U.S. businesses are seeing what one legal reform group is calling "explosive growth" in litigation filed under a law that was originally championed by South Carolina's former governor and U.S. Senator, Ernest "Fritz" Hollings (D-SC).
The law, the Telephone Consumer Protection Act (TCPA), was meant to restrict telemarketers and was sponsored by Hollings and signed into law by President George H.W. Bush in 1991. In recent years, however, the law has come under scrutiny from business and consumers groups concerned that it is becoming a profit center for certain plaintiffs attorneys.
A new report, by WebRecon LLC, found that there has been a 1,272 percent increase in TCPA suits since 2010.
The U.S. Chamber Institute for Legal Reform, a blog post published last week, attributes the increase in TCPA litigation to "clever plaintiffs’ lawyers and professional TCPA plaintiffs (yes, there are people who actually make a living off filing these frivolous lawsuits) taking advantage of outdated, ineffective laws."
"Many of these companies are sued for reasons outside of their control, such as dialing a number provided by a customer that was later reassigned to another party," notes the blog post. "If you consider that modern day texts and smart phones are the dominant method of electronic communication, and with 100,000 cell phones numbers reassigned every day, it is nearly impossible for a company to communicate important, sometimes lifesaving information, without risking a TCPA lawsuit."
As Palmetto Business Daily previously reported, the South Carolina Civil Justice Coalition (SCCJC) last fall co-signed a letter to members of the House Energy and Commerce Committee calling for reform of the law.
"When the Telephone Consumer Protection Act (TCPA) was written 25 years ago, it was well-intentioned legislation serving the important purpose of protecting the privacy of Americans against abusive telemarketing calls,” reads the letter. “Since then, the TCPA has become an engine for abusive class action litigation—hitting businesses both large and small.”
In May 2016, the U.S. Senate Commerce Committee, chaired by U.S. Senator John Thune (R-SD), held hearings on possible reforms to the TCPA.
Business organizations are waiting to see if the Trump Administration and new Congress will advance those reforms in 2017.