September 16, 2019

September 16, 2019

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First Circuit Concludes that Hybrid Cellular-VoIP Telephone Numbers Are Subject to TCPA

The Court of Appeals for the First Circuit reversed a summary judgment granted in favor of Verizon, by concluding that a “hybrid” telephone number using both VoIP and voice wireless services must be considered “assigned to a… cellular telephone service” as required by the Telephone Consumer Protection Act (TCPA).  Breda v. Cellco P’ship, Nos. 17-2196, 18-1010, 2019 U.S. App. LEXIS 24146 (1st Cir. Aug. 2, 2019).

Background

In this case, Plaintiff Robin Breda opened an account with Verizon Wireless for telephone service in 2003.  Breda was a Verizon customer until 2015, when she ported her telephone service to a “WiFi + Cell Talk + Talk Service Plan” with Republic Wireless (“Republic”).  Since Republic does not have direct access to telephone numbers, Republic ported Breda's telephone number to Bandwidth.com, Inc. ("Bandwidth"), a third party with authority to provide telephone numbers. But since Bandwidth only has authority to provide "wireline" numbers, Breda's telephone number was listed by Bandwidth as a "wireline" rather than "wireless" number on Neustar’s database.

Republic’s system provides telephone service to its customers using a platform that "prefers" Voice over Internet Protocol (VoIP) technology for the transmission of calls. This means that when a call is made to one of its numbers, it is first received by Republic's servers, which determines whether its customer’s smartphone is connected to wireless internet ("Wi-Fi") or not. If it is, Republic routes the call using VoIP technology through Bandwidth, which provides VoIP service for Republic's customers. If the phone is not connected to Wi-Fi, Republic passes the call off to a third-party cellular service provider (either Sprint or T-Mobile), which routes the call to the customer’s phone using its cellular network.

Using Republic’s services, Breda only receives calls through a cellular network when she is away from home and not connected to her WiFi.  When at home, she receives incoming calls through her home Wi-Fi connection.

At some point after switching to Republic, Breda began receiving automated calls from Verizon that included a prerecorded voice prompt announcing the calls were intended for an unrelated person. When prompted, Breda pressed a button to indicate she was not the intended recipient. Breda also spoke to a live Verizon representative, informed that person that she was receiving the calls in error, asked that the calls stop, and was told they would. However, the calls continued for a period of time. Republic's records confirmed that several of Verizon's calls were transmitted to Breda's phone through a cellular network.

TCPA Complaint

Based on these unsolicited automated calls, Breda filed a class action complaint against Verizon alleging violations of the TCPA.

 Verizon moved for summary judgment arguing that Breda’s TCPA’s claims failed as a matter of law because her telephone number was no longer “assigned to a cellular telephone service.”

The District Court granted summary judgment in favor of Verizon ruling that Breda "was receiving VoIP services rather than traditional cellular telephone services," and concluding that "VoIP telephone service" is not "cellular telephone service" within the meaning of the TCPA.

Analysis by the Court of Appeals

The First Circuit reversed the summary judgment decision.

For the Court of Appeals, the real issue of the case is not whether "VoIP service" is "cellular telephone service" under § 227(b)(1)(A)(iii) of the TCPA, but rather, whether a hybrid service with both cellular and VoIP components can be considered as telephone service.

The Court determined that despite the lack of clear Federal Communications Commission (FCC) guidance for this kind of hybrid services, the type of service provided by Republic is meaningfully distinguishable from exclusive VoIP service, and it constitutes "cellular telephone service" within the meaning of the TCPA.  The Court held that because the TCPA is a consumer protection statute, and it must be interpreted broadly in favor of consumers.  For the Court, construing "cellular telephone service" to embrace a hybrid service that routes some calls over cellular networks is consistent with the TCPA's purpose to "ban[] . . . automated or prerecorded telephone calls . . . to protect telephone consumers from [] nuisance and privacy invasion.”

The First Circuit Court continued its analysis saying that “as a matter of common sense, we see no principled reason for treating a service that involves the routing of calls over a cellular network the same as a service that exclusively uses VoIP technology for purposes of determining liability under the ‘cellular telephone service’ provision of the TCPA,” and concluded that “the district court erred by not considering the cellular aspect of Breda's telephone service.”

