Consumer Financial Services Legal Update Blog

D.C. Circuit Shuts Down Rite Aid’s Challenge to Expand Healthcare Exemptions under the TCPA and HIPAA

On March 16, 2018, the U.S. Circuit Court of Appeals for the District of Columbia issued a groundbreaking decision in ACA Int’l v. FCC, No. 15-1211, 2018 U.S. App. LEXIS 6535 (D.C. Cir. Mar. 16, 2018) that raises a number of questions regarding the future of the Telephone Consumer Protection Act. The ACA Int’l decision, however, left certain healthcare communications intact while establishing the test in which a party is an “aggrieved party” for purposes of challenging orders issued by the Federal Communications Commission (“FCC”). This article provides a brief overview of the TCPA regulatory landscape and examines the implications of the ACA Int’l decision for the healthcare industry.

District Court Holds Consumer May Sue U.S. Governmental Entity for Money Damages under FCRA

On February 7, 2018, the U.S. District Court for the Eastern District of Michigan denied a motion by the U.S. Department of Agriculture (“USDA”) to dismiss a lawsuit filed against the USDA seeking money damages for alleged violations of the Fair Credit Reporting Act (“FCRA”). In moving to dismiss, the USDA argued that the FCRA claim was barred by federal sovereign immunity. However, the court rejected that argument, holding that the U.S. Government had waived its sovereign immunity from actions seeking monetary relief for FCRA violations. As a result, the court held, it had subject matter jurisdiction over the FCRA claim. See Jones v. United States Dep’t of Agric., No. 17-11530, 2018 U.S. Dist. LEXIS 19886 (E.D. Mich. Feb. 7, 2018).

Autodialer Junction, What’s Your Function? D.C. Circuit Reverses FCC’s Internally Inconsistent Interpretations of ATDS Functionality

The D.C. Circuit’s reversal of the FCC’s pronouncements as to “the precise functions that a device must have capacity to perform for it to be considered an ATDS,” will likely prove to be the most consequential aspect of the court’s opinion in the ACA International appeal. ACA Int’l v. FCC, No. 15-1211, 2018 U.S. App. LEXIS 6535 at *9 (D.C. Cir. Mar. 16, 2018) (“ACA Int’l”). The decision gives the FCC a blank slate to take a fresh look at this issue, and there is potential for big changes on the horizon.

D.C. Circuit Holds that FCC’s Interpretation of the Term “Capacity” is Invalid Because It Makes Nearly Every American a “TCPA-Violator-in-Waiting”

The D.C. Circuit has rejected the FCC’s “impermissibly expansive” interpretation of what constitutes an Automatic Telephone Dialing System (“ATDS”) under the TCPA. ACA Int’l v. FCC, No. 15-1211, 2018 U.S. App. LEXIS 6535 (D.C. Cir. Mar. 16, 2018) (“ACA Ruling”). Under Congress’s two-pronged definition of the term, an ATDS is equipment that: (1) “has the capacity”; (2) to function as an autodialer (i.e. “store or produce telephone numbers to be called, using a random or sequential number generator”). The ACA Ruling addresses the ATDS definition in two parts – first analyzing the meaning of the word “capacity” and then analyzing the functionalities required of an ATDS. This article will focus on the first of these two pieces of analysis – the meaning of the term “capacity.”

Federal Court Orders Loan Servicer to Comply with CFPB’s CID Investigating Potential UDAAP and FCRA Violations

On February 28, 2018, a Pennsylvania federal district court granted a petition by the CFPB to enforce a CID against a student loan servicer to investigate potential Unfair, Deceptive or Abusive Acts or Practices or violations of FCRA in CFPB v. Heartland Campus Solutions, ECSI. The court applied the Supreme Court’s Morton Salt test applicable to investigative demands, and ruled in the CFPB’s favor, marking a court victory for the Mulvaney-led CFPB in investigative efforts to enforce a CID against the loan servicer.

D.C. Circuit Dooms “Idiosyncratic” or “Imaginative” TCPA Revocation Efforts While Blessing Contractual Revocation Provisions in Upholding FCC’s Revocation Approach

Nearly a year-and-a-half after oral argument on the ACA International v. FCC petition for review of the Federal Communications Commission’s 2015 Omnibus Order, the D.C. Circuit Court of Appeals issued its long-anticipated opinion last Friday, March 16th, in a 51-page decision authored by Judge Srinivasan. This article focuses on the D.C. Circuit’s handling of the issue of revocation of consent and its further implications for contracting parties addressing the same.

