Overview
Whenever we can tie the Telephone Consumer Protection Act (TCPA) to a Justin Bieber song, you know that we will, especially one as catchy as "Stay" (Cannon's words, not Dan's). Any company that engages with consumers over the phone, whether that be by call or text message, should be aware of the TCPA and its myriad compliance requirements. Some believe that, with the Supreme Court's 2021 Facebook, Inc. v. Duguid decision, which narrowly construed what constitutes an “automatic telephone dialing system," i.e., an autodialer, TCPA cases no longer are being filed. Quite the opposite. TCPA complaints still continue to pour in against many well-intentioned companies. The plaintiffs' bar, however, has pivoted away from autodialer claims to do not call allegations, i.e., that plaintiffs received telemarketing calls or marketing text messages on their cell phones while their numbers were listed on the National Do Not Call Registry, or after they had requested that a specific company stop placing such calls or sending such text messages. In either case, one of the core liability issues is whether or not a cell phone number is a “residential” one for purposes of the TCPA's do not call rules. The answer is important because, if a cell phone is not residential, then a do not call claim fails.
To set the stage, different sections of the TCPA expressly treat communications to cellular and residential telephones differently. Section 227(c)(5), the TCPA's do not call provision, governs only violations of the FCC's regulations promulgated to "protect residential telephone subscribers' privacy rights to avoid receiving telephone solicitations to which they object." The Federal Communications Commission (FCC), in turn, implemented certain regulations related to the statute’s do not call provisions, such as establishing the National Do Not Call Registry on which consumers could place their residential telephone numbers, and regulations that require telemarketers to honor consumers' entity-specific do not call requests. These entity-specific do not call regulations prohibit telemarketing calls to "[a] residential telephone subscriber" who has requested that marketing telecommunications from a specific company stop. Many courts have held that a cell phone is not a "residential" line under the TCPA. But others have reached the opposite conclusion based largely on a 2003 FCC order in which the agency interpreted the TCPA such that cell phones can be "residential" telephone lines for purposes of the do not call rules depending on the facts. Those courts have held that, under the Hobbs Act, they are bound by the FCC's conclusion. The case-by-case nature of the inquiry can make obtaining dismissal or an early summary judgment ruling difficult. Courts generally want discovery, and plaintiffs know that the litigation economics are such that the high and asymmetric discovery costs typically borne by putative class action defendants can be leveraged into high-dollar settlements of even baseless or meritless claims.
So, what is a TCPA class action defendant to do? Well, the answer may lie in a recent under-the-radar paperless order issued by the Northern District of Georgia in October 2024. More specifically, in Loudermilk v. Maelys Cosmetics USA Inc., No. 1:24-cv-01866-AT, Paperless Order (N.D. Ga. Oct. 15, 2024), a do not call case arising out of text messages sent to a cell phone, the court sua sponte stayed the litigation pending resolution of the Supreme Court’s resolution of McLaughlin Chiropractic Assocs., Inc. v. McKesson Corp., No. 23-1226 (S. Ct.) and/or until the Eleventh Circuit addresses the petition for interlocutory appeal recently filed in Kendo Holdings, Inc. v. Radvansky, No. 24-90026 (11th Cir.). The issue in both McLaughlin and Kendo Holdings is whether the Hobbs Act requires a district court to blindly accept and rigidly apply the FCC's interpretations of the TCPA, including the agency’s 2003 order concluding that cell phones can be residential under certain circumstances. The Loudermilk court recognized the potentially dispositive nature of the answer to that question, and, implicitly, the practical reality that judicial and party time and resources might be wasted, and that the court risks reaching a merits conclusion that is wrong as a matter of law if it allowed the case to proceed.
McLaughlin is set for oral argument in just under two months—January 21, 2025; the Kendo Holdings appellant seeks, among other things, to file a writ of certiorari to the Supreme Court to have that appeal reviewed in tandem with McLaughlin. The McLaughlin decision likely will be entered by early July 2025, in accordance with the Supreme Court’s customary practice of deciding cases within the same term that they are heard, which usually concludes in June or July each year.
Despite Bieber's refrain that "I told you I’d change, even when I knew I never could," courts can and should stay TCPA do not call cases pending McLaughlin and/or Kendo Holdings. And savvy defendants should be seeking such relief, for the Supreme Court may well give courts the ability to reach the conclusion that a cell phone cannot be a residential line under the TCPA's do not call rules—a "changed" outcome that courts previously might have found they could never reach.
