The Telephone Consumer Protection Act (TCPA) was enacted in 1991 to address the use of the telephone to market goods and services to the home and other businesses. More specifically, Congress made it “unlawful...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...to any telephone number assigned to a...cellular telephone services,” “unless such call is made solely to collect a debt owed to or guaranteed by the United States.” 47 U.S.C. § 227 (b)(1)(A)(iii). The TCPA defines an “automatic telephone dialing system,” i.e., an autodialer, as “equipment which has the capacity – (A) to store and produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”
In 2015, the Federal Communications Commission (FCC) issued a Declaratory Ruling and Order (the Order) in which it attempted to clarify numerous aspects of the TCPA’s general bar against using an autodialer in making unsolicited calls to cell phones. Various regulated entities challenged portions of the order and sought review by the United States Court of Appeals for the District of Columbia Circuit. More specifically, they sought review of four issues addressed in the Order: “(i) which sorts of automated dialing equipment are subject to the TCPA’s restriction on unconsented calls; (ii) when a caller obtains a party’s consent, does a call nonetheless violate the [TCPA] if, unbeknownst to the caller, the consenting party’s wireless number has been reassigned to a different person who has not given consent; (iii) how may a consenting party revoke her consent; and (iv) did the [FCC] too narrowly fashion an exemption from the TCPA’s consent requirement for certain healthcare-related calls.”
On March 16, 2018, the D.C. Circuit released its long-anticipated decision in ACA Int’l v. FCC, no. 15-1211 (D.C. Cir. Mar. 16, 2018) in which ACA International challenged the FCC’s Order. The D.C. Circuit found that Order’s clarification of what qualified as an “autodialer” was too far beyond what the TCPA was intended to cover and that the FCC’s “one-call” safe harbor for calling reassigned mobile numbers was arbitrary and capricious and thus, it vacated those portions of the Order. However, the D.C. Circuit did uphold the portions of the Order that explained that person could revoke consent to be called by any reasonable means and that provided for the scope of the FCC’s exemption for time-sensitive healthcare calls.
The majority of the 51-page opinion focuses on the “autodialer” issue. The D.C. Circuit noted that there are two questions raised in considering what equipment qualifies as an “autodialer” under the TCPA’s definition: “(i) when does a device have the ‘capacity’ to perform the two enumerated functions; and (ii) what precisely are those functions?” The FCC had answered the first question by ruling that a device had the “capacity” to satisfy the TCPA’s enumerated functions if it need only download additional software or an app to satisfy those functions. It was undisputed that almost any smartphone could download software via an app that would allow it to function as an “autodialer” as defined by the FCC.
The D.C. Circuit ruled that the FCC’s interpretation of “capacity” was far too expansive because it would cover any and all smartphones, which are owned and used by the vast majority of citizens to make calls and send messages. As the D.C. Circuit explained, the overreach created by the Order could be seen in the fact that “an uninvited call or message from a smartphone violates the statute even if autodialer features were not used to the make the call or send the message.” According to the D. C. Circuit, “[t]he TCPA cannot reasonably be read to render every smartphone an [autodialer] subject to the [TCPA’s] restrictions, such that every smartphone user violates federal law whenever she makes a call or sends a text message without advance consent.” Thus, the D.C. Circuit found that “the [FCC’s] interpretation of the term ‘capacity’ in the statutory definition of an [autodialer] is utterly unreasonable in the breadth of its regulatory inclusion.” (Quotation omitted).
The D.C. Circuit also went on to address the Order regarding the second question, i.e., what the precise functions were required by the TCPA. The D.C. Circuit found that the Order failed to clarify whether a device qualifies as an autodialer only if it can generate random or sequential numbers to be dialed or if it can qualify even if it lacks such a capacity. According to the D.C. Circuit, while the FCC may permissibly adopt either interpretation, it could not allow both to stand. For example, there were predictive dialers that had no capacity to generate random or sequential numbers and those arguably would violate the TCPA under the Order. Also, the order was found to be unclear about whether a device qualified as an autodialer even if it cannot dial numbers without human intervention. Thus, the D.C. Circuit held that “in describing the function a device must perform to qualify as an autodialer [the FCC’s ruling] fail[ed] to satisfy the requirement of reasoned decision-making.”
The D.C. Circuit next took an interesting step and spent two pages addressing an issue that they could not ultimately examine because it had not been presented to them. The issue they addressed was the effect of the second provision of the TCPA that limited liability to those who “make any call using any” autodialer. The D.C. Circuit noted that even under the FCC’s broad interpretation of capacity, liability could be limited if the statutory phrase “make any call” were interpreted to mean that the device must in fact be used as an autodialer to make the call before there could be a violation of the TCPA. In other words, “the fact that a smartphone could be configured to function as an autodialer would not matter unless the relevant software in fact were loaded onto the phone and were used to initiate the calls or send messages.”
In regard to the one-call safe harbor, the Court determined that the Order was arbitrary and capricious because the FCC gave no explanation why reasonably relying on a party’s consent without knowledge that a consenting party’s cell number has been reassigned supports limiting the safe harbor to a single call. The Court asked, “That is, why does a caller’s reasonable reliance on a previous subscriber’s consent necessarily cease to be reasonable once there has been a single, post-reassignment call?” The Court’s example was a first call or text message that goes unanswered. Why would a caller have any reason to stop calling that number without any additional information? Moreover, the one-call safe harbor applied over an unlimited period of time rather than a given period of time, which is an option the FCC declined to take. Due to the FCC’s unsupported standard, the Court set aside the FCC’s treatment of reassigned numbers as a whole.
Finally, in upholding the FCC’s treatment of revocation of consent, the Court reasoned that the FCC “could reasonably elect to enable consumers to revoke their consent without having to adhere to specific procedures,” though the Court also noted that the ruling “does not address revocation rules mutually adopted by contracting parties. Nothing in the Commission’s order thus should be understood to speak to parties’ ability to agree upon revocation procedures.”
The D.C. Circuit’s ruling provides some hopeful light at the end of the TCPA-liability tunnel for companies regularly calling or messaging its customers or potential customers using devices that are merely capable of being considered an “autodialer” under the TCPA. However, the ruling does little to actually solve the broad and somewhat divergent interpretation of “autodialer” by various courts. While the D.C. Circuit gave some good guidance and arguments about what should qualify as an “autodialer”, and whether the device must actually be used as an “autodialer” and not merely have the capacity to be used as an “autodialer” to violate the TCPA, it did not issue any definitive interpretations of the statute that would require a district court or other circuit court of appeals to follow its reasoning. Instead, the issues now go back to the FCC to try to again “clarify” the interpretation of “autodialer.” The same is true of the handling of reassigned cell phone numbers. The FCC gets to try to clarify how callers should handle making calls to cell phone numbers that have, unbeknownst to the caller, been reassigned to a person who has not consented to the call or message.
If you are interested in discussing how Michael Best can assist you in handling Telephone Consumer Protection Act violations please contact your Michael Best attorney, or Michelle Dama, Michael C. Barnhill, and Albert Bianchi, Jr.