The D.C. Circuit has now issued a long-awaited decision involving the Telephone Consumer Protection Act (TCPA), which has widespread implications for broadcasters and other media companies that rely on modern calling equipment (including text messaging) to reach their audiences. The decision resolves an appeal of the Federal Communications Commission’s (FCC’s) 2015 Omnibus TCPA Order with a unanimous panel but a split decision on the merits: the Court affirmed the FCC on two issues and vacated on two others. With respect to the three issues of interest to media companies, the Court vacated the FCC’s definition of “automatic telephone dialing system” (ATDS) and its approach to reassigned numbers, while affirming the agency’s approach to consumer revocation of consent to receive autodialed calls.
Three quick takeaways from the Court’s decision are as follows:
1. Definition of Autodialer. The FCC’s 2015 Order had held that the TCPA’s definition of ATDS broadly covers any calling system that had the “capacity” to make autodialed calls, which essentially swept in all smartphones. The Court reversed the FCC on this point, calling the FCC’s approach “utterly unreasonable.” The Court did not offer its own definition and instead remanded the issue to the FCC. However, the Court noted that the tricky definition of “capacity” becomes less important if one focuses on the fact that the TCPA prohibits “mak[ing] any call using any” ATDS. As the Court explained, whether or not equipment is only an ATDS when it has the “present” capacity to generate and store random and sequential number sequences, the TCPA’s prohibition is limited to “making any calls” when ATDS capabilities are in place. If the ATDS capabilities are not present when a call is made, the call is not prohibited under the TCPA. Although no Petitioner raised this issue, Commissioner O’Rielly had raised it in dissent. The Court stated that “[t]he agency could choose to revisit this issue in a future rulemaking or declaratory order,” strongly suggesting that is what the Court would like to see occur.
Takeaway: This is a potentially a significant ruling. The Court signaled that it would be receptive to an FCC construction of the TCPA’s autodialing prohibitions that potentially would exclude from TCPA liability calls made using a wide variety of technologies that the FCC’s prior approach had included, including predictive dialers, preview dialers, or other dialing mechanisms involving human intervention.
2. Reassigned Numbers. The FCC’s 2015 Order adopted a “one call safe harbor” for numbers that are reassigned to different individuals. Under that approach, parties could call a number for which they previously obtained consent that had later been reassigned to another person only once without obtaining consent from the new owner of the number, even if that one call did not provide the caller with knowledge that the number had been reassigned. The Court vacated this one call safe harbor and remanded the issue to the agency. Here again, the Court did not offer a solution, but suggested that the current Commission is already on the right track by requiring carriers to indicate when a number has been reassigned and to populate a reassigned number database with that information.
Takeaway: This ruling is also potentially significant, in that it rejects the idea that calling parties should be deemed to know that they have called a reassigned number even if a single call does not provide them with actual notice that reassignment has occurred. The Court suggested that the FCC has identified a path forward on reassigned numbers with its proposal for a reassigned number database. It remains to be seen, however, whether carriers will be receptive to the Commission’s reassigned number proposal and whether creating such database will be feasible.
3. Opt-out by Any Reasonable Means. The FCC’s 2015 Order held that consumers could revoke their consent to receive autodialed calls “at any time” and “through any reasonable means.” The Court affirmed the FCC’s approach, holding that the FCC’s ruling does not require callers to adopt opt-out tracking systems that impose “undue burdens” or would be “overly burdensome to implement.” In the Court’s view, callers can avoid liability by making available “clearly-defined and easy to use opt-out methods.” And, callers are not subject to liability for any unconventional opt-out method a called party may choose.
Takeaway: Although affirming the FCC, the Court’s ruling should provide some protection to callers from consumers who choose “unconventional” methods of expressing their desire to opt-out of receiving autodialed calls where user-friendly means are available.
(On a fourth issue raised in the appeal, the Court affirmed the FCC’s decision to exempt only a limited subset of healthcare calls from TCPA consent requirements.)
Overall, the D.C. Circuit’s action clears a judicial cloud that has existed for some time over a number of TCPA issues and should enable the FCC to move forward on addressing a number of TCPA issues that have been raised in pending petitions for declaratory ruling. The Court’s remand of the portions of the FCC’s 2015 Order related to autodialers and reassigned numbers also paves the way for the current FCC to reach decisions on these issues that provide additional flexibility and clarity to parties that use modern calling equipment in their businesses.