(Breaking News) Customer Alert: D.C. Circuit Court Vacates Part of 2015 TCPA Declaratory Ruling

by | Mar 20, 2018 | Compliance Alerts, Compliance Blog Posts | 0 comments

Please be aware that today the D.C. Circuit issued a significant, long anticipated Telephone Consumer Protection Act (TCPA) decision, relating to the  Federal Communications Commission (FCC)’s Declaratory Ruling approved on June 18th, 2015.  Following the FCC’s Declaratory Ruling, several industry groups, including the Association of Credit and Collection Professionals (ACA International) filed suit to challenge the validity of the FCC’s 2015 Ruling, particularly relating to the broad definition of Automated Telephone Dialing Systems (ATDS or ‘autodialers’), reassigned numbers, and revocation of consent.  The following is a summary of today’s industry win ruling:

  • Definition of Automated Telephone Dialing System (ATDS):  Vacated. In the 2015 Ruling, the FCC formally expanded the definition of an ATDS to keep up with ‘changes in technology design.’  ATDS was defined as any equipment that ‘has the capacity, even with some modification, to dial random or sequential numbers…even if the caller is not currently or presently dialing random or sequential phone numbers but is instead calling a set list of numbers.”  RULING:  Vacated.  The FCC adopted an expansive interpretation of ‘capacity,’ having the apparent effect of embracing any and all smartphones:  the device used by the majority of U.S. citizens to make calls and send messages.  It is undisputed that essentially any smartphone, with the addition of software can gain features of an ATDS.  Applying the broad definition of capacity to include potential or future capacity, thus making all smartphones an ATDS has “eye-popping sweep.”  The FCC’s interpretation would extend a law originally aimed to deal with hundreds of thousands of telemarketers into one constraining hundreds of millions of everyday callers.  The FCC’s interpretation of capacity in the statutory definition of ATDS is “utterly unreasonable in the breadth of its regulatory inclusion.”    The FCC’s most recent efforts to address questions on what qualifies as an ATDS falls short of reasoned decision-making in offering no meaningful guidance to affected parties in material aspects on whether their equipment is subject to the statute’s autodialer restrictions.  The court found the 2015 Order lacked clarity about which functions qualify a device as an autodialer, which compounds the unreasonableness of the Commission’s expansive understanding of when a device has the ‘capacity’ to perform the necessary functions; therefore, the court set aside the FCC’s broad definition of an ATDS.
  • Consent Calls to Reassigned Numbers ‘Safe Harbor’.  The 2015 Order created a one-call safe harbor, allowing a single call to a telephone number if a number has been reassigned before facing liability.  RULING:  Vacated.  When a consenting party’s cell phone number has been reassigned to another person and an autodialer call is placed to someone else who has not provided his consent, the FCC created an arbitrary standard of a one-call, post-reassignment safe harbor.  Under the 2015 Order, the caller, and not the called party, bears the burden of demonstrating: (1) that he had a reasonable basis to believe he had consent to make the call, and (2) that he did not have actual or constructive knowledge of reassignment prior to or at the time of this one-additional-call window.   The court set aside the FCC’s interpretation on the ground that the one-call safe harbor is arbitrary and capricious.  “The FCC outlined a number of measures callers could undertake ‘that over time, may permit them to learn of reassigned numbers.’ But the FCC acknowledged that callers ‘may nevertheless not learn of reassignment before placing a call to a new subscriber,’ and that the first post-reassignment call likewise might give no reason to suspect a reassignment.  In that event, a caller’s reasonable reliance on the previous subscriber’s consent would be just as reasonable for a second call.”
  • Revocation of Consent.  The FCC 2015 Order clarified that consumers have the explicit right to revoke consent under the TCPA by ‘any reasonable way.’  RULING:  Upheld. 
  • Limited Exemption for Time-Sensitive Healthcare Calls.  The FCC permitted specific exemptions to permit ‘robocalls,’ such as reminders to refill a prescription and to notify consumers of possible fraud on their credit card.  RULING:  Scope of Exemption Upheld.

To learn more on how the DC Circuit case may impact your business, please schedule a one-on-one meeting with a member of our Privacy Consulting Team by calling 866.366.6822.

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