S3 E31: The Impact of the SCOTUS McLaughlin Ruling

Audio version

The Impact of the SCOTUS McLaughlin Ruling

Transcript

Jordan Eisner 
All right. Appreciate it. Hello, everybody. Thank you once again for joining us on another episode of Compliance Pointers. This one today we’re talking about the impact of the SCOTUS McLaughlin ruling. So this is, this is out of our unique marketing compliance group here at CompliancePoint that focuses on
TCPA and telemarketing, do not call texting, e-mail, really what we call direct marketing compliance requirements. And so I’m joined by a frequent guest Tony Jarnigan for the for the marketing compliance focus type podcast.
Tony is a consultant on our team, but with CompliancePoint, I know over two years got to be maybe coming close to Tony or maybe coming close to three, I should say. Not Tony. Of course you’re coming close to Tony. You are Tony. Prior to that, he spent 10 years at Disney Vacation Club doing compliance work and he’s got 20 years plus really in this industry around these things and he’s always great to have on these podcasts. So Tony, good as always to have you on.

Tony Jarnigan  
Thank you very much, Jordan. And by the way, not to correct you here in front of everybody a bit, it’s 3 1/2 years coming up on forward, you know, Can you believe that?

Jordan Eisner  
3 1/2.
I yeah, I can. Well, that’s the thing. I’m always, I’m always on the over. I’m always on the over. And you go, well, no, Jordan, it’s only been one and it’s only been two. And now of course I’m on the under and now you’re on the over. So I’m, I’m just always on the flip side of reality, but that’s not surprising for anybody that listens to this podcast.

Tony Jarnigan  
3 1/2 and they said it wouldn’t last.

Jordan Eisner  
There you go. Well, well, good to have you on.

Let’s start, you know, with the McLaughlin ruling, right? Can you break it down? Can you explain why this is significant or could be very significant for the telemarketing industry?

Tony Jarnigan  
Absolutely. And you know, our podcast listeners are probably no stranger to this, right? I mean, you had a guest on a few weeks ago, Alex Krasovec, who spoke to it and we’ve written blog posts on it. It was a pretty big, you know, decision and.
Waited on the decision with, you know, with much anticipation. But you know, basically in a nutshell, it says that, you know, district federal district courts, trial level courts, right. They are no longer bound by FCC Interpretations, declaratory rulings, maybe even rules under their rulemaking authority. And they should give deference to those opinions and past opinions, but they don’t have to, they don’t have to adhere to them.
And So what it means is, is that again on the trial level court and our our listeners should bear in mind, there’s 94 of these things around the country and you know, they’re no longer bound by FCC interpretations and rules. So you know, they’re free to make up their own minds previously.
Obviously, you know, the way that it worked was is that they were bound by FCC interpretations and rules, and the only way that those could get challenged was at the circuit or appellate level courts.
And they had to be done within 60 days of the rule or declaratory issuance. So now it’s like the Wild West in a nutshell, right that and that, you know, these district courts and all level courts can end up interpreting things on their own as what they think the TCPA says.

Jordan Eisner 
Well, that brings up my next question, which is, you know, we’ve started to see some of that the wild, Wild West rulings involving text message lawsuits. So what happened in those cases? You know, give, give some color on the wild, Wild West and what you’re seeing and then the specific one around text messaging that we saw.

Tony Jarnigan  
Right. Well, this was actually an area that, you know, a lot of people anticipated would being one of the first challenges, right. Our texts, calls or calls, texts, you know, which had been the FCCS position for a number of years.

Through a number of different declaratory rulings and such. And because the TCPA has passed in 1991, when texts were never thought of, do not mention, don’t do not mention texts.

Jordan Eisner 
Right. And even when amended in 2013, nowhere near I would imagine the text volume nowadays and text being used from a business-to-consumer marketing standpoint like it is today.

