Marketing law, like all law, is constantly evolving and changing. In this Blog, we are going to give an overview of two recent unrelated Supreme Court cases that both have major effects on the future of marketing.
AMG vs. FTC
The first case involves AMG Capital Management, a payday loan company founded by former race car driver Scott Tucker. In 2012, the FTC investigated AMG (as they regularly do with businesses, as we have written about before) and accused them of deceiving customers. As a result of his business activities, Scott Tucker was also charged criminally and is currently serving sixteen years in prison.
On the civil side, the FTC sued AMG for the $1.27 billion dollars they were accused of stealing from consumers. The FTC cited Section 13(b) of the FTC Act as its basis to seek both a permanent injunction and equitable money relief. AMG’s lawyers raised an argument – not that Scott was innocent – but that the FTC did not have the legal right to obtain the monetary relief they sought under that specific section of the law. Simply put, they accused the FTC of steadily expanding their rights over the last few decades based on a statute that did not legally justify their actions.
Many Judges had ruled in favor of the FTC over the years until, in early 2021, the AMG case made its way to the Supreme Court. On April 22, 2021, in a rare and shocking unanimous decision, the Supreme Court sided with AMG. They found that the FTC did not have the power to seek monetary relief under Section 13(b) of the FTC Act, which the FTC has (so far, unsuccessfully) asked Congress to restore.
This is an extremely rare case of a court siding with businesses over the FTC. As AMG makes plain, the FTC has been increasingly – and illegitimately – expanding its power over businesses. This judgment allows businesses to (temporarily at least) sleep easier at night.
Facebook vs. Duguid
The specifics of what led to Facebook vs. Duguid, which we have written about in detail here, are not as interesting as its ultimate resolution. The issue at the core of the case revolved around the Telephone Consumer Protection Act, which was passed in 1991. In the Act, “auto-dialers” were deemed illegal and defined as “devices with the ability to store or produce telephone numbers to be called, using a random or sequential number generator.”
That technology may have been a significant threat in 1991, but today everyone’s iPhone has the ability to store and dial numbers on its own. There has been much debate over whether a telemarketing company programming a machine to call a list of numbers they procured, rather than randomly dialing numbers, counts as an illegal “auto-dialer.”
There were two different regional court answers to this conundrum: that any device that could store and dial numbers was an auto-dialer, and that only a device that can randomly generate numbers was an auto-dialer. On April 1, 2021 the Supreme Court unanimously voted that a device has to have a random or sequential number generator in order to be considered an “auto-dialer.” This effectively narrows the definition of an auto-dialer in the TCPA, offering today’s telemarketers the use of more modern options instead of holding them accountable for the practices of yesterday.
The Big Picture
While unrelated, both of these recent cases involved the Supreme Court voting unanimously in the interests of businesses. This is not exactly typical, but it shows that marketing laws are constantly changing, and it is important to stay on top of them. For help with your business, whether related to telemarketing or otherwise, contact Cove Law, P.A. today! We know the challenges your business is facing are not insurmountable… because we’ve dealt with them ourselves!
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- The Role of Consent in Telemarketing: Obtaining and Documenting - February 15, 2024
