Companies across a spectrum of consumer-facing industries face a continued wave of class action filings under the Telephone Consumer Protection Act (TCPA). In 2017, TCPA lawsuits remained one of the most frequently filed types of class actions in courts across the country, and unsettled law continues to place a compliance burden on companies that communicate with consumers by phone, fax or text. Looking ahead in 2018, the issue looming largest in the TCPA area is the pending and long-awaited ruling from the US Court of Appeals for the DC Circuit in the appeal of the Federal Communications Commission’s (FCC) July 2015 TCPA Omnibus Declaratory Order. Absent clarification of foundational issues, including the definition of autodialer, standards for consent and revocation, and third-party liability, courts and affected companies will continue to grapple with uncertainty surrounding the scope (and even the applicability of) the TCPA.
Here are five issues to watch in 2018.
1. Will the FCC’s 2015 Omnibus Order Survive Legal Challenge?
In October 2016, more than 15 months ago, the DC Circuit heard oral argument in several challenges to the FCC’s 2015 TCPA Order. Aspects under review include the definition of autodialer (see below), the standards for consent and revocation, reassigned cell phone numbers, and issues unique to financial institutions and healthcare providers. The court has yet to issue its ruling.
2. The Definition of Autodialer
Courts continue to struggle to apply this term to the facts of particular cases. The FCC has failed to offer meaningful guidance on what equipment would and would not constitute an autodialer, other than to offer the unhelpful truism that a rotary dial phone probably cannot be converted into an autodialer. The uncertainty over the definition of autodialer affects the scope of the TCPA and creates challenges for businesses using automated communications to ensure compliance and manage litigation risk, especially class action litigation risk.
3. Revocation of consent
In 2017, several courts held that a recipient of an autodialed call may not revoke consent where consent was included as a term in the underlying contract between the recipient and the company placing the calls. The courts reasoned that consumers received consideration in exchange for that consent. This defense could be effective in the right factual circumstances, presuming that more courts adopt its reasoning. It is unclear whether the anticipated ruling by the DC Circuit will impact questions of revocation of consent.
4. Third-Party Liability Issues
Many companies use third-party vendors to assist with communications, or to market their products and services through semi-independent agents, brokers or contractors. As a result, companies may face vicarious liability risk based on the actions of these third parties. Courts continue to apply inconsistent vicarious liability principles in various types of TCPA cases.
5. Will the FCC Revisit the TCPA Rules?
The change in administration in early 2017 brought a shift in power at the FCC. Republicans now hold a 3-2 majority on the Commission under a new Chairman, Ajit Pai, a former member of the Republican minority under the Obama administration. The FCC’s revocation of net neutrality in late 2017 drew significant public attention, but it is unclear what steps the FCC may take to address ongoing issues under the lesser-known TCPA. Pai and fellow commissioner Michael O’Reilly wrote scathing dissents to the 2015 TCPA Order, and they may reconsider the FCC’s positions in favor of a more business-friendly posture.
Conclusion
The wave of TCPA litigation will continue in 2018, and the developments in these key areas will shape the TCPA landscape. With class action plaintiffs’ attorneys targeting many different industries, a strong TCPA compliance program is essential to help businesses of all kinds avoid TCPA lawsuits and potential liability.
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