Tony Jarnigan  
Right. So, yeah, I think and by the way, I think it’s notable that both. So there’s two cases like as you said, right, there’s one in Illinois and one in Oregon and these these cases have been going on for a few months well before.
The Supreme Court issued their decision and the defendant businesses in each of these instances had had filed for motions to dismiss. Again, hope, I think probably anticipating seeing the writing on the wall.
And you know, they had, they had a good chance of, you know, winning and getting the the cases thrown out and again followed both both of them before the the SCOTUS’s ruling and then you know.

Then once it came out, then both judges, as I recall in both of these cases, they both referenced the McLaughlin ruling. But so yeah, and in Illinois, the the defendant business had been accused of sending, you know, text messages to someone on the do not.
All list and the motion to dismiss basically said this doesn’t apply because texts are not addressed under the TCPA and the the motion to dismiss in Oregon pretty much said the same thing, but we had two different rulings.

Jordan Eisner  
Yeah.

Tony Jarnigan  
On the same day within minutes of each other. So yeah, so the the Illinois court, I would say, you know, they’re they’re probably a very strict constructionist type court. They said that, yeah, we agree that it’s not in the TCPA and therefore we’re throwing your case up.

Jordan Eisner  
Wild.

Tony Jarnigan  
Or throwing the plaintiff’s case out. And in Oregon it was just the opposite. It said that, you know, functionally texts and calls are the same thing. To dismiss this case would be to also, you know, sort of neglect, you know, the privacy concerns for the plaintiff that these things are, you know, meant to address. So yeah, two entirely different rulings.

Jordan Eisner  
And I don’t know if it’s just that.
For the more than a decade, I’ve told people that texts are like calls.
But I just seem to side with the Oregon one. But you know that’s where you talk about the wild, Wild West and and we’ll see you know what happens with with text messaging if it’s if it’s not viewed the same. And I’m not asking that question here.
Because I don’t think anybody really knows the answer, but it will change.

Tony Jarnigan  
Right.
Yeah, I think that, you know, I think that it probably puts more pressure if for lack of a better term on Congress to act right to you know and and they there was a proposed law you may remember last year the Do Not Disturb Act that was proposed at the beginning of 2024 that you know sort of gave new definitions to some of these terms robocalls and you know would have applied to both calls and texts that sort of would have updated a lot of things in many respects and but it for whatever reason it didn’t it didn’t go anywhere. So I mean you know we could we could still see.
You know, something like that on the federal level, you know, so.

Jordan Eisner 
Gotcha. OK, um.
Aside from a text is a call or a text is not a call, what are the FCC interpretations do you think could be in question now or next?

Tony Jarnigan  
Well, I think that one of the another one that you know was high on a lot of people’s radars was written consent, right. The FCC construct that you know you have to have prior expressed written consent.
In order to use, you know, regulated technology for for marketing purposes and the TCPA never mentions anything in writing. And so I think that’s another one that you know, we could see, you know someone challenging that to say, written and consent, right? Cuz the TCA doesn’t require that, and you know, so we can see what happens there too. That’s a big one. You know the whole different the distinction between marketing and informational texts and that you know what’s needed for an informational text is, you know.

Prior expressed consent. Well, what’s prior expressed consent? Well, it’s the mere provision of your phone number. So if I gave you my phone number during the normal course of business, you now have, you know, that’s expressed consent to, you know, call or text me for, you know, informational purposes.

Jordan Eisner 
Right.

Tony Jarnigan  
So I think those are probably the, you know, the two biggest ones. But then I mean also just recently, right, we’ve heard that there’s been a lot of swirl around the whole revocation of consent rule, right. And you know you have to businesses have to revoke consent through any reasonable means and.

Jordan Eisner  
Yeah.
Good.

Tony Jarnigan  
You know that there’s these minimum words that you have to, you know, opt people out of on a text message, et cetera, et cetera. So, you know, I think that, you know, there could be some challenges to the express written consent or excuse me, to the revocation of consent.

