FCC Declares that “Ringless Voicemails” are “Calls” that Require Consumer Consent to Avoid TCPA Liability

Author: Thomas Blatchley

On November 21, 2022, the Federal Communications Commission (FCC or Commission) issued a declaratory ruling finding that “ringless voicemails” to wireless telephones require consumer consent because they are “calls” made using an artificial or prerecorded voice, and thus are covered by the federal Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA). See FCC 22-85 (CG Dkt. No. 02-278) (Nov. 21, 2022). The FCC ruling is significant because it clarifies that delivery of a ringless voicemail is a form of a robocall covered by the TCPA, and is illegal if the caller did not have the consumer’s prior express consent.


The TCPA, which protects consumers from unwanted robocalls, prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.

On March 31, 2017, All About the Message, LLC (AATM) filed a petition with FCC seeking a declaration that ringless voicemail (e.g., delivery of a voicemail message directly to a consumer’s cell phone voicemail) is not subject to § 227(b)(1)(A)(iii) of the TCPA and therefore that AATM does not need consumer consent for the messages. AATM argued that its ringless voicemail message is not a “call” and that the TCPA should not apply, claiming that its proprietary software creates a landline session directly to the telephone company’s voicemail server without charge to the subscriber or appearing as a received call on a bill. AATM claimed that the ringless voicemail server, and the process by which the ringless voicemail is deposited on a carrier’s platform, is neither a call made to a mobile telephone number nor a call for which a consumer is charged and, therefore, is an unregulated service.

The FCC received over 8,000 comments and replies on the petition; almost all opposed it. On June 20, 2017, AATM filed a letter seeking withdrawal of the petition.1 Given the substantial attention from commenters, members of Congress, and the applicability of the TCPA to ringless voicemail technology, which has been the subject of considerable recent litigation,2 the FCC issued its declaratory ruling to resolve a controversy and remove uncertainly about ringless voicemail.


The FCC found that, based on its precedent, AATM’s ringless voicemail message is a call to a consumer’s wireless number and prerecorded voice messages sent via this technology are, therefore, subject to the TCPA. The FCC also found that AATM’s ringless voicemail constitutes a “call” subject to the TCPA’s protections for the same reasons the FCC found computer-generated text messages sent to a carrier’s text server to be calls under the TCPA.

In its analysis, the FCC found that the record supporting its conclusion that AATM’s ringless voicemail is identical in function to the Internet-to-phone testing the FCC in 2015 found subject to the TCPA. In the case of Internet-to-phone text messaging, the telephone number assigned to the consumer serves as a necessary and unique identifier. Similarly, the telephone number assigned to a consumer’s wireless phone and associated with the voicemail account is a necessary and unique identifier for the consumer in the ringless voicemail context. The FCC also found compelling the fact that the steps involved in sending ringless voicemail is substantially similar to the technology used, steps involved in, and software used to send text message en masse to cell subscribers. Notably, neither AATM nor any other commenter challenged the description of the technology used to deliver ringless voicemail messages or the assertion that it is essentially identical to the technology used to deliver Internet-to-phone text messages.

The FCC also stated that its finding is consistent with the ordinary meaning of “call.” Although the TCPA does not define “call,” courts have turned to dictionary definitions to determine its meaning. Webster’s Third New International Dictionary defines a call as “to communicate with or try to get into communication with a person by a telephone.” The FCC found that ringless voicemails meet this definition by directing the messages by means of wireless phone number and by depending on the transmission of a voicemail notification alert to the consumer’s phone (causing the consumer to retrieve the voicemail message).

The FCC also determined that its finding is consistent with the legislative history and purpose of the TCPA – eliminating illegal automated or prerecorded calls that are a nuisance and invasion of privacy. The FCC found ringless voicemails are unwanted messages the consumer has no control over and crowd potentially wanted messages out of the consumer’s voicemail capacity. Further, even when the consumer’s voicemail box is not full, consumers waste time listening to unwanted messages before deleting them because there is no mechanism for consumers to stop unwanted ringless voicemail calls before they reach the voicemail box. Consistent with such legislative history and purpose, the FCC concluded that Congress intended the TCPA to protect consumers from the nuisance and invasion of privacy caused by such artificial or prerecorded voice messages.

