‘Waves of Autodialer Litigation’ Forecast Under State Mini-TCPAs

A mini-TCPA called the Oklahoma Telephone Solicitation Act (OTSA) takes effect Nov. 1. It’s similar to the 2021 FTSA, which survived its first constitutional challenge last month. Amendments tightening Washington state’s telemarketing law took effect Thursday.

The U.S. Supreme Court’s April 2021 decision in Facebook v. Duguid, narrowing the definition of auto dialer (see 2104010063), produced a “ripple effect,” said Reilly. Previously, many cases claimed TCPA violations for autodialed calls or text messages, but now those cases are “far more challenging” to pursue and many plaintiff lawyers stopped filing them, she said. “A lot of the state regulators looked at that and there was fear” that Facebook “would open the door to a lot more calls,” said Reilly: They realized they could make their own state laws more restrictive.

“Other states are looking at Florida as paving the way towards a model for more restrictions,” said Reilly. Oklahoma’s new law is “essentially a copycat of Florida,” the lawyer said. Washington’s law is more limited and allows private suits only for repeated violations, but the state has a “pretty pro-consumer, very active” AG, she said. Reilly expects more states -- red and blue, and particularly those with attorneys general who are active on consumer issues -- to “join that bandwagon.” Congress is unlikely to preempt states, she said.

Goodwin attorney Brooks Brown expects “an increase in mini-TCPA lawsuits, and that defendants will continue to raise constitutional and other challenges to mini-TCPA laws in defending those lawsuits,” he said. Since TCPA plaintiffs’ bar attempts to limit the Supreme Court’s Facebook decision on automatic telephone dialing systems (ATDS) have been mostly unsuccessful, Brown predicts “more plaintiffs attempting to pursue ATDS claims through mini-TCPA laws,” he said. “Whether states and plaintiffs are successful in enforcing mini-TCPA laws that conflict with the TCPA remains to be seen,” but it’s likely three to five more states “will enact new mini-TCPA laws or amend existing laws to attempt to restrict certain calls and text messages,” he said.

Florida had “a significant surge of litigation” over the past year, said Reilly. The Manatt firm doesn’t have a Florida office, “but we are regularly practicing and appearing in Florida state courts with local counsel just because there are so many of these cases filed.” FTSA and laws like it including private rights of action have allowed so many complaints, she said.

To business attorneys who say “FTSA is producing far too many class-action lawsuits, my response is simple,” emailed Shamis, whose firm has filed multiple FTSA-based, class-action complaints. “Why do their clients continue to ignore the law? People do not like spam texts to their phone and if companies continue to ignore the law and bombard these people with unrelenting spam texts, there will be people who are eager to bring these lawsuits.”

“Companies have asserted multiple constitutional challenges to the FTSA, including arguments that it is preempted by the TCPA, violates the Dormant Commerce Clause because it improperly regulates interstate commerce, violates the First Amendment, and is unconstitutionally vague,” Brown and other Goodwin attorneys blogged May 31. But in a May 18 order in Turizo v. Subway (case 21-61493), the U.S. District Court for Southern Florida “rejected all constitutional challenges and declined to dismiss a class action where the plaintiff claimed he received allegedly automated text message advertisements without his prior express written consent,” the lawyers said.

Additional federal cases with constitutional challenges to FTSA are pending, including Borges v. SmileDirectClub (case 1:21-cv-23011) and Mancilla v. GR Opco (case 1:22-cv-21211) in Florida’s southern district, plus Pariseau v. Built USA (case 8:21-cv-2902) in the middle district. A hearing in the GR Opco case is scheduled for July 11 (see 2206080024). Florida legislators this year failed to pass proposed changes to FTSA in response to the surge (see 2202080046).

Expect “waves of autodialer litigation” after OTSA takes effect Nov. 1, Venable’s Daniel Blynn and Ian Volner blogged May 24. The law allows for private enforcement with $500 per violation, which can be tripled if a violation is deemed to be willful or knowing, they noted.

Systems that can qualify as an automated system under Oklahoma’s law aren’t limited to what would qualify under TCPA, cautioned Ballard Spahr attorneys Daniel McKenna and Jenny Perkins in a May 25 post. Manatt attorneys also noted that issue May 26: “Systems that do not randomly or sequentially generate numbers but that do have some automated method of selection (linking a live person to an agent) or dialing (system dials then links to an agent) are arguably covered.” Some probably will try “to stretch the statute even more broadly" to cover the human click-to-call systems” that most courts hold as exempt from TCPA’s autodialer definition, they said.

Mini-TCPAs set “varying degrees of liability,” Benesch attorneys Mark Eisen and Emily Johnson wrote June 6. "Terms like ‘automated system’ and ‘commercial telephonic sales call’ have no definition, meaning courts and litigants will be the first to interpret these naturally vague terms.”