Pallone Proposes TCPA Amendments to Overrule Supreme Court
A recent proposal by Congressman Frank Pallone, Jr. (NJ-06) has stirred concern among some within our industry. On January 29, 2024, Pallone, Ranking Member of the Energy and Commerce Committee, which has jurisdiction over telecommunications policy, the Federal Communications Commission, and the Federal Trade Commission, introduced the Do Not Disturb Act
According to Pallone’s press release, the legislation is intended “to protect consumers from the bombardment of dangerous and unwanted calls and texts” and, to do so, Pallone’s Do Not Disturb Act would overule the Supreme Court’s decision in Facebook, Inc. v. Duguid, which Pallone asserts “undermined anti-robocall consumer protections.”
While we all agree on the need to combat scams and unwanted calls, this legislation raises serious questions about its potential to unfairly target legitimate businesses and the effort to overrule the recent Supreme Court decision in Facebook v. Duguid.
Facebook v. Duguid: A Balancing Act:
The Supreme Court's decision in Facebook v. Duguid clarified the definition of "autodialer" under the TCPA, ensuring it applied to technology used for mass, indiscriminate calls, not targeted, customer-consented communication. This established a crucial balance between protecting consumers from abusive robocalls and allowing legitimate businesses to operate responsibly. It also significantly limited the potential for abusive litigation that was clogging the courts as plaintiff’s attorneys used the TCPA’s statutory damages provision ($500/message if sent unlawfully) to bludgeon small businesses into paying settlements to avoid the costs and expenses of litigation.
Concerns with the Do Not Disturb Act:
Unfortunately, the Do Not Disturb Act risks tipping the scales too far. Its provisions, including expanded enforcement powers and consumer lawsuits, create an environment of uncertainty and potential liability for even the most compliant businesses. The bill eliminates the current defintion of “automatic telephone dialing system” that was interpreted by the Supreme Court and replaces it with a new and much broader definition of “robocall”:
“Robocall” is defined to include calls made and text messages sent (1) using equipment that makes calls or sends text messages to stored telephone numbers or telephone numbers generated by a random or sequential number generator, or (2) using an artificial or prerecorded voice or an artificially generated message, with limitations for calls and text messages sent using equipment that requires substantial human intervention.
While the Do Not Disturb Act significantly expands the scope of federal authority over automated phone calls and text messages, it does nothing to curb frivolous litigation that has caused considerable concern for business of all shapes and sizes. The bill also does not address the fact that many states have adopted so-called mini-TCPA statutes that already include broader definitions of automatic telephone dialing system in the period since the Supreme Court’s Facebook decision. Expanding the federal TCPA while those laws remain on the books will double the already considerable exposure that businesses face, creating more of a threat for law-abiding businesses to fall prey to scam litigation.
Moving Forward:
We urge Congressman Pallone and all policymakers to engage in open dialogue with industry representatives. Together, we can find solutions that address the true issues of scam robocalls without stifling legitimate business communication and jeopardizing important customer outreach. We believe in protecting consumers while simultaneously promoting responsible innovation and communication: a mutually beneficial outcome that requires collaboration, not legislation fueled by a one-sided narrative.
The EcMA believes that two reforms would help to balance Pallone’s Do Not Disturb Act:
Preemption: In exchange for expanded federal oversight over robocalls, the bill should expressly preempt state law in this area to avoid conflicting requirements and double exposure.
Class Action Damages Caps: In light of the significant concerns about the potential for damages awarded under the TCPA to violate Constitutional due process protections, Congres should consider putting a cap on class action damages. Congress has done this in numerous other statutory regimes that provide for statutory damages, including Section 130 of the Truth in Lending Act, which caps total liability in a class action at the lesser of $1 million or 1% of the defendant’s net worth, and the Fair Debt Collection Practices Act (FDCPA), where Congress capped the total amount of statutory damages that may be sought in a class action at the lesser of $500,000 or 1 percent of the debt collector’s net worth. 15 U.S.C. § 1692k(a)(2)(B).
Let your voice be heard! We would love to hear the perspective of our members and others in the ecommerce ecosystem. You can also contact your representatives and express your concerns about the potential impact of the Do Not Disturb Act on responsible businesses and its implications for the Supreme Court's decision.
Remember, a balanced approach is key to silencing the true culprits of robocall harassment while ensuring legitimate businesses can continue serving their customers effectively.