The FCC rejected AATM’s argument that ringless voicemail is not a TCPA call because it does not pass through consumers’ phone lines and that the TCPA protects only calls made directly to a wireless handset. The FCC also rejected AATM’s argument that ringless voicemail is non-intrusive since, among other things, consumers cannot block these messages, consumers experience an intrusion on their time and privacy being forced to spend time reviewing unwanted messages in order to delete them, and consumers must also content with their voicemail box filling with unwanted messages, which may prevent other callers from leaving important wanted messages.

The FCC also rejected the argument that the TCPA only applies when the consumer is charged. The FCC found that the restriction on autodialed or prerecorded calls to wireless numbers is separate from the restriction on calls to services where the call is charged. The FCC determined that ringless calls can also result in charges on retrieval of the message, including where minutes used for voicemail retrieval are deducted from a limited plan.

The FCC also rejected the notion that is ruling unnecessarily and improperly restricts political speech. The FCC found that ringless voicemail messages are “calls” subject to the TCPA, irrespective of content, and that this interpretation does not restrict any particular type of speech (putting aside that courts have found § 227(b)(1)(A)(iii) constitutional).

The FCC also found unpersuasive AATM’s argument that the Commission lacked the authority to regulate voicemail service at all because it is an enhanced service. The FCC concluded that AATM’s technology involves placing calls, not providing voicemail service.

Finally, the FCC disagreed with AATM that a Canadian regulator’s choice not to regulate voicemail broadcast for making telemarketing telecommunications should drive the FCC to conclude ringless voicemail is not subject to the TCPA. The FCC quickly dispatched this argument noting that another country’s construction of its laws does not bind the Commission’s interpretation of the TCPA.
1 At least two other entities filed similar petitions for declaratory rulings, which were withdrawn following significant opposition. Even though AATM withdrew its petition, the FCC chose to address the AATM petition because of its more detailed description of the technology at issue even though the other petitions raised the same legal question as AATM. Notably, the FCC stated that while its ruling is based on AATM’s petition and the record in that proceeding, “this Declaratory Ruling would apply to any entity that provides ringless voicemail using the end user’s mobile telephone number to direct the ringless voicemail to a mailbox associated with the end user’s mobile phone.” FCC 22-85 at 3, n.17.
2 See, e.g., Schaevitz v. Braman Hyundai, Inc., 437 F.Supp.3d 1237, 1249 (S.D. Fla. 2019) (the ringless voicemail, that is, a direct-to-voicemail message, is a “call” under the TCPA); Picton v. Greenway Chrysler-Jeep-Dodge, 2019 WL 2567971, at *2 (M.D. Fla June 21, 2019) (rejecting the argument that ringless voicemails are not subject to the TCPA); Gurzi v. Penn Credit Corp., 449 F.Supp.3d 1294, 1298 (M.D. Fla.) (direct-to-voicemail messages fall within the plain language of the TCPA); Grant v. Regal Automotive Group, 2020 WL 3250075, at *2 (M.D. Fla. Mar. 12, 2020) (“Several federal courts, including courts in this Circuit, have concluded that a ringless voicemail is a ‘call’ subject to the TCPA.”); Saunders v. Dyck O’Neal, Inc., 319 F.Supp.3d 907, 911 (W.D. Mich. 2018) (“Both the FCC and the courts have recognized that the scope of the TCPA naturally evolves in parallel with telecommunications technology as it evolves, e.g., with the advent of text messages and email-to-text messages, or, as we have here, new technology to get into a consumer’s voicemail box directly.”); Caplan v. Budget Van Lines, Inc., 2020 WL 4430966, at *4 (D. Nev. July 31, 2020) (ringless voicemail messages are still a nuisance delivered to the recipient’s phone by means of the phone number; they are calls as defined by the TCPA); see also Soppett v. Enhanced Recovery Co., LLC, 679 F.3d 637, 638 (7th Cir. 2012) “routing a call to voicemail counts as answering the call” and can violate the TCPA); Castro v. Green Tree Servicing, LLC, 959 F. Supp. 2d 698, 720 (S.D.N.Y. 2013) (holding that for purposes of TCPA liability, it is immaterial whether the calls were answered or went to voicemail).

