If you are like me, you’ve received an annoying number of robocalls on your cell phone disguised to appear as though they are of local origin. I also get recorded calls from New York that start out, “Ni hau,” which is about as much Chinese as I can understand. Sometimes an unexpected and unwanted text message may arrive as well.
by Stephen M. Perry, Esq. | Mar 01, 2019
Unless you signed up to receive these robocalls and text message blasts, they are generally unlawful. In many cases, however, they are sent anonymously or transmitted with impunity from abroad. On the other hand, when it is an identifiable domestic company that has made the robocalls or sent out unwanted text message blasts, the company may be asking for trouble.
This past year has seen the continuation of a nationwide explosion in class actions filed against prominent businesses for engaging in improper telemarketing practices. Several of these class action cases have been brought against real estate brokers.
In a recently filed Florida federal court class action, the plaintiff alleged that the Real Estate Empire Group unlawfully sent out text message blasts in an attempt to recruit sales associates. In another recent class action, a consumer accused the Miami branch of a national real estate firm of unlawfully texting advertisements. Similar federal class action cases have been filed against real estate brokers in a number of other jurisdictions.
These class actions arise under a federal statute known as the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Among other things, the TCPA generally makes it illegal to use an automatic telephone dialing system to call or text someone’s cellphone without that person’s consent.
The TCPA imposes penalties of $500 for each unlawful call or text, which can increase to up to $1,500 per unlawful call or text in the case of a willful violation. The plaintiff does need to prove any actual damages. The potential liabilities can be truly staggering in the context of a class action.
By its terms the TCPA does not apply to a manually dialed call or text. It applies to calls made through an automatic telephone dialing system. So the million dollar question, literally, is what constitutes an automatic telephone dialing system for purposes of the statute? Right now, unfortunately, that is anybody’s guess.
Based on the statutory language, some courts have held that the TCPA only applies to dialing devices that randomly generate or serially dial phone numbers. Most telemarketing programs do not operate in that manner; these days they typically utilize a stored database of numbers. In September 2018, in the case of Marks v. Crunch San Diego LLC, the United States Court of Appeals for the Ninth Circuit rejected this narrow construction of the statute. Recognizing advances in telemarketing technology, the court held that the TCPA applies to any devices that can (a) store a list of numbers and (b) dial or text them automatically. In the Marks case itself, the defendant’s telemarketing system allowed it to compose text messages that would be sent at a designated time to numbers that could be manually selected from a stored list. The court held that this system fell within the scope of the statute.
The Federal Trade Commission (which as of this writing is shut down) is expected to issue new guidance on what constitutes an automatic telephone dialing system for purposes of the TCPA. The new guidance is needed because the United States Appeals Court for the District of Columbia struck down the old guidance last year. Considering that there is already a disagreement among the United States Courts of Appeals on the issue of what constitutes an automatic telephone dialing system, it is an issue that may ultimately be decided by the Supreme Court. In the meantime, however, class action lawyers are filing dozens of new claims each month based on a broad construction of the statute. And, as noted above, a number of these cases have targeted real estate brokers.
To stay out of the line of fire, you should assume that the TCPA may apply to any automated system that makes calls or sends texts. Firms should further assume that they may be held responsible for the conduct of their agents. If a firm or any of its agents or associates are using what may be considered an automatic dialing system to send text messages or to make robocalls – either on their own or through a telemarketing company – it is essential that the program be carried out in compliance with the provisions set forth in the TCPA.
First and foremost, in order to be in compliance with the statute, the sender needs to have the prior express written consent of the recipient before using an automatic dialing system to send advertisements or generalized marketing to a wireless number. A second important requirement of the TCPA is that the communication include instructions that recipients can follow to easily opt out of receiving such messages in the future, such as by replying “STOP” or the like. One recently filed class action in the real estate industry is based largely on the allegation that the operator of a real estate website wrongfully continued to send texts even after the recipient had repeatedly requested that they stop. Perhaps this was a programming glitch of some type, but liability under the TCPA does not require bad intent.
In sum, real estate brokers should make themselves aware of any use by the firm or any of its agents of automated phone calls or texts. If such telemarketing is being employed, make sure it is being done in compliance with the TCPA. If there are any doubts, consult with a qualified professional. The stakes are too high to take any chances.