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December 2015 TCPA Compliance Monitoring Report
On November 25, 2015, ACA International, Sirius XM, Pace, Salesforce.com, ExactTarget, Consumer Bankers Association, U.S. Chamber of Commerce, Vibes Media, and Portfolio Recovery Associates (“Petitioners”) filed a joint opening brief in the consolidated appeal of the Federal Communications Commission’s July 10, 2015 Declaratory Ruling and Order (“Omnibus Order”) in the U.S. Court of Appeals for the D.C. Circuit. (See Joint Brief for Petitioners et al., ACA International et al. v. Federal Communications Commission, No. 15-1211 (filed Nov. 25, 2015); Petitioners’ Joint Unopposed Motion for Briefing Format and Schedule, ACA International v. Federal Communications Commission, No. 15-1211 et al. (filed Sept. 21, 2015)). The Petitioners contend that the Federal Communications Commission’s (“FCC,” or the “Commission”) Omnibus Order essentially was a wholesale revision of the Telephone Consumer Protection Act of 1991 (“TCPA”), and needed to be reversed by the D.C. Circuit for being “arbitrary and capricious” in violation of Section 706 of the Administrative Procedure Act (“APA”).
Specifically, the Petitioners focused their appeal on three key aspects of the FCC’s Omnibus Order:
Definition of an “automatic telephone dialing system” (“ATDS”);
Guidance concerning the reassignment of telephone numbers; and
Revocation of consent standards.
The Petitioners request that the D.C. Circuit grant their petitions, and vacate the challenged aspects of the FCC’s Omnibus Order. The Commission’s answer to the Petitioner’s brief is due January 15, 2016, and the Petitioners must file their reply brief no later than February 24, 2016. However, the Court has yet to schedule oral arguments for the case.
This Advisory will summarize the Petitioners’ appeal of the FCC’s Omnibus Order, and discuss its impact upon businesses subject to the TCPA.
The Petitioners contend that the FCC expanded the definition of an ATDS beyond the scope of Congress’s original intent in the TCPA. The TCPA defines an ATDS as “equipment which has the capacity – (A) to store or product telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” (47 U.S.C. § 227(a)(1)). In the Omnibus Order, the FCC stated that the definition includes devices with either the present or potential capacity to store or produce, and dial random or sequential numbers. The Petitioner’s argued that this broadened definition of an ATDS threatened to impose “crushing liability” upon millions of additional callers as the new definition potentially “turn[ed] even an ordinary smartphone into an ATDS.”
Instead, the Petitioners argued, Section 227(a)(1) limits the ATDS definition to devices that can only presently: (1) generate random or sequential numbers; (2) store or produce such numbers; (3) dial such numbers; and (4) do so in an automatic fashion without human intervention. Thus, the Commission’s broadened definition of an ATDS promulgated by the Omnibus Order violated both the APA and the Due Process Clause for being “vague . . . and internally inconsistent.”
The second issue argued by the Petitioners was the FCC’s new guidance concerning the reassignment of telephone numbers. Generally speaking, the TCPA prohibits calls and texts made using an ATDS. However, one exception to this general prohibition is that such calls are permitted if the call is made “with the prior express consent of the called party.” (47 U.S.C. § 227(b)(1)(A)). In the Omnibus Order, the FCC interpreted Section 227(b)(1)(A)’s reference to “called party” to mean the called phone number’s “current subscriber or customary user,” as opposed to an intended or expected recipient. The Petitioners argued that the FCC’s interpretation of “called party” violated the First Amendment by deterring otherwise lawful communications through the TCPA’s strict liability scheme. Moreover, Commission failed to adequately justify its new interpretation, especially because the TCPA can only be understood if “called party” meant “expected recipient.”
Additionally, the Petitioners argued that the Omnibus Order’s creation of a “one-call” exemption from strict liability under the TCPA was problematic as it would “arbitrarily impose liability for later calls regardless whether the first call provides any reason to believe that the number has been reassigned or that the caller has reached the wrong person.” Furthermore, the Commission’s one-call safe harbor was unworkable because “[t]here is no reliable way to ascertain whether a given . . . number has been reassigned,” and “leaves callers in an impossible situation” as a caller could not possibly have “actual knowledge” of the number’s reassignment based on one call.
Revocation of Caller’s Consent
Finally, the Petitioners argued that the FCC’s ruling that a caller’s consent may be revoked at any time by any means was arbitrarily and capricious for being essentially meaningless and unworkable. The Petitioners pointed out that this new standard allowed revocations to be made in ways that callers would not be able to realize, and was unworkable as “just about every employee [of a caller] who might interact with a customer would have to receive training” as to the multitude of possible ways in which a customer could revoke consent. Furthermore, the Petitioners contended that the Omnibus Order’s prohibition on callers and called parties agreeing to means of revocation violated common law principles of rights to contract – “contradict[ing] the common-law backdrop against which the TCPA was enacted.”
The Petitioners’ appeal is significant to businesses subject to the TCPA’s regulatory jurisdiction as it highlights the broad scope of liability and burdensome compliance requirements imposed by the FCC’s July 10th Omnibus Order. Instead, the Petitioners advocate a balanced, realistic approach in which businesses are able to comply with the TCPA, and that ensures that consumers’ rights are adequately safeguarded.
Our firm will continue to monitor the Petitioners’ appeal of the FCC’s July 10th TCPA Omnibus Order, and will provide an update on the D.C. Circuit’s decision in the case. However, if you have any questions regarding your company’s compliance with the TCPA, please contact Jane Wagner at firstname.lastname@example.org or Seth Williams at email@example.com.