Defendant Obtains Summary Judgment Against Serial Plaintiff in Heavily Litigated TCPA and MDTCPA Action

Author: Thomas Blatchley

In Worsham v. Discount Power, Inc., Civ. Action No. RDB-20-0008, 2022 WL 3100762 (D. Md. Aug. 4, 2022) (Bennett, J.), the United States District Court for the District of Maryland granted defendant’s motion for summary judgment and denied plaintiff’s cross-motion for summary judgment in an action wherein plaintiff asserted numerous violations of the federal Telephone Consumer Protection Act and Maryland Telephone Consumer Protection Act for alleged unwanted telemarketing calls.

Case Background

Plaintiff filed his original 17-count complaint in Maryland state court. After the case was removed to federal court, defendant successfully obtained dismissal without prejudice of plaintiff’s entire complaint for failure to state a claim. After plaintiff re-pled the complaint, Defendant again successfully obtained dismissal of 13 of the 17-counts, with prejudice, as well as plaintiff’s claims for treble damages and attorneys’ fees. During the pendency of the action, defendant also secured discovery sanctions against plaintiff, including the recovery of certain fees and costs, as well as an order precluding certain evidence.

Summary Judgment for Defendant

The parties filed cross-motions for summary judgment on the remaining four counts of the complaint alleging TCPA and MDTCPA violations for defendant’s alleged failure to (1) honor the National Do-Not-Call registry (Counts 1 and 5) and (2) provide telemarketer identifying information as required by FCC regulations. The district court ultimately found that defendant could not be held directly or vicariously liable for the numerous telemarketing calls since there was no evidence of any agency relationship between the defendant and its third-party telemarketing vendors, which the district court found were properly characterized as independent contractors. The district court found this distinction entitled the defendant to judgment on all counts as a matter of law.

The district court denied plaintiff’s motion for summary judgment, granted defendant’s summary judgment motion, entered judgment in favor of defendant as to all remaining counts, and closed the case.

Florida Supreme Court finds Workers’ Comp Law Does Not Bar Improper Debt Collections Action

Author: Melissa Manning

In Laboratory Corporation of America v. Davis, an injured employee attempted to bring an action under the Florida Consumer Collection Practices Act (FCCPA) claiming that providers had improperly billed her for medical treatment rather than her workers compensation carrier. She alleged that after she sought treatment for her injuries at two separate facilities, both improperly attempted to directly collect on the debt on multiple occasions. The trial court dismissed the claim for lack of subject matter jurisdiction holding that a provision of the Workers’ Compensation Law vested the Department of Financial Services with exclusive jurisdiction to decide any matters concerning reimbursement. The Appellate Court overturned the decision and the medical providers appealed to the Florida Supreme Court.

The Supreme Court drew a distinction between “matter concerning reimbursement” and a dispute alleging prohibited billing finding the former involves the relationship between the billing provider and insurance carrier while the latter involves the relationship between the provider and the injured worker. The Supreme Court concluded that the exclusive jurisdiction provision of the Workers Compensation Law does not extend to improper billing disputes between a provider and an injured worker. While a narrow decision, it is one to watch as the scope of debt collections actions continues to expand nationally.

Laboratory Corporation of America, et al v. Patty Davis, CASE NO.: SC19-1923 (Fla. Feb. 17, 2020)

Hunstein suit dismissed: Court finds no publicity = no harm

Author: Melissa Manning

A New York District Court has dismissed a Hunstein lawsuit for lack of standing, finding that plaintiff’s failure to plead an invasion of privacy was fatal to his claim. For followers of the Hunstein litigation saga, the facts are frustratingly familiar. In Weisz v. Sarma Collections, Inc., plaintiff alleged that defendant debt collector’s alleged disclosure of plaintiff’s personal information to a third-party vendor to send collection letters to plaintiff violated section 1692c(b) of the FDCPA. The relevant provision states, “a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”

In granting defendant’s motion to dismiss, the court rejected plaintiff’s argument that the mere disclosure of his private information to a third party is analogous to public disclosure of his private information and presents the same kind of harm as common law invasion of privacy. Notably, plaintiff did not allege that anyone at the letter vendor ever viewed his private information. Moreover, the transmission of plaintiff’s information to a letter vendor does not remotely rise to the level of disclosing plaintiff’s private information to the public at large.

Here’s to hoping common sense gains traction throughout the courts.

