TCPA Class Motion Ruling: Nonprofits Performing With Twin Functions – Telecoms, Cellular & Cable Communications

The TCPA “nonprofit exemption” could not apply to a
nonprofit entity appearing: (1) on behalf of a for-profit entity
and/or (2) with twin industrial and non-commercial functions.

On this putative class motion, Plaintiff challenges
Defendant’s alleged observe of constructing unsolicited
telemarketing calls to people who registered their cellphone
numbers on the nationwide Do Not Name registry (“DNC”).
Defendant operates a nonprofit firm and “purports to supply
credit score counseling providers and debt administration plans on a nonprofit
foundation.” Plaintiff asserts that one other entity: (1) gives
back-office and administration providers to Defendant, (2) exerts
management over Defendant’s telemarketers, and (3) generates
revenue from Defendant’s telemarketing actions. Pinn v.
Client Credit score Counseling Basis, Inc., No. 22-cv-04048,
2023 WL 21278 (N.D. Cal. Jan. 3, 2023).

Plaintiff asserted class motion claims underneath the Phone
Client Safety Act, 47 U.S.C. § 227(c)(5)
(“TCPA”). Defendant filed a movement to dismiss as a result of the
calls have been to advertise Defendant’s tax-exempt nonprofit
“debt counseling providers.” The District Court docket denied the
movement and permitted the case to proceed by analyzing the twin
industrial and non-commercial objective of a nonprofit entity’s
communications:

• TCPA’s regulation: The TCPA authorizes
  “[a] one that has obtained a couple of phone name
  inside any 12-month interval by or on behalf of the identical entity in
  violation of the laws prescribed underneath this subsection”
  to convey an motion for injunctive aid and/or precise or statutory
  damages of as much as $500 per violation. 47 U.S.C. § 227(c)(5).
  The corresponding laws present in related half that
  “[n]o individual or entity shall provoke any phone
  solicitation to … [a] residential phone subscriber who has
  registered his or her phone quantity on the nationwide do-not-call
  registry of individuals who don’t want to obtain phone
  solicitations that’s maintained by the Federal Authorities.”
  47 C.F.R. § 64.1200(c)(2). This prohibition additionally applies to
  wi-fi phone numbers. 47 C.F.R. § 64.1200(e). A
  phone solicitation “doesn’t embrace a name or
  message … [b]y or on behalf of a tax-exempt nonprofit
  group.” 47 C.F.R. § 64.1200(f)(15)(iii)
  (emphasis added).

• 2003 FCC Order: The Federal Communications
  Fee (“FCC”), in a 2003 order, states considerations
  about calls made collectively by nonprofit and for-profit
  organizations,” together with that the exemption
  “regularly has been used to veil what’s in actuality a
  industrial enterprise.” In Re Guidelines & Reguls.
  Implementing the Tel. Client Prot. Act of 1991, 18 F.C.C.
  Rcd. 14014, 14087-88 (2003) (emphasis added).

• 2005 FCC Order: The FCC, in a 2005 order,
  states that “[i]n circumstances the place phone calls
  are initiated by a for-profit entity to supply its personal, or one other
  for-profit entity’s merchandise on the market–even when a
  tax-exempt nonprofit will obtain a portion of the sale’s
  proceeds–such calls are phone solicitations as outlined by
  the TCPA.” Within the Matter of Guidelines & Reguls.
  Implementing the Tel. Client Prot. Act of 1991, 20 F.C.C.
  Rcd. 3788, 3800 (2005).

• Massaro/PETA ruling: In Massaro
  v. Past Meat, Inc., 3:20-cv-510, 2021 WL 948805, at *6 (S.D.
  Cal. March 12, 2021), the courtroom dominated that the nonprofit exemption
  didn’t apply, on the pleadings stage, to a nonprofit –
  Folks for the Moral Remedy of Animals (“PETA”)
  – which could possibly be held liable underneath the TCPA for sending
  advertising textual content messages selling various animal meals merchandise
  as a result of the textual content messages have been made with twin industrial and
  non-commercial functions. PETA denied that it obtained compensation
  from Past Meat for the advertising messages, however the courtroom was
  obligated to just accept the allegations as true for functions of the
  movement to dismiss. See additionally, Aranda v. Caribbean Cruise Line,
  Inc., 179 F. Supp. 3d 817, 828 (N.D. Unwell. 2016) (analyzing a
  completely different TCPA exemption for calls made for a non-commercial
  objective).

In sum, courts is not going to routinely dismiss a TCPA motion
towards a nonprofit entity and, as an alternative, the courtroom will analyze the
industrial and noncommercial functions of the communications.

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