Justia Communications Law Opinion SummariesArticles Posted in Consumer Law
Northstar Wireless, LLC v. FCC
Petitioners, Northstar Wireless, LLC (“Northstar”), and SNR Wireless LicenseCo, LLC (“SNR”) placed more than $13 billion in winning bids at a Federal Communications Commission (“Commission”) auction to license wireless spectrum. The Commission determined that neither company was eligible for the very-small-business discount because both were de facto controlled by their biggest investor, the large telecommunications company DISH Network Corporation (“DISH”). Northstar and SNR (collectively, “Companies”) petitioned for a review of that decision. Northstar and SNR have again sought our review, contending that the Commission flouted this court’s orders in SNR Wireless by not working closely enough with them to reduce DISH’s control, wrongfully found them to be controlled by DISH, and penalized them without fair notice. The DC Circuit rejected the Companies’ challenges to the Commission’s orders. The court held that the Commission complied with the court’s previous decision by affording the Companies an opportunity to cure. The Commission also reasonably applied its precedent to the Companies and gave them fair notice of the legal standards that it would apply in analyzing their claims to be very small companies. View "Northstar Wireless, LLC v. FCC" on Justia Law
Spectrum Northeast, LLC v. Frey
The First Circuit held that a Maine statute requiring cable operators to grant subscribers pro rata credits or rebates for the days remaining in the billing period after the termination of cable service is not preempted by the Cable Communications Act of 1984 (Cable Act).The Cable Act preempts stat laws that regulate rates for the provision of cable service if the Federal Communications Commission determines that cable operators in that state are subject to effective competition. See 42 U.S.C. 543(a)(2), 556(c). In 2020, Maine, a state that has effective competition, adopted into law the statute at issue in this case, the Pro Rata Act. Plaintiffs filed suit requesting a declaratory judgment that the law was preempted by the Cable Act. The district court concluded that the Pro Rata Act was preempted by the Cable Act as a matter of law. The First Circuit reversed, holding that Maine's Pro Rata Act is not preempted by federal law because it is not a law governing rates for the provision of cable service and is, rather, a consumer protection law that is not preempted. View "Spectrum Northeast, LLC v. Frey" on Justia Law
Hood v. American Auto Care, et al.
Alexander Hood, a Colorado resident, appealed the dismissal for lack of personal jurisdiction of his putative class-action claim against American Auto Care (AAC) in the United States District Court for the District of Colorado. AAC, a Florida limited liability company whose sole office was in Florida, sold vehicle service contracts that provided vehicle owners with extended warranties after the manufacturer’s warranty expires. Hood’s complaint alleged AAC violated the Telephone Consumer Protection Act (TCPA) and invaded Hood’s and the putative class members’ privacy by directing unwanted automated calls to their cell phones without consent. Although he was then residing in Colorado, the calls came from numbers with a Vermont area code. He had previously lived in Vermont, and his cell phone number had a Vermont area code. Hood was able to trace one such call to AAC. Although it determined that Hood had alleged sufficient facts to establish that AAC purposefully directs telemarketing at Colorado, the trial court held that the call to Hood’s Vermont phone number did not arise out of, or relate to, AAC’s calls to Colorado phone numbers. In light of Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021), the Tenth Circuit determined the trial court's dismissal could not stand. "The argument regarding 'purposeful direction' ... is implicitly rejected by Ford, and the argument regarding 'arise out of or relate to' ... is explicitly rejected. ... We also determine that AAC has not shown a violation of traditional notions of fair play and substantial justice." View "Hood v. American Auto Care, et al." on Justia Law
In re Altaba, Inc.
The Court of Chancery adopted Verizon Communications Inc.'s proposal for the amount of security required for its indemnification claim relating to national consumer-oriented class actions, holding that Altaba, Inc. (the Company) shall reserve $400 million as security earmarked for that claim, inclusive of the $58.75 million that the Company had paid to fund its share of the settlement.The Company, formerly known as Yahoo! Inc., publicly disclosed massive data breaches only after selling its operating business to Verizon Communications Inc. The Company's customers filed a series of national customer class actions. The parties to the class actions subsequently reached a global settlement, which the federal district court approved. The Company then dissolved. Verizon possessed a contingent contractual claim to indemnification from the Company for fifty percent of the liabilities associated with the class actions, and the Company proposed an amount of security that Verizon rejected. This proceeding followed, with the Company claiming that no security was required for Verizon's indemnification claim. The Court of Chancery held that the Company failed to carry its burden of proving that its proposed amount and form of security would be sufficient to satisfy Verizon's claim for indemnification if it matured and adopted Verizon's proposal for an amount. View "In re Altaba, Inc." on Justia Law
Loyhayem v. Fraser Financial & Insurance Services, Inc.
Loyhayem filed suit under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(A)–(B), which prohibits robocalls to cellphones except for emergency purposes or with the prior express consent of the called party. Loyhayem received a call to his cell phone that left a pre-recorded voicemail message: Hi, this is Don with Fraser Financial... I recently saw your industry experience and I wanted to let you know that we’re looking to partner with select advisors ... I thought you might be a fit.” Loyhayem characterized this call as a “job recruitment call,” and alleged that it was made using an automated telephone dialing system and an artificial or pre-recorded voice and that he did not expressly consent to calls from Fraser.The district court dismissed Loyhayem’s suit, holding that the TCPA and the implementing regulation do not prohibit job-recruitment robocalls. The court read the Act as prohibiting robocalls to cell phones only when the calls include an “advertisement” or constitute “telemarketing,” as those terms have been defined by the FCC. The Ninth Circuit reversed. The statute prohibits in plain terms “any call,” regardless of content, that is made to a cell phone using an automatic telephone dialing system or an artificial or pre-recorded voice. Loyhayem adequately alleged that the call he received was not made for emergency purposes and that he did not expressly consent to it. View "Loyhayem v. Fraser Financial & Insurance Services, Inc." on Justia Law
Bilek v. Federal Insurance Co.