Weisz v. Sarma Collections, Inc. (S.D. N.Y. 21-CV-06230 April 20, 2022).

Wisconsin state court compels arbitration in class action alleging scheme to dupe consumers into sharing sensitive financial information.

Author: Avanti Bakane and Neha Dagley

Plaintiff alleged a national debt buyer offered her the option of seeking hardship such that she would not have to pay off her delinquent account. Plaintiff further alleged this option was presented to her not as a reprieve but as a scheme to obtain financial information from her such that defendant could evaluate whether to file a collection lawsuit against her.

To quickly shut down this opportunistic claim, the defendant moved to compel arbitration before discovery commenced. Seeking to keep her class claims alive, Plaintiff vigorously opposed this motion, going to lengths to argue the ambiguity of straightforward purchase documents.

Much like her thin theory of the case, Plaintiff’s position on the arbitration issue lacked merit. The Court agreed with the defendant and granted its motion to compel arbitration of Plaintiff’s claims. In doing so, Judge Pedro Colon of the Milwaukee County, Wisconsin state court adopted the defendant debt buyer’s position that the Purchase Agreement was unambiguous in its sale of everything pertaining to the Accounts, including the account agreements, to PRA. Relying upon In re: May 591 B.R. 712 (Bankr. E.D. Ark. 2018), the Court stated:

As in May . . . the Credit Card Agreement states “we may sell all or any rights or duties under this agreement or your accounts,” which includes the right to convey the right to arbitration because all means all. There is no indication that Synchrony intended to retain any of its rights or duties in the event of a sale.

The Court also found the discussion of cases distinguishing receivables from accounts irrelevant to this case, which only dealt with accounts. Finally, the Court emphasized the “all means all” rationale underlying its ruling as follows:

The Purchase Agreement, by its clear and express use of the word “all,” . . . makes clear the act of sale was intended to assign the entirety of the account, including the right to arbitrate, and not just the account receivables. The language of the Bill of Sale also makes clear Synchrony had no intention of retaining any of its ownership in the Account. It states that Synchrony “transfers, sells, conveys, grants, and delivers to [PRA], it successors and assigns . . . to the extent of its ownership, the Accounts” (Doc. 55, Ex. A). When Synchrony assigned ownership of the Account to PRA, the assignment included the right to enforce arbitration.

The ruling comes as a welcome victory for Gordon & Rees and the industry, particularly in light of the growing trend of plaintiffs avoiding Article III standing requirements and selecting state court forums to file class action cases with potentially high exposure.

Cyneisha Hankins v. Portfolio Recovery Associates, LLC, No. 2021CV005172 (Wis. Cir. April 1, 2022).

To dispute or not to dispute? That may be the question for Plaintiffs’ counsel, but courts nationwide continue to say ‘tis nobler to show true inaccuracy.

Author: Avanti Bakane, Neha Dagley, and Melissa Manning

Eastern District of Michigan court dismisses Credit Repair Lawyers of America’s non-dispute claims under the FCRA.

While Plaintiff freely admitted that in the past she disputed her accounts with the credit reporting agencies, she subsequently had a change of heart. As a result, Plaintiff took umbrage with the ‘account in dispute’ notation appearing on her credit reports. Instead of communicating her current lack of dispute directly to the furnishers, Plaintiff alleged she provided notice only to the CRAs. Importantly, any supporting documentation was wholly missing from Plaintiff’s amended complaint. When the notation was not removed, Plaintiff filed suit alleging that defendants furnishers and credit reporting agencies violated the FCRA with their inaccurate reporting.

In a succinct opinion, without holding any oral argument, District Judge Nancy G. Edmunds disposed of Plaintiff’s claims against multiple furnisher defendants, granting their motions to dismiss.

First, the Court found that Plaintiff’s failure to allege that she sent her non-dispute letter directly to furnisher PRA was fatal to her claims.

Further, the court found that Plaintiff’s bare bones and boilerplate recitation that her prior dispute notations were no longer accurate failed to meet the standard of pleading an FCRA claim, i.e. to claim a reasonable investigation was not performed, in the first instance, Plaintiff must establish a true inaccuracy:

Plaintiff simply makes the conclusory allegation that these “dispute” notations are inaccurate, without further identifying how so. “It is well settled that, regardless of the particular breach of the FCRA that is alleged, ‘a threshold showing of inaccuracy or incompleteness is necessary in order to succeed on a claim under § 1681s-2(b).’” Tillman v. Michigan First Credit Union, 2021 WL 1267583 (E.D. Mich. Apr. 5, 2021) (discussed on summary judgment)(citing Pittman v. Experian Information Solutions, Inc., 901 F.3d 619, 629 (6th Cir. 2018)).

