ACCESS MCLE

Privacy Laws

Applicable To Wireless Marketing

William B. Baker (202) 719-7255

wbaker@potomaclaw.com

DISCLAIMER

These materials and accompanying Access MCLE, LLC audio CLE program are for instructional purposes only. Nothing herein

constitutes, is intended to constitute, or should be relied on as, legal advice. The author expressly disclaims any responsibility for

any direct or consequential damages related in any way to anything contained in the materials or program, which are provided on

an “as-is” basis and should be independently verified by experienced counsel before being applied to actual matter.

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1. Laws Applicable to Wireless Marketing slide 3

2. TCPA, 47 U.S.C. §227(b)(A) slide 6

3. What Is A “Call”? slide 7

4. What is an “ATDS”? slide 8

5. Court Rulings slide 11

6. TCPA: Prior Express Consent slide 12

7. Text Marketing slide 18

8. Vicarious Liability Under the TCPA slide 19

9. “Do Not Call” slide 20

10. Email Marketing and CAN-SPAM Act slide 21

11. The Role of the FTC slide 22

12. FTC’s Recent Enforcement Priorities slide 23

13. Mobile Apps slide 24

14. Private Lawsuits slide 25

Table of Contents

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Principal Federal Laws Applicable

to Wireless Marketing

– Telephone Consumer Protection Act, 47 U.S.C. §227

– Do Not Call Act

– CAN-SPAM Act, 15 U.S.C. §7701-7713

– FTC Telemarketing Sales Rule

– FTC Section 5 Consumer Protection Authority

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Laws and Rules Vary By Media

• These federal (and state) laws were enacted

years before smartphones

• Some require opt-in consent for marketing;

some opt-out

• Some require consent to be written, others allow

oral consent or do not require at all

• Format of address makes a difference

• Enforcement mechanisms vary

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Which law applies depends on the

technology used

• Voice • TCPA, Do Not Call, Telemarketing Sales Rule

• Text • TCPA, Do Not Call

• Email • CAN-SPAM (FTC & FCC)

• Mobile App • FTC Section 5

• Browser • FTC Section 5

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TCPA, 47 U.S.C. §227(b)(A)

“Unlawful . . . to make any call . . . using any

automatic telephone dialing system or an artificial

or prerecorded voice-- . . .

(iii) To any telephone number assigned to a paging

service, cellular telephone service . . . for which

the called party is charged for the call”

FCC can exempt calls that are not charged to

user.

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What Is A “Call”

• Voice calls (live or prerecorded)

• Text messages

• FCC: (GroupMe 2014) texts are “calls”

• Joffe v. Acacia Mortgage (Ariz. 2005); Satterfield (9th Cir.)

• YouMail FCC petition (software-based menu of

advanced voicemail features)

• VoAPPS FCC petition 7/31/14: service leaves

message in wireless vm without calling device

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What is an “ATDS”?

47 USC 227(a)(1) The term “automatic telephone

dialing system” means 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.

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FCC Interpretation of “ATDS”

• FCC (2003):

– Equipment “need only have the capacity to store or produce telephone numbers using a random or sequential number generator” and “to dial such numbers” without human intervention

– FCC has not required that equipment actually use a random or sequential number generator

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FCC has received many petitions for

clarification, reconsideration, exceptions

• 25 petitions for reconsideration/clarification/

exemption currently pending at FCC. 9 address

“ATDS”

• Some seek to loosen: PACE, ACA, TextMe, Glide

Talk: limit “capacity” to configuration when calls

placed

• Some seek to broaden: Fried: if “combined

equipment” collectively can have “capacity” to store

or produce numbers and dial at random,

sequentially, or from a database

• Some seek exemptions for particular types of calls:

American Bankers Ass’n

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Court Rulings Are Mixed

• Compare: – Satterfield v. Simon & Schuster (9th Cir. 2009) & Sherman v. Yahoo

(S.D. Cal. 2014) (potential)

– with Gragg v. Orange Cab (W.D. Wash 2014) (present capability required) & Hunt v. 21st Mortgage Co. (N.D. Ala. 2013) (no liability if substantial modification required to produce calls from number generator)

• Sterk v. Path (N.D. Ill. 2014) (stored #s without “human

intervention” – numbers provided by 3d persons);

interlocutory review pending

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TCPA: Prior Express Consent exception

• FCC (1992) (knowing release of phone number

is permission)

• “absent instructions to the contrary”

• Consents do not expire

• FCC (2012) required PEC for telemarketing to

be in writing as of 10/16/13 and freely given

• FCC (2012) also eliminated 20-year old EBR

exception

• FCC exempted entities subject to HIPAA

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Defining “Prior Express Consent” a frequent

issue in private lawsuits

• Courts have found consent in strange places

– Provided for verification purposes 10 years before the calls were made. Kolinek v. Walgreen Co. (N.D. Il.. 2014)

– Airline web form. Baird v. Sabre, Inc. (C.D. Cal. 2014)

– Blood donor form. Murphy v. CDI Biologicals Orlando (M.D. Fla. 2013).

