Cannabis companies are facing a slew of class action lawsuits under the Telephone Consumer Protection Act (TCPA), which prohibits unwanted automated calls and text messages. These businesses should act now to take compliance steps to reduce their TCPA class action litigation risks.
Potential Damages Under the TCPA
The TCPA governs the use of automatic telephone dialing systems to send unwanted phone, text, and fax messages. Signed into law in 1991, it has been interpreted in recent years to cover a broad array of automated dialing systems, including many systems that help businesses reach out to their customers by phone and text. For example, some courts have held that the TCPA covers calls and texts automatically dialed from a stored list of phone numbers and requires prior express consent for those calls and texts.
TCPA statutory damages can be high. Companies can be liable for $500 per unwanted text or call, and the statute further provides courts with discretion to award treble damages of up to $1,500 for willing and knowing violations.
The cannabis industry is increasingly a target for private party litigation arising under the TCPA. With the rapid growth of the cannabis industry in recent years, emerging cannabis companies may not appreciate their risks under the TCPA, which are increasing because of the higher profile of the industry overall.
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