KNOWING OR RECKLESS: Court Clarifies TCPA’s Treble Damage Standard in the Context of Faxes

Add a comment

Well yesterday was a ton of fun and an odd self-indulgence. But now it back to work.

Quick one for you for a Friday a.m. TCPAWorld, there is still a somewhat-ongoing debate as to the willfulness standard under the TCPA. As most folks know, the statute allows for treble damages where a TCPA violation occurs “knowingly or willfully” but what must a caller know or will to trigger the heightened damages?

The Plaintiff’s bar often argues that a caller need know or will solely that a call or fax is being made. The Defense bar, on the other hand, argues that only knowing or willing a violation of the TCPA triggers the statute.

So which side is right?

Well, according to the majority rule, neither, as True Health Chriopractic, Inc. v. McKesson Corp., 2022 WL 1239346 (N.D. Cal. April 27, 2022 shows.

In True Health the Court rejected the Plaintiff’s argument that merely being aware a fax is being sent can qualify a defendant for the ole treble damage treatment. That–in the court’s view–would render ever caller subject to punitive damages.

Instead, the court held “a plaintiff must show that a defendant knew or was reckless in not knowing that it was engaging in the conduct that violates the statute.”

In the context of sending a fax: “[i]t is not enough for a plaintiff to show that the defendant knew it was sending a fax. Instead, a plaintiff must show that the defendant knew or was reckless in not knowing that it was sending advertisements to a telephone facsimile machine and that the recipient had not given prior express consent.”

In the context of calls and texts this rule means a Defendant is not liable for treble damages unless it knew or was “reckless in not knowing” that it lacked consent to call or text a consumer.

I should note that in a TCPA class action the potential for treble damages is usually less an issue from a damages perspective–I mean $500.00 per is already sufficiently high to cripple most businesses when aggregated over millions of calls– and more of a problem in terms of the discovery it enables. Under the guise of “proving willfulness” a plaintiff may seek huge volumes of correspondence between agents, employees, and even with third-party vendors hunting for the slightest hint of “knowledge” that illegal calls were being made.

Just another fun twist here in TCPAWorld. We’ll keep an eye on the willfulness standard, as with everything else around here.

Categories:

Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

Leave a Reply