eSignature and ePayment News and Trends

Achieving digital transformation and securing digital assets


eSignature and ePayment News and Trends

eSignature and ePayment News and Trends


A fact of business today is that customers – both consumers and other businesses – and employees expect to transact digitally. To remain competitive, companies find themselves increasing their efforts to digitally transform their businesses.

Successfully implementing this transformation requires careful planning to ensure regulatory compliance, a smooth integration with existing business technology and a positive customer experience.

This is our first bulletin for 2019, and it too aims to help companies identify important and significant news and legal developments impacting digital offerings. In this issue, we provide an overview of a concept we call "Fairness by Design" – to help you ensure that you are not only complying with any disclosure requirements, but that the "net impression" of the entire transaction does not mislead the customer and thus open you up to liability. In addition, we will cover recently enacted federal and state laws, federal and state regulatory activities, fresh judicial precedent and other important news.


Fairness by Design

Recent judicial decisions emphasize that when offering consumer products and services online, including on mobile devices, technical compliance with disclosure requirements, while necessary, is not sufficient. It is important to structure the presentation of information and product disclosures to ensure that they not only meet requirements for timing and content, but are also presented in a manner that is not "misleading" or "deceptive." Companies need to ensure that the consumer's online experience does not create a misimpression causing the consumer to take a particular course of action or make a particular choice that the consumer did not understand or intend. Thus, the "net impression" created by the entire online interaction will be reviewed by regulators and the courts when evaluating regulatory compliance.

Two relatively recent cases illustrate the point. See, Consumer Financial Protection Bureau v. TCF National Bank, 2017 WL 6211033 (US Dist. Ct. Minn.) (September 8, 2017) where the court held that technical compliance with the law can still lead to liability if aspects of the entire transaction are deceptive. Also see, Federal Trade Commission v. AMG Capital Management, 910 F.3d 417 (9th Circuit) (December 3, 2018), where the Ninth Circuit upheld a $1.27 billion dollar judgment against a company that offered high-interest short-term loans to customers because the "net impression" caused by the loan disclosures meant that a consumer acting reasonably under the circumstances was likely to be deceived.

The issue is not solely the purview of federal regulators. State unfair competition laws may also serve as a basis for liability (see, eg, Khoday v. Symantec Corp., 93 F. Supp. 3d 1067, 1087–88 (D. Minn. Apr. 27, 2015), in which the court stated that a violation of a state's unfair competition law can arise where "a perfectly true statement [is] couched in such a manner that it is likely to mislead or deceive the consumer").




  • GAO publishes report on use of alternative data: In December 2018, the GAO published a report that addressed how fintech lenders use alternative data to help determine a borrower's creditworthiness. The report noted that the use of alternative data presents potential benefits (such as the expansion of credit) but that it also poses risks (such as a potential for disparate impact and other fair lending concerns). The GAO said that the CFPB and other federal banking regulators have monitored fintech lenders' use of alternative data, but have not provided lenders and banks with specific guidance on using the data in underwriting. For example, many banks that have partnered with FinTech stated that clarification on the appropriate use of alternative data would help them manage their relationships with those lenders. The GAO recommends that the CFPB and the federal banking regulators communicate in writing to fintech lenders and banks that partner with fintech lenders on the appropriate use of alternative data in the underwriting process.


  • CFPB settles complaint regarding electronic fund transfers: On January 3, 2019, the Bureau of Consumer Financial Protection announced that it had reached a settlement with a national bank regarding the bank's alleged violations of the Electronic Fund Transfer Act and Regulation E. The CFPB alleged that the bank failed to properly implement stop-payment requests on preauthorized electronic fund transfers and that it failed to initiate and complete reasonable error resolution investigations. The CFPB also alleged that the bank violated the Consumer Financial Protection Act of 2010 by reopening deposit accounts that consumers had previously closed without seeking the consumer's prior authorization or providing adequate notice. The bank agreed to pay $12 million in restitution and a $3.5 million civil money penalty.


