On Thursday, the United States Supreme Court agreed to review the question of what type of dialing equipment qualifies as an “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA). The Court’s review arises from a challenge to the Ninth Circuit’s broad definition of ATDS. The plain language of the TCPA states that an ATDS is “equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” 47 U.S.C. § 227(a)(1). Since the D.C. Circuit abrogated the Federal Communications Commission (FCC) rulings construing that language, see ACA International v. FCC, 885 F.3d 687, 701 (D.C. Cir. 2018), a split has emerged among the federal circuit courts that have examined the definition. The Ninth and Second Circuits have held that a dialing system need only have the capacity to “store numbers to be called” and “to dial such numbers automatically” to constitute an ATDS. See Duran v. La Boom Disco, Inc., 955 F.3d 279, 283-84 (2d Cir. 2020); Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052-53 (9th Cir. 2018). The Third, Seventh, and Eleventh Circuits, on the other hand, have reined in the definition of ATDS. These courts have held that a system cannot constitute an ATDS where it lacks the capacity either to (1) store telephone numbers to be called using a random or sequential number generator, or (2) produce telephone numbers to be called using a random or sequential number generator. See Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 464, 469 (7th Cir. 2020); Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301, 1310 (11th Cir. 2020); Dominguez v. Yahoo, Inc., 894 F.3d 116, 119-21 (3d Cir. 2018).Read More
On Monday, the United States Supreme Court issued a decision upholding the broad prohibition against autodialed calls to cells phones under the Telephone Consumer Protection Act (TCPA) but ruling that a 2015 exception, which had allowed autodialed calls for the purposes of collecting federally-backed debts such as student loans and mortgage debts, violated the First Amendment. Thus, the Court held that the exception is invalid and must be severed from the statute. Under Section 227(b)(1)(A)(iii) of the TCPA, it is unlawful to “make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice” to a cell phone. See 47 U.S.C. § 227(b)(1)(A)(iii). In 2015, Congress passed an exception that permitted autodialed calls “made solely to collect a debt owed to or guaranteed by the United States.” Id. A number of political and nonprofit organizations, seeking to make autodialed calls to cell phones for political purposes, filed suit seeking to invalidate Section 227(b)(1)(A)(iii) in its entirety on the basis that the 2015 exception impermissibly favored government debt-collection speech over political and other speech in violation of the First Amendment of the Constitution. The plaintiffs reasoned that the 2015 exception “undermine[d] the credibility” of the government’s interest in consumer privacy and that if Congress no longer had a genuine interest in consumer privacy, then the underlying 1991 robocall restriction is no longer justified and is thus unconstitutional.Read More
In Duran v. La Boom Disco, Inc., the Second Circuit adopted a broad definition of an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). The Second Circuit joined the Ninth Circuit, further deepening the circuit split on the definition of ATDS with the Third, Seventh, and Eleventh Circuit.Read More
UPDATE: Since our original publication, the Federal Communication Commission issued interpretive guidance on applicability of the emergency purpose exclusion, discussed below.
In the current environment, companies face a need to communicate with customers and patients about the impact that coronavirus (“COVID-19”) will have on their ability to provide goods and services. Companies should be aware of how the Telephone Consumer Protection Act, 42 U.S.C. §. 447 et seq. (the “TCPA”) may impact their calling and texting practices. This alert discusses certain exemptions to the TCPA that may allow companies to continue to contact clients and customers through automated and prerecorded phone calls and texts regarding the COVID-19 outbreak. Businesses can and should continue to contact clients as needed, with carefully tailored messages, to provide necessary updates regarding the COVID-19 pandemic.Read More
On Saturday, March 7, 2020, Governor Andrew Cuomo declared a disaster state of emergency in the State of New York based on the COVID-19 outbreak. One significant consequence is that under a newly-enacted law, unsolicited telemarketing calls to New York residents are now prohibited during a state of emergency.Read More
The Seventh Circuit recently acted to limit the definition of “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). In Gadelhak v. AT&T Services, Inc.,  the court ruled that a dialing system that “neither stores nor produces numbers using a random or sequential number generator,” but rather “exclusively dials numbers stored in a customer database,” “is not an ‘automatic telephone dialing system’ as defined by the Act.” In construing the definition of ATDS narrowly, the Seventh Circuit joined the interpretation adopted by the Third and Eleventh Circuits and rejected the Ninth Circuit’s differing interpretation.Read More
In Golan v. FreeEats.com d/b/a ccAdvertising et al., the Eighth Circuit recently affirmed a trial court’s decision to reduce a TCPA judgment by approximately 98% on the grounds that an aggregate award of approximately $1.6 billion was unreasonable and disproportionate to the offense, and therefore unconstitutional. In so holding, the Eighth Circuit deviated from long-standing case law rejecting constitutional challenges to the amount of statutory damages allowed under the TCPA. If the Eighth Circuit’s analysis is adopted more widely, it could bring a needed measure of rationality to awards under the TCPA.Read More
Last week, in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., Case No. 17-1705 (2019), the Supreme Court declined to decide the level of deference that courts must afford the Federal Communications Commission (the “FCC”), finding that the answer may depend on resolution of two preliminary issues that had not been decided by the lower courts. The matter has been remanded to the Court of Appeals for the Fourth Circuit. In declining to reach the issues presented, the Supreme Court leaves open the crucial question of whether courts are bound by the FCC’s interpretation of the Telephone Consumer Protection Act (“TCPA”).Read More
The Consumer and Governmental Affairs Bureau of the Federal Communications Commission (the “FCC”) recently issued a public notice seeking comment on issues related to interpretation and implementation of the Telephone Consumer Protection Act (the “TCPA”). The notice followed the recent decision of the United States Court of Appeals for the District of Columbia in ACA International v. FCC, in which the Circuit Court affirmed and vacated in part a rule previously issued by the FCC. Our prior coverage of ACA International can be found here.