Finally, the Court analyzed the phrase “assigned to” under the TCPA, since Neustar database had Breda’s Bandwidth number listed as a wireline number. The Court of Appeals said that “we need only consider whether the number is being used in connection with such [wireless] service” and that “the pertinent question is not how Bandwidth, or any entity, "classifies" Breda's number, but whether her telephone number is in fact "being used in connection with" a "cellular telephone service."  Since Breda’s number was being used, in part, for wireless services, then it should be considered as a wireless number.

Conclusions

Previously, courts in the First and Fourth Circuits have held that a telephone service exclusively using VoIP technology is distinct from, and generally not considered, a cellular telephone service within the meaning of the TCPA. Seee.g.Jones v. Experian Info.Sols., No. 14-10218-GAO, 2016 WL 3945094, at *6-7 (D. Mass. July 19, 2016); Karle v. Sw. Credit Sys., No. 14-30058-MGM, 2015 WL 5025449, at *6 (D. Mass. June 22, 2015); Lynn v. Monarch Recovery Mgmt., Inc., 953 F. Supp. 2d 612, 616-17 (D. Md. 2013), aff'd, 586 Fed. App'x 103 (4th Cir. 2014)

This Court of Appeals decision is significant because the Court distinguished between strictly VoIP and hybrid VoIP services, holding that a hybrid service constitutes a cellular telephone service. We can anticipate other district and appellate courts to reach similar conclusions in the future because the Court held that to the extent that hybrid services are becoming more common, a strict reading of what constitutes a “cellular telephone service” would leave a significant gap in the consumer protection of the TCPA

As a practical matter, this decision also highlights the need for companies to consider hybrid VoIP services when setting up TCPA compliance plans.  In this case, Bandwidth – the telephone number provider, not the VoIP provider – improperly coded Breda’s number as “wireline” instead of “wireless” on Neustar’s system because it only had authority to provide “wireline” numbers.  Thus, although the FCC has recognized Neustar as a resource for information that can assist telemarketers in identifying numbers assigned to wireless carriers, the tool alone is not entirely reliable for avoiding potential TCPA liability in the VoIP space.  Moreover, the Court rejected the idea that the classification of Breda’s number was dispositive, instead inquiring whether Breda’s telephone number was “in fact being used in connection with a cellular telephone service.”  However, whether a VoIP telephone number receives calls using cellular technology is information that companies often don’t possess or cannot confirm.

Copyright © 2019 Womble Bond Dickinson (US) LLP All Rights Reserved.

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About this Author

Nadia Adams, Womble Dickinson Law Firm, Los Angeles, Litigation Law Attorney
Attorney

Nadia Darkazalli Adams is a skilled trial lawyer and business litigator who drives outstanding results for the firm’s clients in state and federal civil litigation. A former prosecutor, Nadia is a tenacious and powerful courtroom advocate.  She has tried more than forty bench and jury trials, prosecuting violent crimes and sex offenders in the process. This experience makes her driven and direct in the pursuit of her clients’ interests, but she never loses sight of her clients’ specific needs.  She delivers clear-cut and reliable advice at every phase of litigation.  ...

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Ernesto Mendieta Telecom Attorney
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Ernesto Mendieta is an experienced bilingual attorney with a history of helping international clients resolve complex matters.  

Ernesto began his career in Mexico as an associate at one of the world’s largest law firms, before specializing in telecommunications law at Mexico’s preeminent telecommunication boutique firm. In that capacity, Ernesto worked with competitive carriers entering the Mexican telecommunications market on all aspects of regulatory compliance and corporate formation. He helped several U.S. companies start operations in Mexico as ISPs, MVNOs, resellers and e-commerce providers.

After earning an LL.M. from Georgetown University and passing the New York bar, Ernesto continued his career in the United States where he dedicated a substantial part of his practice to international investment arbitration as counsel in an ICSID arbitration proceeding brought pursuant to the North American Free Trade Agreement (NAFTA). In that role, Ernesto has coordinated with technical experts and economists from throughout the United States and Latin America.

In addition, Ernesto counsels domestic and foreign telecommunications companies on compliance with FCC regulations, including the Telephone Consumer Protection Act (TCPA), and assists companies with monitoring telecommunications policy developments at home and abroad that may impact their business.

*Ernesto Mendieta is not licensed to practice law in the District of Columbia. He is supervised by attorneys licensed to practice in the District of Columbia.

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