eSignatures and eDocuments

  • Texas AG states that copies of documents concerning real or personal property not eligible for recording when law requires an "original signature": On January 7, 2019, the Texas Attorney General opined on a request asking if a county clerk whose office does not accept electronic documents for recording must accept and record a printed copy of an electronic document in certain circumstances. The AG had been asked to opine about three categories of documents. The first category: documents whose original signatures would otherwise be recordable but only reflect an electronic signature, which is either a facsimile stamp, a copy of the original or contains /s/. For documents related to real or personal property, the law requires an "original signature" that has been "acknowledged...according to law," but it does include an exception for electronic documents that meet certain requirements. The AG said, however, that the printed hard-copy documents are paper documents and not electronic, even though they may have existed previously in electronic form. Therefore, the AG stated that, absent other applicable law, if such paper documents concern real or personal property, a court would likely conclude that they contain an original signature, and if they do not, the county clerk may not accept them for recording. For the second category of documents, the AG was asked whether the county clerk could accept copies of documents previously filed with a state agency that were either not certified or contained a copy of an electronic certification. The AG stated that the relevant laws do not require original signatures, and therefore, if the document is a certificate issued by the secretary of state or a filing instrument certified by the secretary of state, the county clerk can generally accept a copy for recording.

    For the third category of documents, the AG was asked about documents that do not contain an acknowledgement or original signatures but that might be covered for filing purposes under a separate statute. The AG stated that a county clerk must accept for recording a paper document that complies with the particular requirements of the provision that authorizes recordation.

    Finally, the AG's office was asked if the answers would change if the same documents were submitted to a county clerk's office that accepts electronic recording of documents. The AG stated that the answers would not change if "same documents" meant paper documents because the relevant statutes apply to printed documents, regardless of whether separate provisions address electronic recording. If by "same documents," the requester meant those documents in electronic form, then the answers may change depending on the circumstances and the underlying law governing recordation of electronic documents.

ePayments and Digital Currencies

  • NYDFS authorizes digital payment platform that utilizes blockchain: The New York Department of Financial Services (NYDFS) announced that it had authorized Signature Bank to offer a digital payment platform that uses blockchain technology to allow Signature Bank's commercial clients to transfer "Signets" in real time to make payments.
  • NYDFS approved two additional companies for BitLicenses: On January 24, 2019, the NYDFS announced that it approved the applications of Robinhood Crypto LLC, a subsidiary of Robinhood Markets Inc., and Moon Inc., dba LibertyX, for virtual currency licenses. NYDFS has also approved a money transmission license for Robinhood.
  • Pennsylvania states that virtual currency is not "money" under its Money Transmission Act: In January 2019, the Pennsylvania Department of Banking and Securities released guidance addressing the applicability of Pennsylvania's Money Transmitter Act (MTA) to virtual currency businesses. The guidance states that under the MTA, only fiat currency is "money" in Pennsylvania: thus, virtual currency is not money under the MTA. Therefore, to transmit money under the MTA, fiat currency must be involved, and the money transmitter must charge a fee for the transmission. With that understanding, the guidance stated that virtual currency trading platforms that facilitate the purchase or sale of virtual currencies but that do not handle fiat currency directly (any fiat currency paid by or to a user is maintained in a bank account in the platform's name) are not money transmitters. The guidance further states that entities that operate virtual currency kiosks, ATMs and vending machines are not money transmitters as long as they do not transfer money to any third party. Merely exchanging fiat currency for virtual currency (and vice versa) is not money transmission.
  • Texas revises money transmission guidance on virtual currency to address stablecoins: On January 2, 2019, the Texas Banking Commissioner released revised guidance regarding the regulatory treatment of virtual currencies under the Texas Money Services Act. This guidance addresses current trends in the virtual currency field, including the widespread introduction of stablecoins to the market. The guidance reiterates that because cryptocurrency is not money under the Money Services Act, receiving it in exchange for a promise to make it available at a later time or location is not money transmission. In contrast, stablecurrencies, because they are pegged to sovereign currency, may be considered money or monetary value under the Money Services Act; receiving stablecurrency in exchange for a promise to make it available at a later date or location may constitute money transmission. If so, then stablecoins will need to comply with all licensing and regulatory requirements under the Money Services Act.
  • Overstock to pay Ohio business taxes in bitcoin: Overstock announced that it would pay its commercial activity taxes in Ohio using Ohio's recently launched OhioCrypto platform (covered previously here).
  • Overstock subsidiary to develop blockchain-based property and land information platform with Wyoming county: In late December 2018, Overstock announced that Medici Land Governance, its blockchain subsidiary, signed a memorandum of understanding with Teton County, Wyoming to develop a blockchain-based land records and information platform in 2019.