In denying leave to amend as futile, the Court found that Plaintiff’s amended complaint suffered the same deficiencies as her original. Also, Plaintiff has had the benefit of the “growing body of case law that address the deficiencies of her claims.”

The ruling comes as a welcome victory for Gordon & Rees and the industry as this theory spreads, albeit now under the FDCPA.

Chandra Young v. Portfolio Recovery Associates, et al. (E.D. Mich. 21-10095 March 29, 2022).

Second Circuit Says No Standing for Alleged ADA Website Violation Where Plaintiff Had No Intention of Visiting Defendant’s Hotel

Author: Thomas Blatchley

On March 18, 2022, the Second Circuit affirmed the judgment of the district court and held that a disabled plaintiff’s lawsuit alleging an ADA violation because defendant’s website deprived him of the information required to make meaningful hotel choices for travel failed to allege an informational injury sufficient for Article III standing since plaintiff had no intention of visiting defendant’s hotel. See Harty v. West Point Realty, Inc., No. 20-2672-cv, 2022 WL 815685 (2d. Cir. Mar. 18, 2022). Plaintiff lacked standing because he failed to allege a concrete injury in fact. The decision is a significant victory for defendants facing ADA website violations, especially where plaintiffs troll hotel websites to manufacture ADA website claims when they have no intention to visit the subject property.

The background is straightforward. Plaintiff, a disabled person that uses a wheelchair and is a self-proclaimed “advocate [for] the rights of similarly situated disabled persons” and “tester” who monitors ADA website compliance, appealed from the judgment of the Southern District of New York, which dismissed his complaint against defendant for alleged regulation violations under the Americans with Disabilities Act or ADA. Plaintiff did not allege in his complaint that he visited defendant’s website with the intention of visiting defendant’s hotel. Instead, plaintiff alleged that he frequently visits hotel websites to determine whether those websites comply with the ADA regulations. Looking only to the allegations of plaintiff’s complaint, and not at an affidavit filed by plaintiff in support of his opposition to defendant’s motion to dismiss for lack of subject matter jurisdiction, the district court dismissed plaintiff’s claims for lack of standing due to plaintiff’s failure to allege a concrete injury in fact.

On appeal, the Second Circuit affirmed the dismissal, holding that: (1) plaintiff failed to allege a concrete injury in fact and thus lacked standing to assert his ADA claim; (2) the district court did not abuse its discretion by considering only the allegations in plaintiff’s complaint when deciding defendant’s motion to dismiss; and (3) the district court did not dismiss plaintiff’s complaint with prejudice.

As to the standing issue, the Second Circuit began its analysis by setting forth the long established standard for a plaintiff to establish Article III standing: (1) plaintiff must have an injury in fact; (2) that there is a causal connection between plaintiff’s injury and the conduct complained of; and (3) that plaintiff’s injury will be redressed by a favorable judicial decision. The Second Circuit then highlighted the Supreme Court’s recent clarification in TransUnion LLC v. Ramirez, 141 S.Ct. 2190 (2021) that a plaintiff has standing to bring a claim for monetary damages following a statutory violation only when plaintiff can show a current or past harm beyond the statutory violation itself. Notably, the Supreme Court rejected the standard articulated in Strubel v. Comenity Bank, 842 F. 3d 181, 190 (2d Cir 2016), which held that a plaintiff has standing to sue for a violation of a procedural right created by Congress if (i) “Congress conferred the procedural right to protect a plaintiff’s concrete interests” and (ii) “the procedural violation presents a risk of real harm to that concrete interest.” (internal quotation marks omitted). TransUnion now makes clear that in a suit damages, mere risk of future harm, standing alone, cannot qualify as a concrete harm. 141 S.Ct. at 2210-11.