Jordan Eisner  
Revocation of consent.

Tony Jarnigan  
Right.

Jordan Eisner  
Yeah, I mean, well put, Tony. So, you know.
And what I think feels like a lot of or an uncertain time for a lot of people in many ways, here’s more uncertainty, right? I think for businesses and how they’re operating, especially if outbound direct-to-consumer marketing is a lifeblood of their business as it is for so many.
What recommendations would you have or can you give at this point for businesses, given that uncertainty, to ensure that they’re mitigating risks of fines and lawsuits the best they can? And maybe that’ll be a good closing question.

Tony Jarnigan 
Comply with what the FCCC has said, right? Don’t. Yeah, don’t. Because you think about, you know, how this court structure and the court system works, right? I mean, you know, that is one decision from one of these 94 district courts in Illinois.

Jordan Eisner  
Stay in compliance.

Tony Jarnigan  
Right. So you know, I don’t certainly don’t go out and start making the wholesale changes in terms of what you’re doing. Don’t go out and say, well, I don’t need, you know, because of this one decision, I don’t need, you know, express consent to call somebody.
On a do not call list or or excuse me, detect somebody on a do not call list. So we’re going to have to, it’s as you mentioned, it’s a period of uncertainty. We’re going to have to wait and see how these things play out, right. You think about one option I said it was maybe Congress will act.
But other than that, we’ll have to wait for these things to bubble up to the court system, right? So if it were to get appealed and then it go to an appellate court or a Circuit Court, there’s 13. As I said, there’s 94 district courts across the country and there’s 13 Circuit Courts of Appeal. One of those is for the whole country for limited jurisdiction. One is exclusively for District of Columbia. So that leaves 11 that comprise the rest of the country and you know those range in coverage.
Three, I think the smallest is 3 states, and then the largest comprises like 7 or 8 less populous states, seven or eight states.
And so, you know, once that gets, if one of these decisions were to be appealed and then the appellate court or the Circuit Court of Appeal agreed that that texts aren’t calls, now you’ve got a larger geographic area that you, you know you can if your footprint is there then.
Technically, you know, you could use that as a binding decision. Even better, of course, is if it were, you know, ultimately appealed. But we’re talking about long periods of time, right? If these for these to get appealed to circuit courts of appeal or even the Supreme Court, so.
You know, in terms of a compliance posture, I’d say keep assuming that what the FCC has said is gospel. If you’re adventurous, right, and you find yourself in one of these situations where you’re getting sued and you see an opportunity.
That you know the facts of my case, the TCPA doesn’t address it, right? You may be the one, you may be the next defendant business to raise one of these issues and you know you may be successful again in your narrowly geographically defined District Court.
But there’s always going to be somebody, right, that’s going to challenge this. But other than that, I just keep, just keep compliant. Just assume that the FCC rules are gospel. And then we’ll see how these things play out on the appellate court level or if something happens on the legislative front with Congress.

Jordan Eisner  
Yeah, comply best practices and you can trust your gut on some of these things. I would say maybe it’s easier said than done and everybody’s gut is different and everybody’s opinion of compliance and best practice perhaps is different, but yeah.
Consumer tells you to stop texting them or stop calling them. I’m probably not a buyer. It’s easy for me to say, but probably not a buyer. Well, Tony, thanks for your time. Thanks for your insights. Very valuable once again. I do think this was a good quick blurb on the McLaughlin ruling. So we’ll we’ll wait and see and and hope that this is informative for businesses and individuals listening to this podcast. If you have further questions or you’re looking for clarification on this or what are even the rules to comply with right that are.
Uncertain right now, please reach out compliancepoint.com. You can e-mail directly at connect@compliancepoint.com. You can reach out to us that way. We’re pretty active on LinkedIn and other social channels, so please don’t hesitate to inquire and we’d be more than happy to field your questions, concerns.
Around this topic and the many other topics that we serve. Till next time. Thanks everybody. Be well.