Congress Must Address TCPA Litigation Risks, Chamber of Commerce Will Argue

“Ultimately, finding the right balance [on this issue] is essential to protecting the privacy of consumers while making sure they have reasonable access to the information they want and need, and making sure good faith business actors can reasonably assess the cost of doing business,” Commerce Committee Chairman John Thune, R-S.D., plans to say in his opening statement.

Parts of the TCPA are “horribly outdated; in particular, Section 227(b), which addresses technologies used for cold-call telemarketing in the early 90’s, is now being expanded to attach liability to all manner of calls (i.e., informational and transactional) placed by businesses small and large to customer-provided numbers,” Snell and Wilmer's Becca Wahlquist, testifying on behalf of the U.S. Chamber of Commerce and U.S. Chamber Institute for Legal Reform, will say at the hearing. “TCPA litigation is also fueled by statutory damages that are untethered to any actual harm, and that can quickly balloon to staggering amounts of potential liability. Unfortunately, it is American businesses, and not harassing spam telemarketers, who are the targets for these suits.”

The Chamber and several state Chambers of Commerce signed a Tuesday letter to Commerce Committee leaders making similar charges. “Given that the TCPA has not been meaningfully amended by Congress since 1991, countless well-intentioned businesses and organizations (small and large) who legitimately try to communicate with employees, members or customers find themselves defending abusive class action litigation,” said the letter, also signed by the American Association of Healthcare Administrative Management, the Consumer Bankers Association, the Electronic Transactions Association, the National Retail Federation, the Newspaper Association of America, the Satellite Broadcasting and Communications Association and the U.S. Chamber Institute for Legal Reform. “The alleged liabilities appear in many forms and are usually based on expansive legal theories that Congress never intended when it first enacted the TCPA.”

“The TCPA is outdated and needs to be modernized immediately,” Stephenson Acquisto's Rich Lovich, testifying on behalf of the American Association of Healthcare Administrative Management, will tell Senate Commerce. “The FCC’s recent decision was disappointing and troubling for us in the healthcare industry.” Congress should tweak the TCPA to “allow automated dialing technology to be used to text or call mobile phones, as long as these texts or calls are NOT for telemarketing purposes,” he will say.

Squire Patton's Monica Desai, testifying in an individual capacity, will call TCPA compliance “a serious dilemma” for many of her clients. “The careful balance that Congress struck between protecting consumers and safeguarding beneficial calling practices has all but been eliminated,” Desai, a former FCC official who headed the Consumer and Governmental Affairs Bureau, will testify. “The resulting state of disarray is not without significant cost.” She plans to discuss how utilities, mobile health programs and nonprofits are vulnerable to such litigation. The situation has worsened, she will argue: “In 2010, there were 354 TCPA cases filed. In 2015, there were 3,710.”

The balance requires restoration, Desai will argue. “One idea moving forward would be to establish a telephone number subscriber database that would require the participation of all carriers, and timely updates by the carriers to the database,” she will testify. “A TCPA safe harbor should be provided for callers who check the database for confirmation that the number that they have been provided consent to call or text has not been reassigned. … Congress should confirm that when it enacted the TCPA it did not intend for it to become a ‘litigation trap’ where compliance-minded callers are put at untenable risk for engaging in beneficial, normal, expected or desired communications, and where consumers are also suffering the consequences.”

“Congress needs to take a hard look at updating the TCPA in a manner that provides more certainty and protection for businesses who need to legitimately communicate with their customers and employees, and who strive to comply with the law but who, for example, may unknowingly be calling a reassigned number, or have a customer representative err in recording a revocation request,” Wahlquist will say. “If Congress wishes to pull text messages into the TCPA’s protection, then it should assess what rules should apply.” Congress could consider applying statutes of limitations and capping statutory damages and adding a provision for reasonable attorneys’ fees and modifying provisions on affirmative defenses and capacity, she will recommend. “The TCPA should be reformed to focus on the actual bad actors (i.e., fraudulent calls from ‘Rachel from Cardmember Services,’ with spoofed numbers in Caller ID fields to hide the identity of caller), instead of companies trying to contact their consumers for a legitimate business purposes,” she will say.

Another key TCPA debate involved last year’s budget law enabling robocalls to cellphones for the collection of debt. Senate Democrats introduced legislation -- the Help Americans Never Get Unwanted Phone Calls (Hangup) Act (S-2235) -- last year to repeal that provision. The FCC, as ordered by the law, is currently reviewing proposed limits to these types of robocalls (see 1603100057).

Indiana Attorney General Greg Zoeller led several attorneys general in a letter urging Congress to take up this Democratic legislation (see 1602170026). Zoeller will testify about the TCPA’s consumer protections. “My attorney general colleagues and I work aggressively in our states to stop unwanted, harassing calls to peoples’ landlines and cell phones,” Zoeller will say. “Our citizens continue to file complaints that they greatly object to these calls and I urge Congress to stop allowing loopholes that weaken state efforts to serve and protect consumers.”

Margot Saunders, of counsel to the National Consumer Law Center, is also scheduled to testify, but her testimony wasn’t available at deadline. The hearing will take place at 10 a.m. in 253 Russell.