense counsel, and provide them with all of the details and background information.

Third, realize that experienced TCPA counsel will know the right questions to ask you and will be aware of the numerous potential defenses that may apply to your case. For example, did you have consent from the recipient to send him/her the text message/call? How large or small was the applicable marketing campaign? Was the campaign limited geographically? Were you erroneously named?  Were you improperly served?  Does the plaintiff lack standing to sue in federal court because there is no injury in fact that is both concrete and particularized? Do the class representatives have individualized injuries or factual circumstances that are inappropriate for class action resolution?

These defense may enable you to obtain a positive outcome, or, at minimum, substantially limit the damages. Fortunately, there is also a recent U.S. Supreme Court ruling that may be beneficial to you.

Specifically, on May 16, 2016, the U.S. Supreme Court issued its much awaited decision in Spokeo v. Robins, holding that plaintiffs must show an injury in fact that is both concrete and particularized to bring a Fair Credit Reporting Act (“FCRA”) lawsuit. The decision also affects other statutes that grant individuals a private right of action to sue for statutory damages without any proof of injury, such as the TCPA.

In the Spokeo lawsuit, the plaintiff brought a class action against Spokeo for allegedly violating the FCRA. However, the plaintiff was not able to allege at the time of filing the federal lawsuit that he had actually been damaged by having been denied credit, a job, or insurance based on the alleged violation.

In federal court, a plaintiff must have Article III standing to sue, which requires a showing that he has suffered an “injury in fact” that is traceable to the defendant’s conduct at issue.  Therefore, the Spokeo defendant moved to dismiss the suit based on the plaintiff’s lack of standing. The Supreme Court agreed, and held that a procedural violation of a statute, without any injury in fact that is both concrete and particularized, does not satisfy Article III standing. The plaintiff’s case was thrown out.

If you are facing a TCPA class action litigation, HRKM can help. Please e-mail us at [email protected] or call us at (407) 926-7460.