Derek: Hello everyone, Derek Johnson with tatango.com.
I'm here with TCPA Attorney Ernesto Mendieta and we're answering questions from the Interwebs.
So let's first get started.
One of the biggest questions, especially because it's coming to the end of 2018, is what is
the outlook for TCPA, Telephone Consumer Protection Act litigation for 2019?
And you're really the best person ask because you're a TCPA attorney.
So what has been going on and what do you think is gonna go on in 2019?
Ernesto: Exactly.
So if we're gonna talk about what's gonna happen in 2019, of course, we're gonna do
a little guessing.
But we can have reasonable expectations seeing what's the trend, what's been happening and
we can see what we believe is gonna happen in 2019.
So first, with the TCPA being one of the most litigated matters in the U.S. in federal courts,
well, we can see a trend actually happening in 2019 that come from comparing it to 2017.
And there's a decline in the number of claims that have been filed.
Derek: And these are like lawsuits, right?
Ernesto: Yes.
Derek: TCPA lawsuits, people sending text messages.
Ernesto: Yes.
We're talking about TCPA lawsuits initiated for unsolicited calls, unsolicited text messages
for TCPA violations.
Comparing how 2018 is going to 2017, we see a 15% decrease on the number of claims.
Derek: Okay, that's good because we did videos a year or two ago, wasn't it the last like
10 years it's just been skyrocketing up?
Ernesto: Yes.
This trend is relevant now because we can see it in the year 2017 to 2019 so it's a
new trend coming down.
But this is considering public statistics.
This doesn't mean necessarily that all claims are declining.
What it means and what is an explanation of this decline is that there's a lot of companies
that now are becoming aware and are getting afraid of the amount of damages that the TCPA
claims involve.
So a lot of companies are being proactive in preventing those claims, meaning...
Derek: So you think that's what's reducing the amount of TCPA lawsuits is the brands
are more aware that there are litigators out there.
There are consumers that feel they did harm from text messaging.
So they're more aware of the rules and the laws.
Ernesto: Correct.
I would give two main reasons.
One is this one we're talking about companies being proactive and acting to prevent those
claims.
They work with TCPA attorneys to draft their terms and conditions.
Their marketing campaigns are done in cooperation with an attorney, and that obviously reduces
the amount of claims or the risk that they have.
But the second main reason which even means that their claims are actually not declining
but the public statistics show us that there's a decline is that while these companies are
acting to prevent TCPA claims they have also been including arbitration clauses in their
terms and conditions and in their contracts.
So what happens if they put an arbitration clause that refers specifically to TCPA claims
then when that company gets sued it goes directly to arbitration instead to a public court.
Derek: Okay.
So that 15% decrease, those lawsuits that are being counted don't include arbitrations.
Ernesto: Correct.
Derek: So it's been moved from like lawsuits to arbitration, some of that.
Ernesto: Yes.
Some of that kind of claim is 15 decreased because arbitration, kind of, remain confidential.
So even though there's a claim we will never hear about it and it will not be shown in
public statistics because the company settle it or get to an award in arbitration but it
didn't become public and the company is safe about publicity.
They got a resolution.
They claimed and got maybe what they were asking and they fought it in the shadows.
Derek: And this is because in an increase of brands realizing that they should have
an arbitration clause in their terms and conditions for their text message marketing.
Ernesto: Correct.
Derek: So not only are they realizing the rules and everything they're also putting
things in their terms and conditions which can keep them out of court.
Ernesto: Correct.
Derek: Okay.
And I don't know if you know this but the last 10 years it's always been going up, the
lawsuits.
Ernesto: Yeah.
Derek: So this is the first year that it's gone down.
Ernesto: And especially it's been going way up in complaints to the FCC, to the attorney
generals, like the complaints are the consumers make about them have been going up for the
last 10 years as you say.
Lawsuits...this is a trend that we're looking right now in 2019 and this can be an explanation
for that.
But it doesn't necessarily mean that claims aren't going down.
It's just how those claims are being resolved, right?
Are they being resolved at court or are they being resolved at arbitration?
Derek: That makes sense.
And from our perspective in the text message marketing world, it's not like text message
marketing is going down.
The amount of text messages or MMS messages that people are sending, brands are sending,
is going significantly up every year.
So you can't attribute the 15% decrease to just a lack of text messaging.
It's going up just as fast as everything else.
So really that's an interesting statistic and it's really the first, you know, decrease
in the last like 10 years.
Ernesto: That's correct.
But let's just keep in mind that the decrease is using public statistics of lawsuits, right,
going to court.
Derek: Yep, so the arbitration stuff has kind of muddied the waters a little bit.
Ernesto: Yes.
Derek: Because it's private.
Ernesto: Yeah, and you could never think that professional plaintiffs are going away, I'll
just say if text messaging is increasing professional plaintiffs are gonna keep increasing too.
Derek: And over the last 10 years it's significantly gone up like there was only a couple handful
of TCPA lawsuits way back in the day when we started.
Now, it's like a monster amount.
So even decreasing 15%, it's not like there are 5 lawsuits now, or 15% less, there were
thousands of lawsuits.
Ernesto: We're talking about thousands of lawsuits a year.
Derek: So 15%...it's a good little trend line but that doesn't put everybody off the hook
being like, "Oh, you don't need to worry about TCPA anymore."
Ernesto: Correct, yes.