Plaintiff alleged in his complaint that because defendant’s website did not comply with the ADA, the website infringed his wright to travel free from discrimination. The Second Circuit acknowledged, however, that plaintiff did not allege in his complaint that he was using the website to arrange for future travel. Instead, plaintiff acknowledged that his review of defendant’s website was done in his capacity as a “tester” of ADA compliance, not as a prospective traveler seeking a wheelchair-accessible hotel. Looking to TransUnion and recent Circuit Court decisions, the Second Circuit found that because plaintiff asserted no plans to visit the defendant hotel property (or surrounding area), he could not allege that his ability to travel was hampered by defendant’s website in a way that caused him a concrete harm. See TransUnion, 141 S.Ct. at 2205 (“Article III grants federal courts the power to redress harms that defendants cause plaintiffs, not a freewheeling power to hold defendants accountable for legal infractions.”) (internal quotation marks omitted). Thus, the Second Circuit found that plaintiff lacked standing to bring a suit for damages.

As to plaintiff’s requests for prospective relief, the Second Circuit held that while plaintiff alleged that “in the near future” he intended to “utilize the website to reserve a guest room,” that was not sufficiently imminent to create an injury in fact. In other words, such “some day” intentions, without any description of concrete plans, or even any specification of when the some day will be, do not support a finding of the actual and imminent injury required by Article III.

The Second Circuit also rejected plaintiff’s claim that defendant deprived him of the information required to make meaningful choices for travel, which plaintiff asserted as an “informational injury” for purposes of standing. The Second Circuit found that even assuming that plaintiff could allege that he was deprived of information to which he was entitled under the ADA, he still failed to allege downstream consequences from failing to receive the required information. Put another way, plaintiff failed to show that he had an interest is using the information beyond bringing the lawsuit. Thus, the Second Circuit held that plaintiff failed to allege an information injury sufficient for Article III standing.

Lastly, the Second Circuit rejected plaintiff’s claim that he suffered and would continue to suffer direct and indirect injury as a result of “the discriminatory conditions present at [defendant’s] website.” The Second Circuit found that plaintiff’s complaint did not specify how defendant’s website violated the ADA regulations or how those alleged violations discriminated against disabled people. The Second Circuit also found that plaintiff’s complaint contained a boilerplate assertion that defendant failed to comply with the ADA regulations, and that TransUnion makes clear that a statutory violation alone, however labeled by Congress, is not sufficient for Article III standing.

It Was a Reasonable Investigation Just See the Police Officer’s Comment

Author: Lori Quinn

Anyone who has been met with a Fair Credit Reporting Act against furnisher of credit information case knows that it turns on the “reasonableness” of the investigation. After a parade of letters and disputes concerning a debt for a one-way plane ticket purchased on a credit card that Woods claimed was the result of identity theft – a claim rejected by the original creditor validated and, in turn, LVNV’s collection agent Resurgent validated the debt, Wood obtained a police report. The extensive record of letters, disputes and, critically, an Automated Consumer Dispute Verification (“ACDV”), which included a copy of the police report noting that the original creditor validated the account were analyzed by the Court.

Woods sued Resurgent and LVNV for violations of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The District Court granted defendants’ motion for summary judgment and Woods appealed. In Woods v LVNV Funding, LLC, No. 21-1981, 2022 WL 594277 (7th Cir. Feb. 28, 2022), the 7th Circuit affirmed the District Court’s granting LVNV and Resurgent’s motion for summary judgment. Woods argued that Resurgent’s investigation of the dispute could have gone further, and that, as a result, the investigation was not “reasonable”. Woods suggests that a reasonable investigation would have included subpoenaing the airline to identify the person who took the flight to track down the identity thief or confirm the validity of the debt. In other words, Woods argued that defendants’ investigation was not reasonable because it was not exhaustive. The 7th Circuit found this to be outside Congress’ intent stating that it was “…implausible that Congress, in drafting a consumer protection statute like the FDCPA, would have sent consumers on such a wild goose chase.”

In a classic rejection of the FCRA requiring a “perfect” investigation, the 7th Circuit confirmed Section 1681-s(2)(b) requires only a reasonable investigation dependent on the nature of the dispute. The 7th Circuit noted that, even though the notice of a dispute (the ACDV), included a police report, the report advised that the investigating officer noted that the creditor concluded that the debt was not the result of identity theft or fraud. Therefore, Resurgent was within its rights to rely on those representations in the ACDV. Ultimately, Resurgent’s issuance of similar letters to Woods, concluding that Woods was responsible for the debt and Resurgent’s repeated (and unanswered) requests for Woods to provide information to assist in its investigation, was part and parcel of a reasonable investigation. Be warned, however, the 7th Circuit concluded their opinion but stating this decision provides “no license for furnishers to offload their § 1681s-2(b)(1)(A) investigation obligations to consumers by spamming them with request for additional information.”

