Monday, November 30, 2020

Noteworthy Consent-Based TCPA Win for Lead Generators

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Richard B. Newmanhttp://www.hinchnewman.com
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

Volkswagen launched a marketing campaign.  It paid dealerships nationwide to retain a third party to place service reminder calls to their customers.  Automated technologies were purportedly used to make calls to plaintiff without consent.

The Central District of California decertified a class of these TCPA plaintiffs because consent issues were so individualized that the plaintiffs could not satisfy the predominance requirement. Trenz v. On-Line Administrators, Inc., No. 15-8356, 2020 WL 5823565 (C.D. Cal. Aug. 10, 2020). 

In order for a class to be certified by a court, there is a requirement that common issues of law and fact must “predominate” over individual issues.  There is no single test to determine when the “predominance” standard is met.  Different courts have created different tests and standards for determining when certification is appropriate.  For example, some decisions have followed the historical standard that the predominance requirement is met if the common question is at the heart of the litigation.  In using the “predominance” analysis to bar class certification, courts often focus on whether the class will promote efficiency and judicial economy.

Here, after a class was certified, the court found that the defendants would need to produce “significantly more” evidence to show that customers had provided “actual consent to be contact by an autodialer” such that “individualized inquiries actually predominated over the common questions.” 

The defendants moved to decertify and argued that that they had developed the “requisite . . . evidence of consent” that the court’s certification order had found lacking.  The defendants alleged that certification was improper because records obtained from a handful of the dealerships showed “a variety of circumstances across the class bearing on whether individual class members consented to receiving phone calls under the program.

The defendants then argued that the individual transactional context in which the class member’s phone number was provided and whether they consented under the TCPA, would vary  depending on whether the class member: (i) would reasonably expect to be contacted about future servicing of their vehicle; (ii) was provided with varying disclosure forms with notice regarding use of contact information; and (iii) was provided with additional, varying privacy notices and contracts wherein the class member consented to being contacted about future vehicle servicing, for ‘marketing’ purposes, and for the sale of additional products and services. 

Finally, the defendants argued that due to the foregoing, the consent issue would have to be litigated “on a class member-by-class member basis, meaning that individual questions predominate.” 

The court agreed with the defendants and decertified the class.

It held that “the necessity of individual inquiries is a clear bar to class certification in TCPA matters.”

The court concluded that the defendants correctly identified factual circumstances relevant to “whether any individual [c]lass [m]ember provided consent . . . and if they did, the scope of that consent.” 

It also noted that the plaintiffs could not establish predominance because of the ‘“nearly endless’ permutations of the transactional contexts” under which consumers had “provided prior express consent to the receipt of … calls.” 

Takeaway:  The case should be of interest to online lead generators because, here, the defendant defeated certification by showing that class members provided their numbers in different “transactional contexts.”  This resulted in individualized issues regarding the existence and scope of consent.  Arguably, seemingly minor, subtle differences in the provision of a telephone number could potentially give rise to individualized issues regarding the existence and scope of consent.

Richard B. Newman is a TCPA defense attorney at Hinch Newman LLP. Follow him on Twitter @ FTC defense attorney

Informational purposes only. Not legal advice. May be considered attorney advertising.

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