FTSA Cases Shed Light on Defense Strategies

In recent months, companies facing Florida Telephone Solicitation Act (FTSA) class actions have relished in significant victories in key court decisions, providing insights and considerations.

Companies navigating FTSA cases should closely monitor these decisions, as they provide valuable roadmaps for defense strategies. Two specific cases, Holton v. eXp Realty, LLC, and Soto Leigue v. Everglades College Inc. offer illustrative examples, shedding light on critical considerations surrounding amendments, proof requirements, damage limitations, and class certification criteria. The new rulings draw attention to the following:

Retroactive Application for “STOP” Safe Harbor

In a significant development on December 28, 2023, the Middle District of Florida ruled in Holton v. eXp Realty, LLC., that the favorable May 2023 amendments of the Florida Telephone Solicitation Act (FTSA) apply retroactively, which resulted in the court striking plaintiff’s class allegations that were pled before the amendment took effect. The plaintiff accused the defendant of unsolicited marketing texts but failed to meet the amended FTSA’s requirements by not pleading that he and other members of his proposed class responded with “STOP,” leading to the dismissal of his class action claims. Thus, the failure to plead the “STOP” provision may serve as a basis for dismissal in future cases, offering protection for companies facing FTSA actions.

Requirement to Plead and Prove Actual Damages

The Everglades College Inc. case addressed crucial issues in FTSA cases, including a plaintiff’s capacity to bring an FTSA class action lawsuit and the determination of statutory damages. Regarding damages, the court ruled that, under Florida law – Statute § 768.734 (entitled “Capacity to sue”) – a plaintiff must both allege and prove actual damages to pursue an FTSA class action for statutory damages, which the court defined as an “actual, quantifiable injury or loss.“ The court held that the plaintiff had not proven actual damages because her allegations in the record were for “liquidated actual damages” and intangible harms, which do not meet the “actual damages” threshold, as they are not a recognized statutory or common law remedy, and the Legislature did not specifically condone them as a remedy in the FTSA.

Limitation on Statutory Damages

Again, in the Everglades College case, the court clarified that statutory damages under the FTSA are capped at $500 per action (or increased to $1,500 for willful violation), not on a “per violation” basis. This ruling provides crucial insight, being one of the first cases to address and confirm the damages cap interpretation under the FTSA. This is an exit from a per-violation basis, as observed in comparable federal laws like the Telephone Consumer Protection Act (TCPA).

Class Action Certification

It should be noted that, as a threshold matter, the court in the Everglades College case found that the plaintiff lacked standing to bring a class action; however, it proceeded to determine that the plaintiff’s claims would have failed regardless because she failed to meet several class certification requirements. In that case, the plaintiff alleged the FTSA violations regarding automated text messages occurred after she responded “STOP” and then received several more texts months later. While the court took that into consideration, they took issue with whether her class was properly certified, ultimately holding that it was not. While the court agreed that Plaintiff satisfied the numerosity element, as they found Plaintiff failed to meet the typicality, adequacy, commonality, and predominance elements necessary to certify a class.

  1. Typicality in a class action means there is a requirement that the claims of the class representative must be typical of those of the class, and it is satisfied when each class member’s claim arises from the same course of events that caused the class representative’s legal injury. Here, the court held that Plaintiff had not satisfied the typicality requirement because she lacked jurisdictional standing to bring the claim.
  2. To establish adequacy, a potential class must demonstrate that (1) the claims of the class representative do not conflict with those of any absent class members, and (2) the attorneys representing the potential class are competent, experienced, and capable of handling the litigation. In Everglades College, the court held that Plaintiff could not satisfy the adequacy requirement because she lacked standing, and the history of the case suggested that the attorneys handling it had caused undue delay.
  3. Predominance is satisfied when a plaintiff can prove his or her own case and, by doing so, necessarily prove the case of each class member. Specifically, a plaintiff must show the existence of a “reasonable methodology for generalized proof of class-wide impact and damages.” Without that proof, class representation is not appropriate. This element for class certification is a more stringent version of the “commonality requirement,” though the two are often simultaneous considerations. The plaintiff in Everglades College relied heavily on her expert witness, whose report did not pass. Without his testimony as to identifying and determining “telephone sales calls” and “requests not to receive future text messages,” and the sections of his report that drew attention to individualized issues, the Court found that the plaintiff hadn’t presented substantial facts to satisfy predominance.

These key factors to obtain a class action were under review due to various specific issues, including whether all the defendant’s text messages fell under “telephonic sales calls,” whether class members explicitly requested to stop receiving messages, whether putative class members were bound by agreements to settle their claims, and if the claims of the absent class members were consistent with the rest of the group. Due to the insufficiencies found in the class certification, the court decided to dismiss the plaintiff’s attempt at declaring a class action lawsuit.

In conclusion, the rulings highlight the retroactive application of amendments, the stringent requirement for plaintiffs to plead and prove actual damages, and the clarification of statutory damages limitations. Companies must consider these developments to create effective defense strategies in the event of litigation. As FTSA cases continue to shape the legal framework, staying informed and proactive is necessary for companies facing or anticipating class action claims.

CompliancePoint has the team and services to bring your marketing campaigns into compliance with all applicable regulations, including the  TCPA, TSRDo Not Call listsCAN-SPAM and all state telemarketing laws, including the FTSA. Contact us at connect@compliancepoint.com to learn more about how we can help.

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