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March 2018 TCPA Compliance Monitoring Report
Last week, the U.S. Court of Appeals for the D.C. Circuit partially overturned the Federal Communications Commission’s (“FCC”) 2015 Telephone Consumer Protection Act (“TCPA”) Omnibus Order. For now, the decision introduces a degree of uncertainty as plaintiffs’ lawyers and district courts have more room to interpret the TCPA. However, the decision will also push the FCC to continue working to reduce unwanted robocalls using the TCPA, including wrapping up several ongoing TCPA proceedings before the agency.
The D.C. Circuit’s decision strikes down the FCC’s expansive definition of an autodialer and its one-call safe harbor for calls made to a reassigned wireless number, but the decision upholds the FCC’s decision to allow a consumer to withdraw consent “at any time and through any reasonable means.” The decision also upholds the FCC’s limited exemption from the TCPA for time-sensitive healthcare related calls.
The Court ostensibly granted the calling industry appellants’ request to overturn the FCC’s expansive definition of an autodialer; however, it remains unclear whether the decision will make outbound calling less risky going forward. For example, the Court took seriously the concern that the FCC’s definition of dialing equipment’s potential capacity could sweep all modern cell phones into the TCPA, but the Court also suggested a potential path forward for the FCC to address the definitional question in dicta.
While the issue was not raised on appeal, the Court hinted that the FCC could reconsider what constitutes using an autodialer to make a call under the TCPA to fix the over-inclusive nature of the FCC’s autodialer definition. By focusing on whether or not a call was made using autodialer functionality, the FCC could narrow the reach of its broad conception of capacity. In other words, the FCC may be able to retain a relatively broad interpretation of the types of dialing equipment (including potentially cell phones) that fall under the TCPA if the agency clarifies that calls made using that equipment only violate the TCPA if the autodialing functionality is used to make the calls. To some extent, the FCC’s human intervention test addresses this issue, but the human intervention test is currently ill-defined. However, if the FCC takes the Court’s decision as an opportunity to revise the definition of an autodialer, it could retain a definition that sweeps most modern dialing equipment into the definition, provided the definition is limited to when autodialing functionality is actually used and not to the millions of everyday calls made without such functionality.
Likewise, the Court’s treatment of the FCC’s interpretation of what it means for an autodialer to use “a random or sequential number generator” may not ultimately reduce risk for callers as much as appellants had hoped. The Court explicitly did not preclude the FCC’s classification of predictive dialers (many of which rely on uploaded number lists instead of generating the numbers they dial) as autodialers. Rather, the Court found that the FCC has variously adopted “competing interpretations” of what it means for an autodialer to generate random or sequential numbers, and the Court held these competing definitions failed to meet the standards of reasoned decisionmaking.
This decision could have significant ramifications. Telemarketers, dialing platforms, and other entities that rely on automated calling have argued that the TCPA only prohibits calls made by equipment that generates random or sequential numbers. This would arguably mean automatically dialing numbers from a list in a database would not fall under the TCPA because the dialing equipment would not generate the called numbers. Such an interpretation would render the TCPA virtually meaningless for modern autodialing campaigns and is, therefore, unlikely to be adopted by the FCC. Nonetheless, the FCC will have to address the Court’s criticism of the FCC’s historical definition of an autodialer.
In addition to rejecting the FCC’s definition of an autodialer, the Court overturned the FCC’s creation of a one-call safe harbor for calls inadvertently made to numbers for which the caller previously had consent to call but had since been reassigned to a new subscriber. While a number of parties appealed the FCC’s decision regarding reassigned numbers, the Court’s decision may actually increase risk for callers in the short term. Before addressing the safe harbor, the Court held that the FCC could reasonably define the called party as the current subscriber of the number, not the intended recipient. However, because the Commission failed to support a one-call safe harbor, as opposed to some other type of safe harbor, the Court rejected the FCC’s safe harbor as arbitrary. Because the Court could not say whether the FCC would have adopted its decision to treat the called party as the current subscriber without the existence of the safe harbor, the Court also overturned the FCC’s decision that the current subscriber is the called party under the TCPA.
The Court’s decision regarding reassigned numbers is important for two reasons. First, for now, there is something of a vacuum surrounding the issue of reassigned numbers under the TCAP, and absent FCC action, plaintiffs may urge district courts to fill that vacuum by adopting a strict liability standard for calls made to reassigned wireless number. Second, the FCC will be under pressure to address this issue now. The FCC had initiated a proceeding prior to the Court’s ruling to consider whether and how it could establish a database for reassigned numbers, and in the wake of the Court’s decision, the FCC adopted a Notice of Proposed Rulemaking in the proceeding on March 22, 2018 specifically proposing a database for reassigned numbers. This database would likely be similar to federal and state do-not-call databases, so callers that routinely scrub numbers from their call lists based on the database would likely not be liable for calling a reassigned number not yet in the database.
Finally, the Court upheld two other aspects of the Omnibus Order. The Court found that the FCC “could reasonably elect to enable consumers to revoke their consent without having to adhere to specific procedures.” Therefore, a consumer may revoke consent at any time using any reasonable means. While this potentially means parties that make a large number of outbound calls will need to train any consumer-facing employee to accept and document consent revocation, the Court suggested that the FCC’s interpretation would incentivize callers to make “available clearly-defined and easy-to-us opt-out methods.”
The Court also upheld the FCC’s limited exemption to the TCPA for healthcare related calls. Rite Aid challenged the FCC’s narrow limitations on the exemption, arguing that the FCC’s exemption was too narrow because it restricted calls permissible under HIPAA. The Court rejected Rite Aid’s challenge because HIPAA and the TCPA provide separate protections; therefore, there was no conflict to comply with both statutes. The Court also noted that Rite Aid’s position would have required the FCC to exempt billing, accounting, advertising, and other calls unrelated to time-sensitive healthcare issues, a result at odds with the goals of the TCPA.
The D.C. Circuit’s decision significantly changes the landscape of the TCPA. It will undoubtedly prompt action by the FCC, so any business the makes or relies on calls made using an automated calling process should closely monitor any new FCC TCPA decisions. If you have any questions about the D.C. Circuit’s decision or how it might impact your business, please do not hesitate to contact Seth Williams, firstname.lastname@example.org, Nate Hardy, email@example.com, or Jane Wagner, firstname.lastname@example.org.