Category: FCC Roundup

COVID-19: UPDATED Emergency and Healthcare Calls and Texts
FCC Votes to Create Reassigned Numbers Database
U.S. Supreme Court To Rule On Hobbs Act Deference To FCC’s TCPA Rules
FCC Seeks Comment on TCPA Following D.C. Circuit’s Decision in ACA International
Trade Groups Petition the FCC to Adopt a Narrow Interpretation of Autodialer Under the TCPA
District Court Decertifies TCPA Class Following Invalidation of Solicited Fax Rule
It Wasn’t Me! – District Court Dismisses TCPA Action Alleging Vicarious Liability against Hotel Chains
D.C. Circuit Holds that FCC Lacks Authority to Require Opt-Out Notices for Solicited Faxes, Vacates FCC Order
Federal Government Not Successful in Moving to Dismiss First Amendment Challenge to TCPA
FCC Begins Rulemaking Process to Allow Blocking of “Spoofed” Number Calls

COVID-19: UPDATED Emergency and Healthcare Calls and Texts

Authors: Joseph C. Wylie IIMolly K. McGinley, and Nicole C. Mueller

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.

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FCC Votes to Create Reassigned Numbers Database

By: Joseph C. Wylie, Molly K. McGinley, and Nicole C. Mueller

            The Federal Communications Commission (the “FCC”) has adopted new rules (set forth in its Second Report and Order) to establish a single, nationwide database with information provided by phone companies that will allow callers to determine whether a number has been permanently disconnected and is therefore eligible for reassignment. The FCC also voted to provide a safe harbor from liability for any calls to reassigned numbers caused by database error. The database will be administered by a private company to be determined through a competitive bidding process. The FCC also voted to provide a safe harbor from liability for any calls to reassigned numbers caused by database error.  The database will be administered by a private company to be determined through a competitive bidding process. 

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U.S. Supreme Court To Rule On Hobbs Act Deference To FCC’s TCPA Rules

By Joseph C. Wylie II, Molly K. McGinley, and Lexi D. Bond

             On November 13, 2018 the U.S. Supreme Court granted certiorari in a Telephone Consumer Protection Act (“TCPA”) case in which the Fourth Circuit vacated the district court’s holding that an unsolicited fax sent by a health information provider offering a free e-book must have a commercial goal to be considered an advertisement under the TCPA.  This case presents important questions as to the scope of judicial deference to the Federal Communication Commission’s (“FCC”) rules under the Hobbs Act, which limits the ability of TCPA litigants to challenge FCC rules in private civil litigation.

In February of this year, the Fourth Circuit held that faxes that offer goods and services, even if the goods and services are free, are “advertisements” under the TCPA, and reversed the district court’s dismissal of the suit.  See Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459, 469 (4th Cir. 2018).  In so ruling, the Fourth Circuit took issue with the district court treatment of a 2006 Rule promulgated by the Federal Communications Commission the FCC interpreting certain provisions of the TCPA.  Pursuant to its statutory authority to “prescribe regulations to implement the requirements” of the TCPA, see 47 U.S.C. § 227(b)(2), the FCC promulgated a rule providing that “facsimile messages that promote goods or services even at no cost . . . are unsolicited advertisements under the TCPA’s definition.”  See Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991; Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25,967, 25,973 (May 3, 2006) (the “2006 Order”).  In the district court, plaintiff Carlton & Harris argued that the fax it received was an unsolicited advertisement as defined in the 2006 Order because it promoted a good at no cost.  Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, No. 3:15-14887, 2016 WL 5799301, at *4 (S.D. W. Va. Sept. 30, 2016).  The district court declined to defer to the 2006 Order, holding that the Hobbs Act did not compel the court to defer to “the FCC’s interpretation of an unambiguous statute.”  Id.  The district court further held that even under the 2006 FCC Rule, PDR Network’s fax was still not an advertisement because the rule requires an advertisement to have a “commercial aim,” and no such aim existed.  Id. Accordingly, it granted PDR Network’s motion to dismiss.

