A recent decision by the United States Court of Appeals for the Seventh Circuit will likely have an impact on the entire telemarketing industry. The Court of Appeals reversed the ruling of an Indiana federal court relating to the potential liability of a company making non-commercial autodialed calls that complied with the Telephone Consumer Protection Act (“TCPA”), but not with the stricter state law equivalent.
The TCPA regulates unsolicited telemarketing calls, texts and faxes sent through use of autodialers and/or pre-recorded messages. The TCPA includes certain exceptions, such as calls made for non-commercial purposes. It also includes a “savings clause,” which expressly states that the TCPA does not preempt, or trump, state laws that impose stricter intrastate requirements on the use of autodialers and/or pre-recorded messages.
A non-profit company that uses autodialed calls to deliver non-commercial political messages to landline telephones just learned about the TCPA’s savings clause the hard way. It filed a complaint against the State of Indiana and its Attorney General seeking a declaration from the court that Indiana’s law that broadly bans (with very limited exceptions) the use of autodialed calls unless the called party has consented to them (including calls made for non-commercial, political purposes) is preempted by the TCPA (which permits non-commercial, political calls).
The lower court agreed with the plaintiff and held that the TCPA preempted Indiana’s statute as it applies to interstate calls made with the use of an autodialer. What this means is that because the call was being made across state lines (between Illinois and Indiana), the TCPA would govern the dispute and the non-commercial calls would not be prohibited. This makes sense, right? The TCPA’s savings clause appears to expressly address the states’ right to regulate intrastate activities, meaning those that occur purely within a respective state’s borders.
On appeal, the Court of Appeals disagreed. It held that because the TCPA is silent as to preempting laws that regulate the interstate use of autodialers, Indiana’s statute would not be preempted. In reaching its decision, the court looked at the express language of the TCPA and Congressional intent when the statute was enacted. It also referenced decisions in other jurisdictions, including New York and Utah, that held in a similar fashion.
Since so much is at stake here and liability is potentially very high (including possible treble damages, attorneys’ fees and penalties) considering plaintiff’s autodialing capability (delivery of 100,000 messages in a three hour period), this might be the perfect time for the plaintiff to ask the U.S. Supreme Court to decide the issue.
Courts are hesitant to disregard state laws that impose stricter requirements than that of the TCPA with respect to calls that many individuals consider harassing. As such, even if you are compliant with TCPA regulations and other applicable federal laws, you still may be open to liability if the state that you are autodialing into has more restrictive telemarketing laws. The only way to protect yourself and your company is to remain abreast of all relevant state and federal laws and to consult experienced counsel.
If you are interested in learning more about this topic or need to review your telemarketing practices, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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