Annoyed by what they believe is an onslaught of unsolicited telemarketer calls, consumers have increasingly been fighting back over the past few years by bringing class actions against companies under the Telephone Consumer Protection Act (TCPA). As a result, some Am Law firms have begun to market their expertise in the area, including at least two that have created practice groups dedicated to the defense against TCPA consumer class actions.
Locke Lord and Reed Smith have both launched such practice groups this year. And though Chicago-based financial services litigator Henry Pietrkowski—one of the leaders of Reed Smith's TCPA group—says he and other Reed Smith attorneys have been doing work related to the act for several years, what he describes as the recent "explosion of cases" convinced firm leaders that the creation of a formal practice group was warranted. Reed Smith's website now lists more than 35 attorneys who are a part of the firm's TCPA group.
Thomas Cunningham—the leader of Locke Lord's class actions practice group, which includes the newly formed 19-lawyer TCPA section—agrees that such cases are the latest to dominate a consumer class action category that tends to be cyclical. "You see a certain kind of case or a certain statute that plaintiffs lawyers sort of fall in love with, and the latest darling of the plaintiffs' class action bar is the TCPA," Cunningham says.
The statute itself dates to 1991 and was enacted to give consumers a reprieve from overzealous telemarketers—particularly those employing automatic telephone dialers. The point is to prevent consumer companies from making unsolicited phone calls or sending faxes to any consumer with whom the company has no prior business relationship or who has specifically requested to be placed on a so-called Do Not Call list.
Martin Jaszczuk, who heads Locke Lord's TCPA class action practice section, says early litigation in the area mostly involved unwanted faxes. As technology evolved, he says, the work "began to include cellphones, and now the hottest area is text messages." (In 2009 the U.S. Court of Appeals for the Ninth Circuit found that text messages sent to consumers by companies and advertisers fall into the same category as phone calls and are therefore covered by the TCPA.)
According to WebRecon, an online tracker of litigation data, the number of TCPA–related claims filed in 2012 increased 34 percent compared to the previous year and was more than triple the number brought in 2010. Cunningham attributes the uptick to plaintiffs counsel and their clients seeing TCPA cases as "relatively easy money." The draw for the lawyers bringing the case, he says, is that there is no real cap on damages in such suits, meaning class actions can seek big money and result in major settlements.
Each TCPA violation—each individual text message, fax, or call—can result in damages from $500 to $1,500, and there is no limit on the number of alleged violations that can be included in an individual suit. Cunningham says it is "very rare" to see a TCPA case that involves fewer than 10,000 alleged violations and not uncommon to see that number climb into the tens of millions. Once the alleged violations are collected, the class claim is relatively simple for plaintiffs lawyers to plead, Cunningham says: If a client gets a call, text, or call that they did not agree to receive, then it is likely a claim will survive a motion to dismiss. "As long as the plaintiffs can get a claim past the summary judgment phase, that's going to force a large settlement," Cunningham says.
Scott Owens, a Hallandale, Florida–based attorney who focuses on TCPA and other consumer protection–related suits, agrees that the number of class actions filed under the TCPA has been on the rise in recent years, as more attorneys become aware of the statute and its guidelines. The lack of a cap on potential damages, he says, is indeed another likely reason for the spike. At the same time, he adds that the ability to stack violations of the act in each class action suit also makes the TCPA more effective at curbing illegal behavior by creating a substantial risk for companies that violate the statute. "I've seen people curb their behavior merely on the basis that they were served with a lawsuit," he says. "And that speaks volumes for the effectiveness of the TCPA."