The Fourth Circuit disagreed, holding that the jurisdictional command of the Hobbs Act requires a district court to apply FCC interpretations of the TCPA. See Carlton & Harris Chiropractic, 883 F.3d at 469. The district court therefore erred by engaging in Chevron analysis and “declin[ing] to defer” to the FCC rule and issuing a ruling “at odds with the plaining meaning” of the 2006 Order’s text.  Id. at 462.  Thereafter, PDR Network appealed to the Supreme Court asserting that the Fourth Circuit opinion created a circuit split with the Second, Sixth, Ninth, and Eleventh Circuits, all of which require a “commercial” nexus for faxes promoting free goods or services to be considered “advertisements” under the TCPA.

PDR Network’s petition for a writ of certiorari asks the Supreme Court to resolve the Circuit split regarding whether the Hobbs Act prevents courts from engaging in a typical Chevron analysis of FCC Orders interpreting the TCPA and requires automatic deference to the agency’s order where there has been no challenge to the validity of the order.  It also asks the Court to resolve whether the FCC’s 2006 Order creates a per se rule that faxes that “promote goods and services even at no costs” are “advertisements” under the TCPA or whether courts can require a commercial nexus to a firms’ business in order for such a fax to fall within the definition of “advertisement.”  In granting certiorari, the Supreme Court said it is limiting the certiorari to the question of whether the Hobbs Act required the lower court to accept the FCC’s legal interpretation of the TCPA.

FCC Seeks Comment on TCPA Following D.C. Circuit’s Decision in ACA International

By Joseph Wylie, Molly McGinley, Andrew Glass, Greg Blase, Pamela Garvie, Amy Carnevale, and Nicole Mueller

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.


Trade Groups Petition the FCC to Adopt a Narrow Interpretation of Autodialer Under the TCPA

By: Andrew C. Glass, Gregory N. Blase, Joseph Wylie, Molly McGinley, Pamela Garvie, Amy Carnevale, Roger L. Smerage, and Hollee M. Watson

A coalition of trade groups recently petitioned the Federal Communications Commission (the “Commission”), urging it to adopt a narrow interpretation of “Automated Telephone Dialing System” (“ATDS” or, commonly, “autodialers”) under the Telephone Consumer Protection Act (“TCPA”). The petition, filed on behalf of the U.S. Chamber of Commerce and other trade associations, follows the March 2018 decision of the U.S. Court of Appeals for the D.C. Circuit that vacated several key elements of the Commission’s 2015 TCPA Order. ACA Int’l v. Fed. Comm. Comm’n, 885 F.3d 687, 692, 701 (D.C. Cir. 2018).  Among other things, the D.C. Circuit set aside the Commission’s 2015 interpretation of what constitutes an ATDS.  The court held that the Commission’s interpretation of the term ATDS was “unreasonably expansive” and “‘offer[ed] no meaningful guidance’ to affected parties in material respects on whether their equipment is subject to the statute’s autodialer restrictions.”  Because of the limited scope of the matter before it, the D.C. Circuit did not itself interpret the term ATDS, but instead provided guidance for the Commission as to how the term should be defined.

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District Court Decertifies TCPA Class Following Invalidation of Solicited Fax Rule

Joseph C. Wylie, Molly K. McGinley and Nicole C. Mueller

A district court recently decertified a class of plaintiffs seeking damages after the judge ruled that recent changes in the Telephone Consumer Protection Act (the “TCPA”) warranted decertification.  In particular, the court ruled that under the “Solicited Fax Rule,” the question of consent required individualized analysis, and rejected the plaintiff’s argument that solicited faxes require the specific opt-out language required by TCPA regulations.

Plaintiff Lawrence S. Brodsky, an insurance wholesaler, filed a lawsuit against HumanaDental Insurance Company (“HumanaDental”) following the receipt of two identical one-page fax messages sent by Humana Specialty Benefits.  Plaintiff has “market agreements” with numerous insurance companies in which he sells those companies’ products through various insurance agents and independent contractors.  Plaintiff entered one such contract with Humana Insurance Co. “and all of their affiliates,” which stipulated that Plaintiff agreed that Humana Insurance Co. and all of its affiliates “may choose to communicate with [Plaintiff] through the use of . . . facsimile to the . . . facsimile numbers of” Plaintiff.  In connection with this agreement, Plaintiff provided Humana Insurance Co. with his facsimile number.