eSignatures and eDocuments

  • President signs 21st Century IDEA Act into law: On December 20, 2018, President Trump signed the 21st Century IDEA Act in law, and it became Public Law 115-336. It had passed the Senate on December 11, 2018. The new law will modernize federal government websites to make them mobile friendly, transition away from paper-based forms and generally create a modernized digital experience for the government's online services.
  • FCC finalizes rule that allows cable operators to electronically deliver certain notices to subscribers: On December 26, 2018, the FCC published its final rule that allows cable operators and other multichannel video programming distributors (MVPDs) to deliver certain information electronically to verified email addresses that was previously required to be delivered to subscribers on paper. In addition, the new rule allows cable operators to respond to consumer requests and complaints via email in certain circumstances. For notices required by Subpart T to be in writing, the FCC decided that it would not require consumer consent, as usually required under ESIGN, because ESIGN also allows federal agencies to exempt a specified category or type of record from ESIGN's consent requirements. For these notices, in lieu of prior consent, the email that delivers the notices must include an opt-out telephone number that is clearly and prominently presented to the customers.


  • FDIC seeks comment on broker-deposit rules because of significant changes in technology and business models: The FDIC released an Advance Notice of Proposed Rulemaking and Request for Comment for brokered deposits. The FDIC is seeking to obtain input from the public as it reviews its brokered deposit and interest rate regulations in light of the significant changes in technology, business models, and products since the regulations were adopted. In particular, the FDIC notes that in recent years, it has been asked about the application of the "deposit broker" definition to new types of third parties that are involved in placing or facilitating the placement of third-party funds at insured depository institutions, and many of these questions relate to advancements in technology. The FDIC noted that the challenge is to distinguish between third-party service providers to insured depository institutions and to third parties who are engaged as a deposit broker.


Remote notarization

  • Michigan revises notary law to allow for remote notarizations: In December 2018, the governor of Michigan approved SB 664, which amends the Michigan Notary Public Act to require the Secretary of State and the Department of Technology, Management, and Budget to review and approve, by March 30, 2019, at least one electronic notarization system for the performance of electronic notarizations in the state. Further, the new law amends the definition of "in the presence of" to include interacting with another person by means of audio and visual communication technology that is part of a remote electronic notarization platform that is approved as described above.
  • Ohio revises notary law to allow for remote notarizations: In December 2018, the governor of Ohio signed SB 263, which allows duly appointed and commissioned notaries to perform online notarizations. The bill also requires the secretary of state to adopt rules for online notarizations, including rules regarding approval to perform online notarizations, process and procedure for online notarial acts, required technology, record retention, online notarial certificates and revocation of authorization to perform online notarizations. The bill also requires online notaries public to complete certain procedures when confirming the identities of individuals seeking online notary services, and requires the secretary of state to adopt standards regarding those procedures.
  • Nevada adopts temporary regulations governing remote notarization: In December, the Secretary of State for Nevada filed temporary regulations governing remote online notarizations. Among the provisions within the temporary regulations are requirements that solution providers must meet as well as requirements addressing identity proofing and credential analysis, including minimum requirements for knowledge-based authentication.
  • 2018 in review: In addition to Ohio and Michigan mentioned above, 2018 saw the following states enacting remote online notarization laws: Indiana, Minnesota, Tennessee, and Vermont. For 2019, it seems that even more states may enact such legislation. Through January, the following 11 states have introduced or have pre-filed legislation that would allow their state notaries to perform remote online notarizations: Arizona, California, Colorado, Florida, Hawaii, Missouri, Nebraska, New Jersey, North Dakota, Oklahoma and Utah.

Electronic recording

  • Michigan revises Uniform Real Property Electronic Recording Act: In December 2018, the governor of Michigan approved SB 999, which amends the Uniform Real Property Electronic Recording Act to require that a county register of deeds accept electronic documents for recording only from a person with which the register of deeds has entered into an agreement establishing a verified transactional relationship. The bill does not define "verified transactional relationship." The bill also requires the Electronic Recording Commission to adopt standards that address the acceptance and use of electronic notarization of documents submitted to a county register of deeds for recording.