Bilek received unauthorized robocalls concerning health insurance that allegedly violated the Telephone Consumer Protection Act and the Illinois Automatic Telephone Dialing Act (47 U.S.C. 227; 815 ILCS 305/30(a)(b)). Bilek sued on a vicarious liability theory, claiming that Federal contracted with Innovations to sell its insurance; Innovations hired lead generators to effectuate telemarketing; and the lead generators made the unauthorized robocalls that form the basis of Bilek’s claims. Bilek cited three agency theories: actual authority, apparent authority, and ratification.The Seventh Circuit reversed the dismissal of Bilek’s complaint. Expressing no view on whether Bilek will ultimately succeed in proving an agency relationship between the lead generators and either Federal or Innovations, the court concluded that Bilek alleged enough at the pleading stage for his complaint to move forward. Bilek alleges more than a barebones contractual relationship, and did enough to plead that the lead generators acted with Federal’s actual authority. Bilek alleged that Federal authorized the lead generators, through Innovations, to use its approved scripts, tradename, and proprietary information to solicit and advertise its insurance; Bilek received a robocall, and after pressing 1, he spoke to a lead generator who used this proprietary information to quote Federal’s insurance. View "Bilek v. Federal Insurance Co." on Justia Law
Horn v. Liberty Insurance Underwriters, Inc.
The Eleventh Circuit concluded that, under Florida law, the policy exclusion barring coverage for claims arising out of an invasion of privacy unambiguously excludes coverage for claims alleging violations of the Telephone Consumer Protection Act of 1991 (TCPA) in which the complaint repeatedly alleges that defendants invaded the privacy of plaintiffs. The court explained that the invasion of privacy exclusion barred coverage for the class action here because the class complaint specifically alleged that iCan intentionally invaded the class members' privacy and sought recovery for those invasions. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty. View "Horn v. Liberty Insurance Underwriters, Inc." on Justia Law
Cranor v. 5 Star Nutrition, LLC
Plaintiff filed a class action complaint alleging that 5 Star negligently, willfully, and/or knowingly sent text messages to his cell phone number using an automatic telephone dialing system without prior express consent in violation of the Telephone Consumer Protection Act (TCPA). The district court dismissed the complaint for lack of standing.The Fifth Circuit reversed, concluding that plaintiff has alleged a cognizable injury in fact: nuisance arising out of an unsolicited text advertisement. The court concluded that the TCPA cannot be read to regulate unsolicited telemarketing only when it affects the home. The court also concluded that plaintiff's injury has a close relationship to common law public nuisance and, moreover, plaintiff alleges a special harm not suffered by the public at large. The court rejected the Eleventh Circuit's holding in Salcedo v. Hanna, 936 F.3d 1162, 1168 n.6 (11th Cir. 2019), and remanded for further proceedings. View "Cranor v. 5 Star Nutrition, LLC" on Justia Law
Gorss Motels, Inc. v. Lands’ End, Inc.
The Second Circuit affirmed the district court's grant of summary judgment in favor of Lands' End in a putative class action brought by Gorss Motels under the Telephone Consumer Protection Act (TCPA), seeking compensation for faxes it received advertising the products of Lands' End.As a preliminary matter, although the parties do not raise the issue on appeal, the court concluded that Gorss has standing to proceed under the TCPA. The court concluded that Gorss gave prior express permission to receive the faxes at issue through its franchise agreements with Wyndham, and rejected plaintiff's contention that any permission to send fax advertisements was given to Wyndham and not to Lands' End. Therefore, the court concluded that Gorss agreed to the process that occurred here, in which Wyndham sent Gorss fax advertisements on behalf of a Wyndham approved supplier, Lands' End, advertising products that could be used in franchised motels. View "Gorss Motels, Inc. v. Lands' End, Inc." on Justia Law
Mesa Laboratories, Inc. v. Federal Insurance Co.
Mesa sent faxes promoting its services. Some recipients had not consented to receive such faxes, and the faxed materials did not include an opt‐out notice as required by the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C). Orrington filed a class‐action lawsuit under the TCPA and the Illinois Consumer Fraud and Deceptive Business Practices Act and alleged that Mesa’s conduct constituted common‐law conversion, nuisance, and trespass to chattels for Mesa’s appropriation of the recipients’ fax equipment, paper, ink, and toner. Mesa notified its insurer, Federal, of the Orrington action. Federal declined to provide a defense. After Mesa and Orrington reached a settlement, Mesa sued Federal, alleging breach of contract, bad faith, and improper delay and denial of claims under Colorado statutes.The Seventh Circuit affirmed summary judgment in favor of Federal. The policy’s “Information Laws Exclusion” provides that the policy “does not apply to any damages, loss, cost or expense arising out of any actual or alleged or threatened violation of “ TCPA “or any similar regulatory or statutory law in any other jurisdiction.” The exclusion barred all of the claims because the common-law claims arose out of the same conduct underlying the statutory claims. View "Mesa Laboratories, Inc. v. Federal Insurance Co." on Justia Law