D.C. Circuit Court of Appeals’ TCPA Ruling Is a Mixed Bag

Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP

On March 16, 2018, the D.C. Circuit Court of Appeals issued its long-awaited Telephone Consumer Protection Act (TCPA) opinion in ACA International v. Federal Communications Commission, a consolidated appeal of the FCC’s July 10, 2015, TCPA Declaratory Ruling and Order. While the D.C. Circuit Court of Appeals upheld the FCC’s approach to revocation of consent for autodialed calls and exemption for time-sensitive healthcare calls, the opinion sets aside the FCC’s interpretation of the type of telephone equipment that constitutes an “autodialer” and vacates the FCC’s approach to calls to reassigned numbers.

The opinion should have major implications for TCPA litigation concerning the definition of an autodialer and provides some clarification for compliance with the TCPA’s revocation of consent scheme. The opinion, however, creates more uncertainty regarding calls to reassigned numbers.

The petitioners in ACA International challenged four aspects of the FCC’s 2015 TCPA Declaratory Ruling and Order:

  • The types of telephone equipment that constitute an autodialer for purposes of the TCPA;
  • Whether a call to a reassigned number violates the TCPA;
  • How a party who previously consented to autodialed calls can revoke consent; and
  • The scope of the FCC’s narrow exemption for certain healthcare-related calls.

In its opinion, the D.C. Circuit Court of Appeals struck down the FCC’s expansive definition of what types of telephone equipment constitutes an autodialer for purposes of the TCPA. Citing current FCC Chairman Ajit Pai’s dissenting opinion to the FCC’s 2015 Declaratory Ruling and Order, the court noted that the FCC’s interpretation encompassed any and all smartphones—which are now nearly ubiquitous.  The court stated that the “TCPA cannot reasonably be read to render every smartphone an [autodialer] subject to the Act’s restrictions,” and accordingly found that the FCC’s interpretation was arbitrary and capricious.

In addressing calls to reassigned numbers, the court also set aside the FCC’s one-call, post-reassignment safe harbor and the FCC’s treatment of reassigned numbers more generally.

The TCPA does not prohibit autodialed calls to cells phones “made with the prior express consent of the called party” (47 U.S.C. § 227 (b)(1)(A)(iii)). While the FCC interpreted “called party” to refer to the person actually reached, the petitioners in ACA International contended that the “called party” actually means the person the caller expected to reach—an interpretation which would limit liability for calls to reassigned numbers.  The court sided with the FCC, finding that the FCC could permissibly interpret “called party” to mean the person subscribing to the called number at the time the call is made.  While the opinion appears to further limit what is not an autodialer, it does very little to define what is an autodialer.  Accordingly, this issue will likely continue to be the subject of litigation, as the courts work through the uncertainty over what is and is not an autodialer.

The court, however, went further, striking down as arbitrary the FCC’s safe harbor for just one call to a reassigned number before TCPA liability is imposed. The court noted that the FCC could not justify why a caller’s reasonable reliance on a previous subscriber’s express consent only extended to one call, making the rule arbitrary. Because striking down the one call safe harbor would result in a more severe and strict liability regime for calls to reassigned numbers—which the court did not think the FCC would have intended—the court set aside the FCC’s treatment of reassigned numbers as a whole.

Next, the court upheld the FCC’s approach to revocation of consent, which allows a called party to revoke consent at any time and through any reasonable means (rejecting industry requests for an interpretation that would allow callers to prescribe an exclusive means for revocation of consent). The court’s opinion, however, appears to support the caller’s creation of clearly defined and easy-to-use revocation processes as a means to limit some of the uncertainty of what methods of revocation are considered reasonable. To this end, the court noted that the FCC’s ruling absolves callers of any responsibility to adopt revocation procedures and systems that would entail “undue burdens,” but does not go so far as to define what might constitute an “undue burden.”

The court also noted that the FCC’s ruling does not address revocation procedures contractually agreed upon by the parties. Accordingly, the court stated that nothing in the FCC’s ruling “should be understood to speak to parties’ ability to agree upon revocation procedures.”

Lastly, the court upheld the scope of the FCC’s exemption of certain healthcare-related calls from the TCPA’s prior-consent requirement for calls to wireless numbers. Rite Aid challenged the scope of the FCC’s exemption on the grounds that it conflicted with the Health Insurance Portability and Accountability Act (HIPAA) and was arbitrary and capricious. The court held that HIPPA does not conflict with or supersede the TCPA and that the FCC’s interpretation was reasonable.

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Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP on:

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