Finally, Woods argued that Resurgent’s letters were false representations or a deceptive means to collect a debt because the original creditor later found he did not owe the debt. The 7th Circuit was unconvinced, noting there is a difference between “literal falsity” and “false” under the 1692e of the FDCPA. The 7th Circuit found that “a statement isn’t false unless it would confuse the unsophisticated consumer and that Woods’ appeal is based on the applicable statutory language in 1692e”. Despite the strict liability of the FDCPA, Woods failed to explain why Resurgent’s letters were materially false.

Faulty service? Default judgment? Garnishment? No harm, no foul.

Author: Avanti Bakane

Eastern District of Michigan court finds lack of Article III standing where plaintiffs alleged faulty service, wrongful default judgments, and garnishments issued as a result.

Plaintiffs were the targets of collection lawsuits filed by the defendant law firm and its various collection lawyers. In their federal lawsuit against defendants, plaintiffs pursued FDCPA claims, alleging that the lawyers falsely attested to proofs of service of the lawsuits upon them such that default judgments were then entered against them. What’s more, plaintiffs set forth that defendants issued garnishments pursuant to those judgments, and “[t]he garnishees withheld money” due to Plaintiffs. 

Pretty wild, right? Of course, you’re wondering whether the plaintiffs were in fact, the correct debtors of the outstanding accounts. Well, the court grasped on to this as well. 

In a succinct nine-page ruling, without holding any argument, the United States District Court for the Eastern District of Michigan disposed of plaintiffs’ claims, granting defendants’ motion to dismiss based upon lack of Article III standing and denying each of plaintiffs’ amended motion for class certification, motion to stay, and motion to limit communication as moot.

In doing so, the court found that plaintiffs’ argument that they sustained damages in the form of reputational harm, deprivation of due process, and monetary loss was not supported by their complaint allegations, which only made “a general reference to ’emotional’ and ‘general’ damages.” Further,  plaintiffs failed to allege that they did not owe these accounts or otherwise explain how the default judgments were defamatory, thus, negating any argument that defendants harmed plaintiffs’ reputation in conveying falsities regarding private financial information to third parties.

The court then visited the argument that by way of faulty proofs of service, plaintiffs were deprived of their right to notice and the opportunity to be heard, such that they were unable to challenge the collection actions. Here, the court again found plaintiffs’ complaint devoid of any such allegations. Interestingly, the court held, “And state court records show the Kline Plaintiffs have set aside the default judgments entered against them and Plaintiff Byrd does not assert she is unable to do so. Thus, at best, this is a risk of harm argument that is insufficient to establish concrete harm under Ramirez.”

Finally, as to any allegations of monetary loss, the general allegations that “garnishees withheld money” from plaintiffs were insufficient to establish concrete harm, particularly where with respect to each plaintiff, funds were either released, returned (prior to plaintiffs filing their federal lawsuit), or never held. 

In disposing of plaintiffs’ complaint without prejudice, the court noted that other courts have rejected the argument that the cost of hiring an attorney to defend a state collection action is sufficient to satisfy the injury-in-fact requirement. 

As to any opportunity to amend, the court disallowed this because plaintiffs had not filed any motion to amend nor attach a copy of a proposed amended complaint to their response to motion to dismiss. 

We have all not only seen our clients sued for (much) less but also – perhaps due to optics – on the hook for damages and fees in such situations. The court took a hard stance here, requiring the complaint to address injury, harm, and damages with specificity, and where it did not, finding it deficient as to standing. Plaintiffs’ failure to amend their complaint put the nail in the coffin in a suit we would otherwise expect to generate traction, particularly, where the underlying conduct had accompanying criminal charges.  

Kline, et al. v. Fishman Group, et al. (E.D. Mich. 2:21-11272 Feb. 28, 2022).