• But . . .:

– Soppet (7th Cir. 2012): called party means called party, not intended party

– Osorio (11th Cir. 2014): calls to housemate’s cell number that was provided on credit application remanded to determine if agency existed

– Lamont (D.N.H. 2014) (spouse cannot consent for telemarketing to other spouse’s cell phone)

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FCC Rulings on Prior Consent

• In Cargo Airline Ass’n (2014): FCC exempted

package delivery “On-Demand text” notifications

under limited conditions where delivery service

not in position to obtain consent

• GroupMe (2014): prior express consent to non-

telemarketing texts can be obtained by an

intermediary; reaffirmed that texts are “calls”

• SoundBite (2012) (permitting one-time text to

confirm revocation of consent)

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Pending Petitions to FCC re “Prior Express

Consent”

• FCC currently has pending numerous petitions regarding “prior written consent” – ACA: Prior express consent/debt calls – Satcom: Mobile numbers provided prior to 2012 FCC order – Coalition: PWC provided prior to 10/16/2013 effective date of 2012

Order – DMA: Asks for forbearance for consents obtained prior to 10/16/2013 – Retail Industry Leaders Ass'n: “On-Demand” text services– 1 time texts

initiated by consumer – Stage Stores: asks exception for call to wireless number for which

prior express consent existed before reassigned without notice/knowledge of caller

– Rubio’s (8/11): seeks exception where employer has PEC to “remote text messaging alerts” to employees, then number is reassigned without its knowledge

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Big current issue: the Effect of Number

Reassignment on Consent

• Problem: User who gave prior consent turns in phone and number is subsequently reassigned to new user

• Soppet (7th Cir. 2012): “called party” means called party • Calls to reassigned or ported numbers (at least 6 petitions to FCC

pending)

– Stage Stores: wireless number for which prior express consent existed before number was reassigned.

– United Healthcare: seek exception/exemption for informational calls to numbers ported to wireless unbeknownst to caller

– ACA: asks FCC to rule that PEC attaches to the debtor, not to the phone number. Also wants “safe harbor” for autodialed non-telemarketing calls to “wrong numbers”

– Comcast: exception for any calls to reassigned numbers where caller had PEC and caller unaware of reassignment

– Consumer Bankers Ass’n (9/19): “called party” means “intended recipient”

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Can Prior Express Consent be revoked?

• Yes. Gager v. Dell (3d Cir. 2013)

• FCC has implicitly said yes: SoundBite (FCC

2012) (one-time text to confirm revocation of

consent)

• Maybe not: Santander Consumer USA FCC

petition asks for ruling that consent cannot be

revoked for non-telemarketing calls and texts, or

only under certain conditions.

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Text Marketing

• FCC and some courts have ruled that texts are “calls” under the TCPA

• TCPA applies: ATDS & DNC restrictions

• FTC’s TSR applies: TSR & DNC restrictions

• SoundBite (FCC 2012): confirmatory texts ok

w/in 5 minutes

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Vicarious Liability Under the TCPA

• DISH Network (FCC 2013): sellers can be

vicariously liable for actions of its telemarketers

• Extent of vicarious liability

– Lucas(FCC petition): person assisting telemarketer and “knows or consciously avoids knowing” of TCPA violations

– Smith v. State Farm (N.D. Ill. 8/11/2014)

• Insurance coverage issues

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“Do Not Call” Applies to Mobile Devices

• FTC established registry under TCFAPA & TSR

• FCC extended scope under TCPA

• Mobile numbers eligible

• “EBR” is exception to Do Not Call, but not to

ATDS

• Limited safe harbor for erroneous calls to mobile

devices on DNC registry

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Email Marketing: Subject to

the CAN-SPAM Act

• FTC in 2004 created opt-out regime for email marketing

• FCC authority over “Mobile Service Commercial

Messages”

– Emails addressed to Internet domain names assigned by wireless carriers (e.g., @att.mobile.net or 2025551212@carrier.com

– http://transition.fcc.gov/cgb/policy/DomainNameDownload.html

– FCC uses FTC “commercial purpose” test

– Strict express opt-in (can be oral)

– Texts are “calls” (TCPA); not emails (CAN-SPAM)

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The Role of the FTC

• Primary consumer protection agency

• FTC’s Telemarketing Sales Rule prohibits

deceptive/abusive telemarketing practices

• FTC created DNC Registry as part of TSR; Congress

ratified with Do Not Call Act

• TCPA gave no authority to FTC, but provided legal basis

for FCC to extend Do Not Call to entities under its

jurisdiction

• FTC: primary regulator of commercial email under CAN-

SPAM Act

• FTC: primary enforcer of Children’s Online Privacy

Protection Act

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FTC’s Recent Enforcement Priorities

• Mobile App Recommendations

• Amendments to COPPA regulations

• Dot.Com Disclosures

• Big Data report

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Mobile Apps

• FTC

– Shopping Apps (Aug. 2014)

– “Dot.com Disclosures” (Mar. 2013)

• NTIA multistakeholder process

• Location as “sensitive” information

– Mobile App Privacy Disclosures (Feb. 2013)

– COPPA: yes, and specifically applies to mobile apps

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Private Lawsuits

• Two private rights of action under TCPA

• ATDS/prerecorded to mobile ($500)

• Do Not Call ($500)

– Penalties per call

– Treble damages for knowing/willful

– Class actions

• FTC Act/TCFAPA enforced by agency.

• Insurance coverage?

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