Electronic wills

  • 2018 in review: In 2018, two states passed laws authorizing electronic wills – Indiana and Arizona, with Arizona's law taking effect July 1, 2019. Arizona's legislature recently introduced a bill that makes revisions to the recently enacted law, including further defining what constitutes an electronic signature. Indiana and Arizona join Nevada as the three states that officially recognize electronic wills. Additionally, the Uniform Law Commission has an Electronic Wills Committee that has been tasked with drafting a uniform law governing electronic wills.

Digital currency

  • In December 2018, the governor of New York signed into law A8783B, which establishes the New York state digital currency task force. This task force will provide the governor and legislature with information on the effects of the widespread use of cryptocurrencies and other forms of digital currencies and their ancillary systems in the state. The task force will deliver a report on or before December 15, 2020 that addresses numerous subjects, including a review of the digital currency and blockchain industries in New York, the number of digital currencies being traded, and legislative and regulatory recommendations to increase transparency and enhance consumer protections.



Online contract formation and electronic signatures

  • Second Circuit holds that consumer did not agree to online terms and conditions that contained an arbitration agreement: In Starke v. SquareTrade, Inc., 2019 WL 149628 (Jan. 10, 2019), the Second Circuit held that under the totality of the circumstances, the plaintiff was not on sufficient notice of the terms in a post-sale terms and conditions, including its arbitration clause, and therefore did not manifest assent to those terms. As background, the plaintiff purchased the defendant's protection plan on Amazon, and, in so doing, was informed on the product's Amazon page that the service contract would be emailed to him. The Amazon product page contained a link to a document titled Terms & Conditions, but that document did not contain an arbitration clause or a class action waiver. When the plaintiff received the defendant's email, the subject line stated that the "Contract is Enclosed" and it contained, in a hyperlink on the bottom left, a link to terms and conditions (the post-sale T&C). Nothing in the email body directed the plaintiff to the post-sale T&C and nothing referenced an arbitration clause or a class action waiver. When the plaintiff attempted to use his protection plan, the defendant denied his claim and canceled his protection plan, which led to this lawsuit.

    To determine whether the plaintiff had reasonable notice of the arbitration provision, the court analyzed whether the post-sale T&Cs were provided in a clear and conspicuous way. First, the court noted that the defendant never directed the plaintiff's attention to the terms & conditions hyperlink. This mattered because the Amazon product page did not provide notice that the terms would be delivered by hyperlink, and instead stated that they'd be delivered by email. Second, the email itself contains information taking up half the email related to the protection plan; nothing else in the cluttered email stood out as being related to post-sale T&Cs, nor did anything in the email direct the plaintiff to the post-sale T&Cs link. Third, the hyperlink text leading to the post-sale T&Cs was very small and located below several unrelated prompts (eg, "Need Help?") Nothing in the email instructed the plaintiff to click on the link or alerted him that he would be deemed to agree to the terms found at the link. The email also did not instruct him that the hyperlink was where his promised service contract would be found.

    Additionally, being post-sale, the relevant T&Cs were spatially and temporally decoupled from the transaction: spatially because they were not on the Amazon product page, even though they were a hyperlink, and temporally because the email arrived after he made the purchase (although the court noted that providing contract terms after a transaction may be appropriate in certain situations).
    While the court noted that the plaintiff has a duty to read the terms of a contract presented to him, that principle requires the plaintiff be put on notice of the existence of the contract. That did not happen here. The plaintiff was presented with several documents, including the pre-sale T&Cs, the body of the email and the post-sale T&Cs, none of which were specifically identified as the promised service contract. Taking all these factors together, the court found that the plaintiff did not have sufficient notice of the post-sale T&Cs to have manifested assent to its terms.
  • Court upholds arbitration agreement entered into online: In Sultan v. Coinbase, Inc., 2019 WL 319391 (E.D. N.Y. Jan. 24, 2019), the court upheld an arbitration agreement entered into online because the plaintiff had notice of the arbitration agreement and he assented to its terms. The court concluded that the plaintiff had notice and he assented because he clicked a checkbox certifying that they "agree to the User Agreement and Privacy Policy," with hyperlinks to both.
  • Third Circuit affirms lower court's grant of motion to compel arbitration based on electronically executed arbitration agreement. In Dicent v. Kaplan University, (3rd Cir. 2019), a non-precedential decision, the court affirmed the lower court's grant of motion to dismiss and motion to compel arbitration in light of the appellant's execution of an online "enrollment packet" containing an arbitration agreement as part of enrolling in online classes offered by appellee. The appellant argued, without supporting evidence, that she did not sign the arbitration agreement, that she was not informed of the arbitration agreement as part of the enrollment packet and that she never granted the appellee permission to use her electronic signature for the arbitration agreement. The undisputed facts were that the enrollment process included a login to a web portal, where the appellant was asked to enter personal information. The process generated an "enrollment packet" which included this personal information and an arbitration agreement and waiver of jury trial. The enrollment packet was electronically signed by the appellant. Applying Pennsylvania law that an e-signature is a valid means to register legal assent, the court upheld the execution of the enrollment packet which included the clearly labeled arbitration agreement.
  • Court seeks additional evidence before ruling on motion to compel arbitration. In Vandehey and O'Laire v. Asset Recovery Solutions, LLC, 2018 WL 6804806 (U.S. Distr. Ct., E.D. Wisc. 2018), defendants filed a motion to compel arbitration to enforce promissory notes executed online and purchased by defendants. The notes were generated on the Prosper marketplace platform. The plaintiffs contended that they did not sign the promissory notes, nor did they authorize Prosper as their attorney-in-fact to sign the notes on their behalf. They further contended that the defendants were not entitled to enforce the notes.

