The Telephone Consumer Protection Act (“TCPA”) allows for autodialer and prerecorded calls to be made to a called party that provided his or her consent. But as the defendant in Schwartz v. Hall Insurance Group., Inc.[1] learned, consent is not always a surefire defense in a TCPA case. That is especially true when making prerecorded calls to leads purchased from a third party. Schwartz provides a good opportunity to review the TCPA’s rules on autodialer and prerecorded calls.
TCPA’s Autodialer and Prerecorded Voice Rules
The TCPA prohibits making nonemergency calls using any automatic telephone dialing system (“ATDS”) or an artificial or prerecorded voice to any telephone number assigned to a cellular telephone service, unless the called party provided his or her prior express consent (“PEC”).[2] The TCPA also prohibits making certain calls using an artificial or prerecorded voice to a residential telephone line, unless the called party provided his or her PEC.[3]
The Federal Communication Commission’s (“FCC”) TCPA-implementing regulations impose additional rules on ATDS and prerecorded calls. For example, one rule prohibits making a call that includes or introduces an advertisement or constitutes telemarketing, using an ATDS or an artificial or prerecorded voice, unless the called party provided his or her prior express written consent (“PEWC”).[4] PEWC is defined in the FCC’s regulations,[5] while PEC is not. PEWC is a higher standard than PEC.
Schwartz v. Hall Insurance Group., Inc.
In Schwartz, the plaintiff alleged that she received two unsolicited telemarketing calls and one text message from the defendant.[6] The plaintiff alleged that the calls and text were made with an ATDS and one call began with a prerecorded message, in violation of the TCPA.[7] The defendant provided an affidavit explaining that its calls to the plaintiff arose from leads it purchased from a third party.[8] It was the defendant’s understanding that the leads had provided their consent to be contacted through a website used by the third party.[9]
- ATDS Allegations
The defendant was able to easily defeat the ATDS usage allegations through an affidavit of an employee. The affidavit provided that the defendant’s system could only dial telephone numbers that were manually entered, and the system lacked the capacity to use a random or sequential number generator.[10] The employee stated that she had manually entered the plaintiff’s telephone number, which resulted in the system dialing that number.[11]
The court properly analyzed the alleged ATDS usage under the Supreme Court’s Duguid opinion.[12] Per Duguid, for a system to be an ATDS, it must have the capacity to either store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.[13] The plaintiff failed to present any competent evidence contradicting the defendant’s representation that its system lacked the capacity to use a random or sequential number generator.[14] Thus, the court granted summary judgment to the defendant on the ATDS portion of Plaintiff’s TCPA claim.[15] But that was not the end of the case, because the relevant portion of the TCPA applies to calls made with an ATDS or a prerecorded voice.
- Prerecorded Voice Allegations
While the court found that the defendant’s calls to plaintiff did not involve an ATDS, the calls would still have violated the TCPA if they were made with a prerecorded voice and the plaintiff did not provide his PEWC. The defendant’s employee admitted that at least one of the defendant’s calls to the plaintiff began with a prerecorded message.[16] The message stated: “Hello there, friend. You have reached the office of Medicare Mel. Thank you so much for calling. Please hold the line, and someone from The Hall Insurance Group will be with you in one moment.”[17] The defendant argued that the prerecorded message was simply a greeting, and not a call.[18] The Court was unpersuaded and found that the call, because it began with a prerecorded voice, constituted the type of prerecorded call that is prohibited by the TCPA, unless the plaintiff provided his PEWC.[19]
- Plaintiff’s Consent
To demonstrate that the plaintiff provided his PEWC, the defendant explained how it obtained the leads, including plaintiff’s, and argued that the plaintiff provided his PEWC through a website the third-party lead generator used.[20] In response, the plaintiff simply denied that he ever entered his information into that website, thereby denying that he provided his PEWC through the website.[21] The defendant was unable to provide evidence that it was actually the plaintiff that entered his information into the website. The court found the plaintiff’s denial to be enough to create a factual dispute regarding whether the plaintiff provided his PEWC.[22] Thus, the court left PEWC issue for the jury to decide—consent is an affirmative defense that caller-defendants have to prove in TCPA cases.
Schwartz serves as a warning for relying on consent obtained by a third party when making prerecorded telemarketing calls. Not only can it be difficult, if not impossible, to obtain evidence demonstrating that the called party was actually the person who provided the contact information and consent, but a simple denial by the called party can be enough to get a TCPA claim in front of a jury. Schwartz is also a reminder that even a call that begins with a short, prerecorded greeting message can constitute the type of prerecorded call prohibited by the TCPA.
It is important to remember that the FCC has placed further restrictions on consent through its new one-to-one consent rule. That rule becomes effective on January 27, 2025 and you can read more about it here.
[1] Case No. 1:23-cv-374, 2024 U.S. Dist. LEXIS 175674 (S.D. Ohio Sept. 27, 2024).
[2] 47 U.S.C. § 227(b)(1)(A)(iii).
[3] 47 U.S.C. § 227(b)(1)(B).
[4] 47 C.F.R. § 64.1200(a)(2).
[5] 47 C.F.R. § 64.1200(f)(9).
[6] Id. at *1.
[7] Id. at *1-2.
[8] Id. at *5-6.
[9] Id. at *6.
[10] Id. at *8.
[11] Id.
[12] Facebook, Inc. v. Duguid, 592 U.S. 395 (2021).
[13] Id. at *14.
[14] Id. at *15-16.
[15] Id. at *17.
[16] Id. at *9.
[17] Id. at *17.
[18] Id. at *18.
[19] Id. at *22-23.
[20] Id. at *23-24.
[21] Id. at *24-25.
[22] Id. at *26.