TCPA Family Feud – Survey Says: Second Circuit Rejects Third Circuit and Holds that a Faxed Invitation to Participate in a Market Research Survey in Exchange for Money Does Not Constitute an “Advertisement” Under the TCPA

Author: Thomas Blatchley

The Second Circuit recently affirmed a District Court dismissal, holding as a matter of first impression that an unsolicited faxed invitation to participate in a market research survey in exchange for money does not constitute an “unsolicited advertisement” under the Telephone Consumer Protection Act. See Bruce Katz, M.D., P.C. v. Focus Forward, LLC, 22 F.4th 368 (2d Cir. 2022). Looking to the statutory text, legislative history and FCC implementation, the Second Circuit rejected a recent Third Circuit decision and found that invitations to participate in a survey, without more, are not advertisements under the TCPA.

Plaintiff’s Complaint alleged that that on or about September 12, 2019, and October 25, 2019, Defendant sent Plaintiff two unsolicited faxes seeking participants in market research surveys, in violation of the TCPA, as amended by the Junk Fax Prevention Act. Both faxes explained that Defendant was “currently conducting a market research study and “offer[ed] an honorarium of $150 for [the recipient’s] participation in a . . . telephonic interview.” Plaintiff filed a putative class action alleging violations of the TCPA, seeking both injunctive relief and statutory damages. Defendant filed a Rule 12(b)(6) motion to dismiss, arguing that an unsolicited faxed invitation to participate in a market research survey does not constitute an “unsolicited advertisement under the TCPA. The District Court agreed and granted the motion to dismiss.

The TCPA, as amended by the JFPA, prohibits the use of “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” An “unsolicited advertisement” is defined by the statute as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” Additionally, in 2006 the FCC promulgated a rule that construes the TCPA specifically proscribing any faxed surveys “that serve as a pretext to an advertisement,” which the Second Circuit previously considered in Physician’s Healthsource, Inc. v. Boehringer Ingelheim Pharmaceuticals, Inc., 847 F.3d 92, 96 (2d Cir. 2017) (held that an unsolicited fax promoting a free event could serve as a pretext for an advertisement, but only where the event had a “commercial nexus to a firm’s business, i.e., its property, products or services.”).

This appeal, as a matter of first impression, centered on the interpretation of what constitutes an “unsolicited advertisement” under the TCPA. Specifically, whether a fax inviting the recipient to take a survey in exchange for money constitutes an “advertisement” under the TCPA.

The Second Circuit began its analysis by recognizing that a split panel of the Third Circuit recently held in Fischbein v. Olson Research Group, 959 F.3d 559 (3d Cir. 2020) that such faxes are advertisements, reasoning that “an offer of payment in exchange for participation in a market survey is a commercial transaction, so a fax highlighting the availability of that transaction is an advertisement under the TCPA.” Not surprisingly, the plaintiff urged the Second Circuit to adopt Fischbein’s reasoning and conclusion. The defendant (and the District Court) relied on multiple district court decisions holding the opposite. Those decisions essentially concluded that mere invitations to participate in a survey, without more to render them a pretext for advertising, should not themselves be viewed as prohibited advertisements under the TCPA.

The Second Circuit agreed with the District Court that the subject faxes were not facially “advertisements” under the TCPA. Looking to the plain language of the TCPA, specifically the meaning of “unsolicited advertisement” (see definition above), the Court found that faxes seeking a recipient’s participation in a survey plainly do not advertise the commercial availability or qualify of any property, goods or services, and therefore cannot be “advertisements” under the TCPA. Notably, the Second Circuit disagreed with the majority opinion in Fischbein on whether the faxes could be construed as advertising the availability of a service. The Second Circuit, rejecting the Third Circuit interpretation, found that the TCPA neither prohibits communications advertising the availability of an opportunity nor does it prohibit communications advertising communications advertising the availability of transactions that are commercial in character. The TCPA simply prohibits communications advertising the “availability . . . of any property, goods or services.” Finally, the Second Circuit found that the legislative history of the TCPA and the FCC’s implementation of that law supported the defendant’s position that the faxes are not advertisements.

In summary, the Second Circuit held that a faxed invitation to participate in a market research survey in exchange for money does not constitute an “advertisement” under the TCPA. The decision is a significant victory for TCPA fax defendants, at least in the Second Circuit, and sets the stage for a continued Circuit split.