    The court concluded that the evidence was insufficient to rule on the motion and requested supplementation of the record. The court requested the plaintiffs clarify whether it is plaintiffs' position that they did not electronically sign the notes or the Prosper Borrower Registration Agreement, which appointed a Prosper affiliate as the plaintiffs' attorney-in-fact, or whether the plaintiffs' position is that the plaintiffs' electronic signatures were ineffective. The court further requested defendant Velocity provide proper authentication of the "certificates of loan sale" documenting the sale of the notes from WebBank to Prosper (which occurred prior to Prosper's sale of the notes to Velocity) because the defendant's affidavit did not constitute a sworn affidavit or declaration, or contemporaneous records, of WebBank.
  • Court grants motion to compel arbitration based on electronically signed loan agreement. In Ngo v. PMGI Financial, LLC, 2018 WL 6618316 (U.S.Distr.Ct., N.D. Calif. 2018), the court held that the preponderance of the evidence showed the defendants had met the burden of proof to establish that the plaintiff had electronically signed a loan agreement containing an arbitration provision. The plaintiff argued that he had no way of negotiating any of the loan terms and did not remember signing any agreement to arbitrate, and that he would not have done so. Notably, however, the LoanMe loan agreement included several checkboxes which were required for completion, one of which was next to the statement "YOU CERTIFY THAT YOU HAVE READ AND UNDERSTAND THIS ARBITRATION PROVISION AND AGREE TO BE BOUND BY ITS TERMS." The court recognized that ESIGN allows a symbol, such as the checkmark, to constitute an electronic signature. California law holds that an electronic signature is attributable to a person if it was the act of the person. Such an act may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic signature was attributable. In this case, to obtain a loan, the plaintiff was provided with a unique user name and a temporary password to log into the LoanMe web portal and was required to supply an accurate email address and banking routing information as well as login information for his banking institution. Further, after the plaintiff was informed by a LoanMe representative by phone that the agreement was ready, someone used his credentials to access the LoanMe portal and complete the loan agreement. The LoanMe process was such that if all four checkboxes and the signature were not provided, the loan agreement would have remained incomplete and would not have been processed.


  • Lack of ADA website accessibility regulations not a due process violation: In Robles v. Domino's Pizza, LLC, 2019 WL 190134 (9th Cir. Jan. 15, 2019), the Ninth Circuit reversed and remanded a lower court's dismissal of the plaintiff's ADA claim. The lower court held that the ADA applied to the defendant's websites and apps, as there was a nexus to a physical location, but held that the ADA did not ultimately apply to the defendant because (i) doing so would violate its Fourteenth Amendment due process rights, and (ii) courts should hold off deciding cases under the primary jurisdiction doctrine (courts should not decide cases until an administrative agency with special competence provides guidance). In reversing and remanding, the Ninth Circuit made three major holdings related to the applicability of the ADA to websites and mobile applications: (i) the Ninth Circuit agreed with the lower court that the ADA applies to websites and apps that connect customers to goods and services available at a physical location; (ii) applying the ADA to a business's website does not violate the business's 14th Amendment due process rights; and (iii) invoking the primary jurisdiction doctrine to defer to DOJ rulemaking was inappropriate.