First, the FCC seeks comment on the TCPA definition of “automatic telephone dialing system.” The TCPA defines an automatic telephone dialing system as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” The FCC had previously interpreted the term “capacity” to include a device “even if, for example, it requires the addition of software to actually perform the functions described in the definition.” The ACA International Court set that definition aside—finding that the agency’s “capacious understanding of a device’s ‘capacity’ lies considerably beyond the agency’s zone of delegated authority” and that it would have “the apparent effect of embracing any and all smartphones.” The FCC seeks comment on how to interpret “capacity” in light of the guidance provided in ACA International, specifically seeking comment on how to more narrowly interpret the word “capacity” to better comport with congressional findings and the intended reach of the statute.
The FCC further seeks comment on the functions a device must be able to perform to qualify as an automatic telephone dialing system. The FCC seeks comment on whether equipment can be considered an automatic telephone dialing system if the equipment cannot itself dial random or sequential numbers. And the FCC seeks comment on whether the prohibition on making certain calls using an automatic telephone dialing system should apply to equipment that has the ability to use such technology but does not actually use it in making the call.
Second, the FCC seeks comment on how to treat calls to reassigned wireless numbers under the TCPA where the statute carves out calls “made with the prior express consent of the called party” from its prohibitions. The FCC seeks comment specifically on the definition of “called party:” does it refer to the person the caller expected to reach (or reasonably expected to reach) or the person that the caller actually reached, i.e., the wireless number’s present-day subscriber? Further, does it include the “customary user” (e.g., the close relative on a subscriber’s family calling plan)?
Third, the FCC seeks comment on how a called party may revoke prior express consent to receive robocalls. The ACA International Court found that (1) “a party may revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller,” and (2) such a standard means “callers . . . have no need to train every retail employee on the finer points of revocation” and have “every incentive to avoid TCPA liability by making available clearly-defined and easy-to-use opt-out methods.” The FCC now seeks input on what, if any, opt-out methods exist that would be sufficiently clearly defined and easy to use such that “any effort to sidestep the available methods in favor of idiosyncratic or imaginative revocation requests might well be seen as unreasonable” for unwanted calls (i.e., saying “stop calling” in response to a live caller, offering opt-out through a website, or responding with “stop” to unwanted texts; and whether callers must offer all or some combination of such methods to qualify).
Fourth, the FCC seeks renewed comment on two pending petitions for reconsideration of the FCC’s Broadnet Declaratory Ruling, in which the FCC determined that the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions. The petitions seek reconsideration of the FCC’s interpretation of “persons” under the TCPA, and clarification of whether federal government contractors, regardless of their status as common-law agents, are “persons” under the TCPA. The FCC now seeks comment on whether contractors acting on behalf of federal, state, and local governments are “persons” for purposes of the TCPA.
Fifth, the FCC seeks renewed comment on the pending petition for reconsideration of its 2016 Federal Debt Collection Rules, which seeks reconsideration of several aspects of the rules, including the applicability of the TCPA limits on calls to reassigned wireless numbers. Referring to the holding in ACA International, the FCC seeks renewed comment on “this and other issues” raised by the petition.
Comments are due by June 13, 2018 and reply comments are due by June 28, 2018.
This public notice, along with recent congressional hearings considering legislation applicable to telephone calls (previously discussed here), demonstrates that in the wake of ACA International, the laws and regulations applicable to outbound calling will continue to evolve.