Out With The Old, In With The New: Archduke’s 2021 TCPA Predictions

Welcome to 2021, TCPAWorld. May it be slightly less terrible than 2020. And on that note, here are my predictions for the TCPA and calling regulations in 2021.

1) Increase in state law claims.

Up until the past year, the major players in the TCPA plaintiff’s bar eschewed state statutes for nationwide class actions filed solely under the TCPA. The reason for doing so is simple. They leveraged the prospect of large, nationwide class actions to extract million dollar settlements for even the most specious of violations. The SPB class action defense team has a well-documented history of beating such actions, but far too many defense teams caved and simply paid to make the cases go away. So it was rational for even the most sophisticated plaintiff’s firms to turn out TCPA class action after TCPA class action, with nary a mention of state law.

That began to change in the last few years in circuits that rejected Marks and required a random or sequential number generator. In these circuits, plaintiff’s attorneys began bringing state-specific classes and subclasses under state ADAD and telemarketing statutes that do not have random or sequential number generation requirements. State statutes tend to have different elements of proof than the TCPA, which can make it more difficult to sustain a class, but many have two potential pitfalls: significantly greater damages and fee-shifting provisions. With these two pitfalls, plaintiff attorneys can make up for smaller class size through the prospect of higher damage awards – in some cases as high as $15,000 per call – and the prospect of attorneys’ fees awards.

I expect that this trend towards greater focus on state law claims will continue even if the Supreme Court comes out of left field and affirms Marks in Duguid, for the reasons in my next prediction.

 

2) Continued federal court hostility to no-injury class actions.

The Czar touched on this in his post about the Supreme Court’s recent grant of certiorari in an FCRA case, but it looks like Spokeo finally has teeth in the TCPA context. That is, courts – primarily in the Eleventh Circuit – have started systematically dismissing TCPA class actions where neither the plaintiff nor putative class members suffered in real injury.

I anticipate that this trend will continue and will spread beyond the Eleventh Circuit. Federal courts were already busy. And the Covid-19 pandemic has caused significant backlogs in courts throughout the country. Civil cases in general are often taking a back seat as courts focus on criminal cases that have constitutional and statutory speedy trial requirements. I suspect that they will have little patience for cases were the only “injury” is annoyance or receiving a few unwanted texts or phone calls. As the Czar pointed out, the Eleventh Circuit has been aggressive in turning back no-injury TCPA cases, and I suspect courts in other circuits will start following suit.

 

3) Continued federal and state enforcement activity for actual fraudulent calls.

 Although the TCPA and its implementing regulations are filled with ticky-tack requirements, federal enforcement authorities, both at the DOJ and administrative agencies, have to prioritize where they focus their resources. So it is no surprise that they focus on calling campaigns that involve actual fraud and real consumer harm, rather than ticky-tack “violations” for otherwise legitimate calls. For example, federal agencies are much more likely to target a company peddling a pyramid scheme than one with a 3.2% abandoned call rate. Entering the new year, we expect that this trend will continue, with a particular emphasis on Covid-19-related fraud.

We anticipate that the same trend will continue at the state level. State agencies obviously have more resource constraints than federal agencies, and therefore have to do an even greater job of prioritizing enforcement resources on true bad actors. This reality is likely to be starker in 2021, where the full effects of the pandemic on state budgets will be felt.

 

4) Binding agency deference will become archaic.

 Many commentators were surprised by how little deference was given to federal agencies as PDR Networks worked its way through appellate courts (including the Supreme Court, and back down to the Fourth Circuit). I wasn’t. I’ve been saying for the past 10 years that agency deference – even the entrenched Chevron deference – are in real danger of suffering a death by a thousand wounds. Now, I’m even more bullish on this view than I was even three years ago. Rather than suffering a death by a thousand cuts, I believe it’s at least possible that agency deference will be killed or neutered by one or two judicial bombs.

I became more bullish on this position because I no longer believe that Chief Justice Roberts is the swing vote on this issue. Instead I think it’s Kavanaugh. I always felt that even if Roberts had doctrinal misgivings about agency deference, he would be reluctant to allow a sweeping decision walking back decades of precedent. With the current makeup of the Court, however, I believe such an opinion is significantly more likely, with Roberts either dissenting or concurring. If Kavanaugh is willing to sign onto a broad opinion dispensing with agency deference as we know it, I see it as a very real possibility.

This is my most controversial prediction, and I might look like an idiot 12 months from now, but it’s certainly how federal courts are trending.

 

5) At least one major state will look seriously at banning telemarketing calls.

 I don’t think it will actually happen in 2021, but I do think this is the year where outright bans on telemarketing calls will start to gain traction in state legislatures. We’ve been warning about this dangerous undercurrent for a few years, and heard first hand from a state senator in Colorado that they are considering the issue. Thus far, outright bans have only been discussed informally, or through fringe proposals that did not gain real traction. And although I do not think any outright bans will actually be signed into law in 2021, I do anticipate that they will gain more mainstream consideration at the state level. You’ll want to keep an eye out for these, and get out ahead of the proposals.

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