    In holding that the ADA applies to the defendant's website and app, the court expressly stated that it was not deciding whether the ADA covered websites or apps of a physical place of public accommodation where their inaccessibility did not impede access to the goods and services of the physical location. The Ninth Circuit then rejected the district court's finding that requiring the defendant to comply with the ADA would violate its Fourteenth Amendment right to due process. Specifically, the Ninth Circuit stated (i) that the defendant had received "fair notice" that its website and app must be ADA compliant; (ii) that the plaintiff did not seek to impose liability based on WCAG 2.0, which are private guidelines, but instead argued that the court could impose compliance with WCAG 2.0 as an equitable remedy if the website and app are not ADA compliant; and (iii) that just because the DOJ has not issued specific regulatory guidance on how to comply with the ADA does not relieve the defendant of its statutory obligation. Finally, the Ninth Circuit held that the district court should not have invoked the primary jurisdiction doctrine because the DOJ is aware of the issue of website accessibility but has not moved forward with regulating it, and that to delay to wait for a rulemaking is needless because the facts of the case – whether the website and app comply with the ADA – are well within the court's competence. In reversing and remanding, the Ninth Circuit did not opine on whether the defendant's website and app comply with the ADA and instead leave that determination to the lower court.
  • Plaintiff lacks standing to sue under ADA over alleged website inaccessibility because he was not and could not become member of credit union: In Griffin v. Dep't of Labor Fed. Credit Union, 2019 U.S. App. LEXIS 116 (4th Cir. Jan. 3, 2019), the court stated that the plaintiff lacked standing to sue under the ADA because he failed to show a "concrete" or particularized injury and he failed show that he faced a "real or immediate threat" in the future. The plaintiff failed to demonstrate these standing requirements because he was legally ineligible to join the credit union. Notably, the court stated that the plaintiff's status as an ADA tester did not by itself justify standing without some other plausible assertion that the plaintiff could avail himself of the defendant's website but for the alleged discrimination.


  • Bank may be liable for fraudulent wires because of its failure to comply with its own online security procedures: In Essgeekay Corp. v. TD Bank, 2018 WL 6716830 (D.N.J. Dec. 19, 2018), the court denied the defendant's motion to dismiss certain UCC claims, meaning the defendant may be liable for unauthorized transfers from the plaintiff's account, because the defendant may not have accepted the plaintiff's payment orders in good faith and in compliance with its own security procedures. As background, Vajinepalli and Dave, two people associated with the plaintiff, were authorized to access the plaintiff's online banking system. Vajinepalli usually arranged the wire transfers, but he discovered that unauthorized wire transfers had occurred from Dave's online account without Dave's approval. Dave subsequently attempted to log in, but found that his account was locked. The defendant stated that his account was locked because it suspected fraudulent activity. The defendant also claimed that it attempted to contact Dave by phone and email before authorizing the transfers, but when it could not reach Dave, it authorized them anyway.

    Under the New Jersey UCC, the customer will be liable for a transfer if the bank and customer have agreed to a security procedure that is commercially reasonable and the bank accepted the payment order in good faith and in compliance with the security procedure. The court found that the defendant had implemented two-factor authentication that was commercially reasonable. The plaintiff claimed that the defendant failed to comply with its own security procedure when it failed to stop an individual from logging into Dave's account from an unfamiliar device. Because the court was required to draw all reasonable inferences in the plaintiff's favor, it found that the plaintiff had sufficiently pled that the defendant failed to comply with its own security procedures.


  • Confirmation texts with link to app are not telemarketing: In Phan v. Agoda Co. Pte. Ltd., No. 16-CV-07243-BLF, 2018 WL 6591800 (N.D. Cal. Dec. 13, 2018), the court held that text messages sent by the defendant were not telemarketing messages under the Telephone Consumer Protection Act. The plaintiff had booked hotel reservations through the defendant's website, and in so doing, provided his telephone number and agreed to the terms of use and privacy policy. Upon completing each booking, the defendant sent the plaintiff a text confirming the booking and letting the plaintiff know that he could manage his booking by downloading the defendant's free app. The plaintiff alleged that such messages constituted telemarketing because the transaction was complete at the time of booking and the messages encouraged use of the app, which allowed recipients to make future bookings. The defendant argued that the messages were transactional.

