Cannabis companies nationwide are facing yet another statutory obstacle that can have serious (and potential ruinous) consequences for the emerging industry if not appropriately addressed—the Telephone Consumer Protection Act (“TCPA”). There is a recent uptick in class-action lawsuits filed against cannabis companies across the country premised on alleged violations of the TCPA including lawsuits in Michigan and California. These complaints allege cannabis companies sent unsolicited marketing text messages or placed automated phone calls to individuals without their consent. Cannabis dispensaries and other cannabis-related businesses should add TCPA compliance protocols to their checklist of regulatory requirements to be satisfied in this quickly emerging industry.

The TCPA

Enacted in 1991, the TCPA heavily regulates the ability to send phone, text, or facsimile messages through automatic telephone dialing systems. Non-compliance with the statute can be costly, as companies found to have violated the TCPA can be liable for $500 per call or text sent in violation of the Act, and up to $1,500 for willful or knowing violations. Damages are also not capped under the TCPA, so even a small number of texts or calls sent to a large number of recipients can lead to hefty damage awards. The ability to recover significant damages results in most TCPA claims being brought as class-actions. As a result, it is imperative that cannabis businesses that communicate with customers via text or by phone understand the rules governing the TCPA to avoid or at least minimize their liability exposure.
Continue Reading Why Cannabis Companies Need to Care About the TCPA

In a closely monitored case, the U.S. Supreme Court today upheld the restriction on robocalls under the Telephone Consumer Protection Act (“TCPA”) of 1991 but struck the Act’s government debt-collection exclusion. Many followed this case, anticipating it would result in a fatal blow to the TCPA. But today’s opinion extinguished these hopes.

In response to consumer complaints, Congress passed the TCPA to prohibit robocalls to cell phones, among other things. 47 U.S.C. 227(b)(1)(A)(iii). In 2015, Congress amended the robocall restriction, carving out a new government-debt exception that allows robocalls made solely to collect a debt owed to or guaranteed by the United States. 129 Stat. 588.

In 2016, the plaintiffs, political and nonprofit organizations, filed a declaratory judgment action in the United States District Court for the Eastern District of North Carolina, claiming that the TCPA (§227(b)(1)(A)(iii)) violated the First Amendment. Plaintiffs sought the ability to make political robocalls to cell phones. Invoking the First Amendment, plaintiffs argued that the 2015 government-debt exception unconstitutionally favored debt-collection speech over political and other speech, and asked the Court to invalidate the TCPA’s entire restriction on robocalls. The District Court held that the government-debt carve-out was content-based but withstood strict scrutiny. The Fourth Circuit disagreed, invalidating the 2015 exception and holding that the content-based restriction did not survive strict scrutiny.
Continue Reading TCPA Protection Against Robocalls Upheld. Did the Supreme Court Sacrifice the Right of Free Speech For the Sake of Rescuing a Bad Statute?

On February 12, 2016, the United States Court of Appeals for the Sixth Circuit issued its opinion in Baisden v. Credit Adjustments, Inc., 15-3411 (CA 6) (for publication), affirming dismissal of a purported class action under the Telephone Consumer Protection Act (“TCPA”). In Baisden, plaintiffs were the recipients of medical services from Mount Caramel Hospital in Ohio. As part of the care provided, plaintiffs received anesthesiology services from Consultant Anesthesiologists, an anesthesiologist group working within the hospital. When plaintiffs failed to pay for the services rendered, Consultant Anesthesiologists sent their accounts to debt collector, Credit Adjustments. Credit Adjustments used an automatic telephone dialing system and prerecorded messages to contact plaintiffs on their cell phones to request payment.

Continue Reading Sixth Circuit Issues Important TCPA Ruling on “Prior Express Consent”