I think this statistic more than saying, "Oh, it's getting better for companies" means as
long as companies get better by themselves in preparing for TCPA results and benefits,
clear and direct benefits to them.
So it's important for them to be aware of it and act upon it.
Derek: So what do you see?
It's October, November right now 2018 ending the year and then 2019, what do you see happening?
Ernesto: Regarding the matters of the claims that are actually being submitted I think
what's gonna happen is we're gonna continue seeing these cases regarding what's the definition
of the ATDS, what's reasonable revocation of consents, what's the definition of coparty,
all these issues, and aspects that are waiting for the FCC to act.
Remember from the DC Circuit's opinion and ACA International there were several issues
that this circuit order the FCC basically to readdress them, give some clarity to the
industry.
And we're waiting for that.
So until the FCC does that we're gonna continue seeing claims asking, "Well, what's an ATDS?
What's the capacity of an equipment that makes an ATDS?"
The problem now, and I think we're gonna continue seeing in 2019, is that there's judges that
are having different interpretations.
Since there's no guidelines issued yet by the FCC one court will say one thing, the
other one would say the contrary thing and it's hard for companies to keep up with those
different interpretations.
Derek: Because the FCC is the one that...they drafted the TCPA or they managed the TCPA
kind of.
Ernesto: Yeah.
The TCPA is the law itself issued by Congress but the FCC is the one who enforces it and
the one who has issued regulations and to interpret it and to make it clearer for Congress.
Derek: So I know a lot of companies and SMS companies and brands...they've gone out to
the FCC and they've asked for clarification on certain things.
And what you're saying is the FCC has not yet given clarifications.
So there's still a lot of kind of unknowns.
The unknowns, do they create lawsuits or, I guess, how does that impact 2019 if there's
just a bunch of unknowns for brands?
Ernesto: They do create lawsuits because if a company cannot be sure if the equipment
they're using is qualified as an ATDS or not and then they get sued they're gonna say like,
"Wait, I thought this was not an ATDS and I don't have a clear guidance by the agency,
the FCC of what is and what is not.
Then I'm gonna go to a judge and ask him."
Derek: So you have to go to the judge and then they have to figure it out because the
FCC hasn't figured it out yet?
Ernesto: Yeah.
And professional plaintiffs can take advantage of it.
They can see those equipment or those facts that are in the gray area that are not so
clear and they can take advantage of it and say like, "Well, I have a shot at it.
It's not clear now.
I'm gonna sue, I'm gonna try to get, I don't know, how many millions of dollars."
Derek: So you could even see the TCPA litigation increasing until the FCC clarifies things
because they're gonna look at the gray areas, these TCPA attorneys on the other side and
representing consumers and they're gonna say "There's an opportunity here, you know, because
nothing has been kind of set in stone.
There's a chance that a certain judge, you know, would rule one way or the other."
But once the FCC comes in and says, "No, it's black and white."
Then do you see the TCPA litigation decreasing once there's more kind of clarification?
Ernesto: I hope so, but we're gonna see the next step of the litigation process.
Once we have a guideline then everybody that was not complying with that specific guideline
is gonna say like, "Well, I have all these companies that didn't do it.
I'm gonna go through them.
Okay, we have 50% that was complying to this new standard, but everybody under the standard
I'm gonna go after them," right?
Derek: Okay, So it's really important to be following what the FCC is saying and making
sure that your SMS campaign depending on kind of what your TCPA attorney is advising but
kind of going the way that most likely the FCC is going to rule on these things.
Ernesto: Yeah.
Concerning these areas that are kind of gray areas, I think a good approach to take is
be conservative, right?
Why push the limit...
Derek: That's what we do at Tatango.
It's always "play the conservative."
It's just not worth it, and that's a good practice.
It's $500 to $1,500 per text message that violates the rules.
So if you're sending a million text messages at once that's a million times 500 or 1500,
we're talking hundreds of millions of dollars in damages.
It's something just not worth...you know, follow the rules.
Ernesto: Yeah, follow the rules.
Follow the rules as they are now.
Be aware of what's happening with the FCC.
Whenever something new comes up follow those in your rules.
So it's important to keep track of developments and also to stay in contact with a TCPA attorney.
Derek: I always recommend that.
The SMS providers are great but we build great technology.
The TCPA attorneys, you guys, are following this every single day.
And it's changing all the time.
It's not just the FCC, it's the circuit judges, you know, in different areas.
It's always changing.
Ernesto: Yes, correct.
Derek: Okay.
Is there anything else that we need to know for the outlook for 2019 for the TCPA?
Ernesto: I don't think so.
Just like I said I would recommend, if you want to know what's gonna happen in 2019 is
watch this video so you have expectations.
But also keep watching the news.
Keep watching everything that's happening.
That's the only way you actually gonna know.
Derek: Yeah.
And I really don't think a brand can do it themselves.
And these videos are great as an explanation and kind of making people aware but we always
recommend employing and hiring a TCPA attorney because these guys...you live and breathe
TCPA.
You're not out doing divorces or, you know, other things, right?
Ernesto: Just TCPA.
Derek: Just TCPA like you can't match that kind of knowledge that these guys have.
So, awesome.
Well, thank you very much.
Ernesto: Thank you, Derek.
Derek: Yeah.
And, again, my name is Derek Johnson with tatango.com.
And I've been talking to TCPA Attorney Ernesto Mendieta, and this is another "TCPA Ask" video.