D.C. Circuit Court of Appeals Sets Aside FCC’s Definition of “Called Party” Under the TCPA—What Comes Next?

The TCPA makes it unlawful to make autodialed calls without the prior express consent of the “called party.” The statute does not define the term “called party,” leaving parties on both sides of the aisle scratching their collective heads as to what person or persons fall within this category. The definition of “called party” is particularly important because prior express consent of the called party is a complete defense to the TCPA. Thus, identifying the “called party” is a crucial component to any TCPA compliance regime and/or lawsuit. Unsurprisingly, this was one of the principal issues addressed by the D.C. Circuit in its recent blockbuster ACA Int’l v. FCC decision, with important implications for future litigants.

Your Definitive Guide to the ACA Int’l Ruling: The Top 10 Things Every TCPAlander Needs to Know Now

It’s here! It’s here! It’s finally here! At last, I no longer need to field the question of “When, oh when, is the D.C. Circuit going to rule on the ACA Int’l appeal of the FCC’s TCPA Omnibus ruling from 2015?” Now we know the answer: right in the middle of March Madness, of course. Forced, as I am, to look up from the basketball games, I now must face the biggest TCPA questions of all: What is the current state of the law respecting predictive dialers? Can we use contractual revocation provisions to full effect? Who is the called party? Is the TCPA constitutional? This is my definitive take on these and other TCPA issues arising from the big D.C. Circuit ruling of ACA Int’l v FCC, No. 15-1211, Doc. No. 1722606 (D.C. Cir. Mar. 16, 2018).

District Court Overrules Magistrate’s Order Compelling Prior Complaint Information and Related Data in TCPA Class Action

Quicken Loans scored a victory earlier this week when Judge Steven D. Merryday sustained its objection to a magistrate judge’s order compelling production of every shred of documentation in any form about every do-not-call request that Quicken received. See Nece v. Quicken Loans, Inc., No. 8:16-cv-2605-T-23CPT, 2018 U.S. Dist. LEXIS 31346 (M.D. Fla. Feb. 27, 2018).

Ninth Circuit Lowers the Axe on Oft-Criticized TCPA Standing Opinion

The Ninth Circuit Court of Appeal overruled the district court’s dismissal of a TCPA case for lack of Article III standing yesterday in Elisa Romero v. Department Stores National Bank, No. 16-56265, 2018 WL 1079728 (9th Cir. Feb. 28, 2017). The district court ruling in Romero was an oft-cited and oft-criticized opinion that held, in essence, that the harm caused by phone calls must be attributable to the use of an ATDS to give rise to Article III standing. It also suggested that debt collection phone calls don’t really cause harm at all.

Church Provides No Sanctuary: Sixth Circuit’s FDCPA Decision May Breathe New Life into TCPA Spokeo Arguments

A number of Circuit Courts of Appeal have addressed Spokeo challenges to consumer protection statutes in the 646 days (and counting) since the U.S. Supreme Court handed down Spokeo, Inc. v. Robins in 2016. Most of those decisions have given the issue of standing short shrift, leapt to conclusions or—perhaps worst of all—shown a deep and unrelenting deference to Congressional legislative power in assessing Article III limits. The result has been languid opinions and squishy legal doctrine in the arena of standing, where only precision and intellectual rigor ought to prevail. Hagy v. Demers & Adams, No. 17-3696, 2018 U.S. App. LEXIS 3710 (6th Cir. Feb. 16, 2018) marks a stark departure from its soft-thinking predecessors, and represents the first intellectual tour-de-force of the post-Spokeo era.

Changes at the CFPB: Dorsey Partner Quoted in American Banker Article, “Mulvaney Looks to Neuter CFPB’s Most Potent Weapon”

American Banker quoted Dorsey & Whitney partner Jenny Lee in an article reporting on the Consumer Financial Protection Bureau’s new strategic plan. The article observes how the CFPB’s February 12, 2018 plan dropped all mention of “unfair, deceptive or abusive acts or practices” from the Bureau’s vision statement, suggesting that Mick Mulvaney will de-emphasize actions against regulated entities for so-called UDAAP violations.

D.C. Circuit Upholds CFPB’s Constitutionality: Why the PHH Case Underscores the Importance of Internal Agency Discipline

On January 31, the D.C. Circuit issued a plurality opinion confirming the constitutionality of the CFPB governance by a sole Director, while reinstating the decision below that struck down the CFPB’s $109 million disgorgement demand in the underlying dispute. Moving forward, the decision puts the spotlight on several important issues for those interested in the CFPB’s activities.