    The court agreed with the defendant because the context of the texts indicated that the messages were sent as part of an ongoing business transaction – the plaintiff may have wished to cancel his booking. The court further noted that the content reinforced this conclusion because the plain language is limited to confirming the booking and encouraging the plaintiff to install the app. Including a link to the app did not encourage the purchase of goods or services, and to hold otherwise, the court stated, would contravene prior decisions in this circuit and others holding that the link to a website, without more, does not render the message telemarketing or advertising.
  • Predictive dialer that could not generate numbers randomly or sequentially not subject to TCPA: In Thompson-Harbach v. USAA Fed. Sav. Bank, 2019 WL 148711 (N.D. Iowa Jan. 9, 2019), the court granted the defendant's motion for summary judgment because the defendant's predictive dialer was not an auto dialer under the TCPA because it lacked "the capacity to generate phone numbers randomly or sequentially and then to dial them." To determine whether the defendant's predictive dialer constituted an automatic telephone dialing system (ATDS) under the TCPA, the court relied on ACA International, the D.C. Circuit Court of Appeals decision (covered here) that invalidated the FCC's 2015 Declaratory Ruling's interpretation of an ATDS. This court concluded that ACA International not only invalidated the 2015 Declaratory Ruling but also indirectly invalidated the FCC's 2003 Order and its 2008 Declaratory Ruling, insofar as those latter two defined an ATDS to include a predictive dialer.

    Therefore, the court used the statutory definition of an ATDS to determine whether the defendant's predictive dialer was subject to the TCPA. An ATDS is "equipment which has the capacity–(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." The court found that the adverbial phrase "using a random or sequential number generator" modified both "store" and "produce," as opposed to the plaintiff's argument, which was that the adverbial phrase only modified "produce" and not "store." With that interpretation, the court concluded that the defendant's predictive dialer was not an ATDS because it did not have "the capacity to randomly or sequentially produce or store a number and then call that number."

    As the court noted, courts are divided on whether the FCC's 2003 Order and 2008 Declaratory Ruling are still valid for their conclusion that a predictive dialer constitutes an ATDS under the TCPA. One recent case not cited by this court, Richardson v. Verde Energy USA, Inc., 2018 WL 6622996 (E.D. Pa. Dec. 2018), also concluded that the FCC's 2003 Order and its 2008 Declaratory Ruling were invalidated by ACA International. The FCC has sought comment (covered here) on how it should define an ATDS in light of the ACA decision.


  • Court affirms grant of summary judgment enforcing an electronically signed loan agreement. In Alliant Credit Union v. Abrego, 2018 WL 6918862 (Ct. of App. Washington, Div. 1, Dec. 31, 2018), the court affirmed the trial court's grant of summary judgment to the plaintiff, finding no factual dispute existed as to whether the defendant's electronic signature on loan documents was forged. Recognizing that electronic signatures are given the same legal status as handwritten signatures under the ESIGN Act, the court described the execution process, which included an email to the defendant's admitted email address to initiate the process and the requirement that the defendant correctly answer 18 security questions, including prior street addresses, past vehicles owned or leased and information about her relatives, before presenting her with the loan documents for electronic signature. The electronic signature platform's records showed that the defendant authenticated this security protocol and electronically signed the loan documents. The court held, "The electronic execution of this [loan] agreement, whether completed by Abrego personally or by her "business partners" using information only Abrego could have provided, does not alter its enforceability."
  • Court overturns grant of motion to dismiss for lack of jurisdiction based on electronic agreement. In Designs for Health, Inc. v. Miller, 187 Conn. App. 1 (2019), the plaintiff's sole basis for the exercise of personal jurisdiction over defendant, a California resident, in the Connecticut courts, was that the defendant electronically signed an agreement containing a forum selection clause. The defendant denied signing the agreement. The court determined that the plaintiff made a prima facie case showing that the court had personal jurisdiction over the defendant by presenting a copy of an agreement between the plaintiff and defendant, which contained a mailing address admittedly used by the defendant, and which was allegedly electronically signed by "Mark Miller" via an email address acknowledged as operated by the defendant.


M. Tank and D Whitaker, "Trends in electronic signatures: strategies for addressing risk using biometric data," a white paper for Wacom.


On December 5, 2018, M. Tank and D. Whitaker presented an MBA webinar entitled "Update on Remote Online Notarization."