Overview
Steptoe telemarketing litigation partner new guy Dan Blynn here with a recent state telemarketing law development out of Maryland—and it’s not a good one. Specifically, in mid-January 2023, Maryland Senate Bill 90, entitled the "Stop the Spam Calls Act of 2023," was introduced. A hearing was held on the bill in the state Senate Finance Committee just last week, on February 1, 2023. While laudable in its aim, like Florida’s and other states' recent telemarketing law amendments before it, the bill only serves to inject ambiguity and raise questions regarding what is prohibited. If passed, the Stop the Spam Calls Act of 2023 will help feather the nests (more) of the plaintiffs’ class action bar without offering meaningful relief to Maryland residents.
Among other things, the bill prohibits the making (or causing to be made) of a "telephone solicitation" using "an automated system for the selection or dialing of telephone numbers" without the “prior express written consent” of the "called party." Although "telephone solicitation," "prior express written consent," and "called party" are defined terms, "automated system for the selection or dialing of telephone numbers" is not. And therein lies just one of the many problems with the proposed legislation.
Careful readers will note the pesky "or" in the bill's autodialer prohibition whereas the federal Telephone Consumer Protection Act’s (TCPA) definition of an “automatic telephone dialing system” uses an “and.” 27 U.S.C. § 227(a). That small difference could mean that using a system that selects numbers from a cultivated database, even if those numbers are subsequently dialed manually, one-by-one by a live human using a rotary phone, might still be a potential violation of the Maryland law. Put simply: what will constitute an autodialer under the Stop the Spam Calls Act? Responsible telemarketers need clear legislative guidance to ensure that they don't inadvertently violate the law. If they don’t receive it, it’s almost guaranteed that Maryland courts will be flooded with class actions alleging violations of the Act. Indeed, we’re seeing that play out about 900 miles to the south in Florida.
In mid-2021, Florida amended its Florida Telephone Solicitation Act (FTSA) to allow for private enforcement of the state’s verbatim autodialer provision. Literally hundreds of putative class actions later—I have been tracking nearly 400 such cases, and have litigated scores of them myself—courts and regulators are no closer to providing any guidance or insight into what constitutes an "automated system for the selection or dialing of telephone numbers." Many of these FTSA cases have settled on individual bases with substantial bounties paid to the plaintiffs’ attorneys rather than risk bankrupting aggregated statutory damages awards. A few defendants have entered into class settlements, but the take rates are low (in at least one instance, below one percent) and consumers—the very people who the FTSA is designed to protect—typically receive only enough money to cover about the cost of a tank of gas.
But, back to Maryland. Beyond the prohibition on unsolicited, autodialed telephone solicitations, there are several other key provisions of which industry should be aware, such as:
- Telemarketers cannot deliver prerecorded messages without the prior express written consent of the recipient.
- Telemarketers must transmit their telephone number and, when available, name on the recipient’s caller ID.
- The intentional alteration of the caller’s voice for purposes of defrauding the recipient is prohibited.
- Telemarketing calls and text messages may be placed/sent only between the hours of 8:00 a.m. and 8:00 p.m. in the recipient’s time zone.
- Telemarketers may not place more than three calls or send more than three text messages to the same called party during a 24-hour period based on the same subject matter.
- Call spoofing is not permitted.
- There is a rebuttable presumption that a telephone solicitation made to a phone number with a Maryland area code is made to a "resident or person in the state at the time the call is made." (Of course, the definition of "telephone solicitation" is limited to communications "with residents of Maryland" hard stop. Thus, it is not clear the import of the rebuttable presumption’s reference to "person[s] in the state" as well as "residents.")
It also bears noting that "telephone solicitation" is defined explicitly to have the same meaning as in Section 8-205 of the Maryland Public Utilities Article, i.e., "an organized activity, program, or campaign to communicate by telephone with residents of Maryland” in order to” sell or attempt to sell, lease, or rent "goods or services" broadly, not just the "consumer goods or services" to which other Maryland consumer protection statutes are targeted. Yet another issue that could use clarification or more thought by the Maryland legislators.
A violation of the Stop the Spam Calls Act of 2023 constitutes a violation of the state’s Consumer Protection Act. If it passes, the Act will go into effect on October 1, 2023.
Maryland is just the latest state to propose or pass telemarketing legislation. Florida, Oklahoma, Washington, New York, Michigan, and others are doing or have done so within the past two years as well. This patchwork of state laws layered on top of the federal TCPA's requirements can be a compliance minefield for any company that engages with current customers or would-be customers by phone. Proactively investing in an ounce of telemarketing compliance now can save a telemarketer a pound (or billion) later. Regardless, we’ll have to wait to see whether and how the Stop the Spam Calls Act of 2023 is amended as it works its way through the Maryland General Assembly, but it may not be the worst time to call your lobbyists and ask them to make the rounds in Annapolis.
