College Student Sues Robocaller

June 5, 2013
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This story was written by students in Political Science 207 at Macalester College: Zach Gilfix, Lucas Smith, Luke Gehman, Elliott Averett, Madelyn Nelson, Ross Bronfenbrenner, Rebekah Keller, and Philip Jamison.

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Robocalls such as these have been ruining family dinners for decades. Telemarketing is a $700 billion-dollar industry in the United States alone. Often conducted out of mass phone banks that can dial hundreds of numbers at once, the modern telemarketer is a silent computer that spits out automated messages across the entire country. This despite the fact that most telemarketing calls and messages have been illegal in the US since 1991.

What does it take to challenge a telemarketer? When Elliott Averett, a student at Macalester College in St.Paul, MN, got a robocall last January, he decided to find out.

“I looked at the number and it was a 541 number which is an Oregon area code,” Averett says of the call he received in January. “I’m originally from Oregon, so I thought this number was probably somebody I knew, so I picked up and it was a recorded voice that was selling some kind of medical compensation for injuries from birth control or something.” Averett hung up, but he decided not to leave it at that.

Congress passed the Telephone Consumer Protection Act in 1991 to put a stop to unsolicited phone calls. The TCPA is rather unique because it specifically allows individuals who receive these illegal calls to sue the telemarketers in small claims court where the average person can get justice for minor damages and they don’t need a law degree to do so. It offers plaintiffs relief of between $500 to $1500 for violations.

The TCPA is broad in scope and offers a wide variety of consumer protections such as the “do-not-call” list. Under the law, pre-recorded or automated voice messages in calls placed to private homes are forbidden. It is illegal under the TCPA to make “any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system [ATDS] . . . [to any] cellular telephone service.”

The TCPA also prohibits “any call using any automatic telephone dialing system to any cellular telephone service.” In short, those annoying automated Averett had been getting are illegal under federal law. So, with the help of some fellow Macalester students, he sought protection under the law.

Averett did some research on his robocaller and traced the call back to an entity known as “Callerid4u.” The students found that Callerid4u (and similar companies) work by buying up large blocks of phone numbers that they then rent out to telemarketers. There are two benefits of this system to telemarketers: first, by using the numbers provided by Callerid4u, telemarketers are able to seem like they are calling from inside the United States, when in reality they could be calling from anywhere in the world. Second, because of their contract with companies like Callerid4U, making mass amounts of phone calls is very profitable.

Callerid4U numbers have specific caller ID names associated with them, which are stored in a special database accessible to other telecom utilities. This means that for any outbound call that transmits a special code corresponding to one of their phone numbers, Callerid4U collects a fee for transmitting the caller ID name associated with that number to the call recipient’s local carrier (like AT&T or Verizon) which is receiving the call.

When telemarketers call consumers, the consumers receiving the call see the ID provided by CallerID4U in their caller ID. Then, their phone company has to reimburse Callerid4u for downloading that info from the database where it’s stored. This reimbursement is called a “dip fee,” and it is typically a fraction of a cent per call. However, when these fees are aggregated across millions of outbound calls per week, it amounts to significant money which is shared with the telemarketers that placed the call.

With binders full of FCC complaints and other pieces of evidence, Averett and his fellow students headed to small claims court in St. Paul. Their argument? The dip fee constitutes a violation of the TCPA, because FCC rules cover not only those who made the calls to be liable, but also anyone who causes the calls to be initiated as well.

For students like Madelyn Nelson, the first glimpse of small claims court was surprising. “It wasn’t like the courts you see on TV. The room was actually very small– no space for an audience or anything like that.”

But they drew a surprising participant with their action: Paul Maduno, CEO of Callerid4u. “It was actually funny, we had these binders full of evidence and all they had was a folder with a few sheets of paper,” Nelson says. “We all sat there awkwardly for a few minutes until the judge arrived.”

She saw the proceedings as “relaxed,” but Averett found it “pretty nerve wracking … We just stood together in front of the judge in a small group and had a conversation. There was no high-TV drama. I was shaking a little bit, but I was in pretty good shape because I’d argued in front of judges before in Mock Trial.”

It doesn’t take too much heavy research to find thousands of similar cases that have been brought up against the TCPA in small claims courts around the nation in recent years. While small claims court might offer a reprieve to many, it is a far from perfect system.

Not every consumer who gets an illegal telemarketing call has the time, energy, or interest to take the matter to court, even a small claims court. And even in small claims court, the barriers can be intimidating: Any plaintiff who goes to small claims court still must prove their claim is true by a preponderance of the evidence. They still have to use the normal legal discovery procedure, such as issuing subpoenas, if they want to gather evidence or compel witnesses to testify. And even if they win a judgment, collection can often be difficult to enforce. Averett knew these difficulties going in, but still thought he could win his case.

A few weeks the trial, Averett received a letter from the court. The case had been dismissed. The decision simply read “Dismissal of claim with prejudice against defendant Paul Maduno. Failure to state a claim on which relief can be granted as to defendant Callerid4u.”

Why they lost is still a mystery to Elliott and his team. Without a more in-depth explanation from the judge, all Elliott can do is speculate: “I think for the judge, this was too much of a new situation. This is not the same thing as paying to make a call. I thought it was similar enough to hold them liable, but I don’t think the judge was willing to go out on a limb in small claims court. It makes we wonder about the enforceability of the TCPA.”

Brian Stano, a prosecutor for Summit County, MN, wrote an article in 2003 about the regulatory hurdles created by the TCPA. He thinks the law is too riddled with loopholes, and those are growing wider with each passing year.

“I still think that there are too many exceptions,” he says, “I don’t think the TCPA addressed privacy rights or even contemplate where we would be technology-wise in 20 years … I don’t know if the TCPA is really caught up with that yet.”

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