U.S. Sens. Marco Rubio (R-FL) and Ted Cruz (R-TX), both Latinos, may play a pivotal role Wednesday in determining the outcome of what some view as an initiative to protect American businesses from costly lawsuits.
The two senators, who sit on the U.S. Senate Commerce Committee, are set to hear testimony advocating reform of an anti-telemarketing law, the Telephone Consumer Protection Act (TCPA), sponsored by former U.S. Sen. Ernest "Fritz" Hollings (R-SC) and enacted in 1991.
TCPA restricts telemarketing and the use of automated telephone equipment. But many believe the law is outdated given how rapidly technology has evolved over the past 25 years, and therefore invites plaintiffs’ lawyers to exploit the law’s outdated language by bringing frivolous class-action lawsuits against businesses.
The hearing, titled “The Telephone Consumer Protection Act at 25: Effects on Consumers and Business,” will examine TCPA and the Federal Communications Commission’s (FCC) application of the law in relation to new technologies and practices popularized since adoption of the act.
“This hearing is going to be in front of the Senate Commerce Committee, which I think is a very appropriate place to get some awareness going about what the TCPA is doing to American businesses,” Becca Wahlquist, an attorney for Snell & Wilmer, recently told Latin Business Daily.
Wahlquist will be testifying on behalf of the U.S. Chamber Institute of Legal Reform.
Also scheduled to testify are Monica Desai of Squire Patton Boggs; Rich Lovich of Stephenson, Acquisto & Coleman testifying on behalf of the American Association of Healthcare Administrative Management; Margot Saunders, counsel with the National Consumer Law Center; and Indiana Attorney General Greg Zoeller.
“We are not going in with any specific recommendations or not to talk about a piece of legislation that has already been put together or anything,” Wahlquist said. “This is an awareness-raising exercise to talk to some of the senators on the Commerce Committee about how the TCPA has been really abused in its focus on businesses that are trying in good faith to reach out to their own customers.”
U.S. Sen. Bill Nelson (D-FL) is a ranking member of the committee. Since Rubio and Nelson hail from Florida, which has one of the worst lawsuit climates in the country, it will be interesting to see whether the senators welcome reform.
Florida ranked 44th out of 50 in a 2015 Lawsuit Climate Survey conducted by the Harris Poll and released by the U.S. Chamber Institute for Legal Reform. The Sunshine State also ranked third on the 2015-2016 Judicial Hellholes report by the American Tort Reform Foundation.
Last July, the FCC upped the ante by setting up rules that hold businesses accountable for calling a customer number reassigned to another person without the business’ knowledge.
“The litigations are just sprawling all over the countryside and the really negative effect (is) on consumers of all (because) it is not helpful for businesses to feel they can’t contact them, sometimes about really important things,” Wahlquist said. “You’ve got businesses that are feeling really hamstrung if they need to alert their customers that perhaps services will be turned off because a bill is late, or to provide notifications.”
Wahlquist said the last time anyone talked about the TCPA in the Senate was in 2010, but talk of reform didn’t progress very far. Now she hopes for a different outcome.
“What tends to happen with the TCPA is because the statutory damages can be in the hundreds of millions or billions of dollars, you generally just see a lot of settlements,” Wahlquist said.
AT&T settled a TCPA lawsuit for $44 million, and Capital One settled one for $75 million, Wahlquist said.
“I have a client that sent out one text message to everyone that was in the membership." Wahlquist said. "There were allegations that some people in the membership shouldn’t have gotten the text message. And for one text message that didn’t lead to any complaints, there was one person who filed a class-action saying, ‘Give us $32 million.’ For one text,”
Wahlquist plans to highlight such examples and hopes educate the Senate Commerce Committee about what has been taking place.
“It really is (large stakes) because there are so many businesses that still may not even be aware of the statute until they get sued under it,” she said.
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