Following the denial of HumanaDental’s motion for summary judgment, the court granted HumanaDental’s motion for class certification in part and certified a class of entities who received one or more faxes between May 2007 and September 2008 that named Humana Specialty Benefits or HumanaDental on the bottom of the fax and, among other items, contained an “opt out” notice that stated “If you don’t want us to contact you by fax, please call 1-800-U-CAN-ASK,” or “If you don’t want us to contact you by fax, please call 1-888-4-ASSIST.”  Plaintiff argued that these faxes violated the TCPA because they did not contain the proper “opt out” language.

The Solicited Fax Rule

The TCPA prohibits sending “unsolicited advertisements” via fax, and a fax is “unsolicited” if the recipient has not given its prior expression invitation or permission to receive the fax.  The TCPA provides select exceptions to the ban on unsolicited faxes if, among other things, the fax contains an “opt-out notice” that meets various statutory requirements.  In 2006, the Federal Communications Commission (the “FCC”), pursuant to its authority to prescribe regulations to implement the requirements of the TCPA, promulgated the “Solicited Fax Rule,” which required both solicited and unsolicited faxes to include the opt-out notice described in the TCPA.  In other words, the FCC’s 2006 rule mandated that senders of solicited faxes comply with a statutory requirement that applied only to senders of unsolicited faxes.

In October 2014, the FCC granted certain non-party petitioners retroactive waivers of the Solicited Fax Rule in light of inconsistencies between the Solicited Fax Rule and other FCC guidance (the “2014 Order”).  The FCC also explicitly invited “similarly situated” parties to apply for other retroactive waivers.  (Prior discussion on this blog regarding the Solicited Fax Rule waivers can be found on this blog here.)

HumanaDental applied for and received such a waiver.  The waiver explicitly excused HumanaDental for any failure “to comply with the opt-out notice requirement for fax advertisements sent with the prior express invitation or permission of the recipient prior to April 30, 2015.”

Following the 2014 Order, several fax senders filed petitions for review of the FCC’s decision in multiple circuit courts.  These petitions were consolidated into an action pending in the District of Columbia Circuit.  In March 2017, a split panel of the D.C. Circuit struck down the Solicited Fax Rule in Bais Yaakov v. FCC, No. 14-1234 (D.C. Cir. Mar. 31, 2017) holding it “unlawful to the extent that it requires opt-out notices on solicited faxes.”  The majority found that the TCPA only applies to unsolicited fax advertisements, such that the FCC lacked the authority to promulgate a rule governing solicited faxes.

HumanaDental’s Motion to Decertify Class

Following HumanaDental’s receipt of a waiver from the FCC and the D.C. Circuit’s decision in Bais Yaakov, HumanaDental moved to decertify the class, arguing that individual questions defeat the superiority and predominance requirements of Rule 23, such that the class must be decertified.  The court agreed that the presence of the FCC waiver led to the conclusion that issues of individualized consent predominated, finding that: (1) a substantial portion of the certified class were not a parties to the same contract that Plaintiff entered into with Humana Insurance Co.; (2) select members of the class may have revoked their consent even after entering into such a contract; and (3) the “scope” of a particular consent in the contract might not extend to other “affiliated” class members offering insurance at the same location.  The court noted by way of example that while Plaintiff was a party to the contract, at least seven other individuals had his permission to use his fax machine during the time period at issue; questions regarding whether those other individuals had consented to receiving faxes from HumanaDental would “consume[] and overwhelm[]” trial.

In so holding, the court rejected Plaintiff’s argument that the waiver, while insulating HumanaDental from an administrative enforcement action with the FCC, had no effect in a private TCPA action.  Plaintiff relied on a single authority for its position, but the Court rejected that decision’s analysis and noted that the case had been “called into question by a number of authorities cited by Defendant” and sided with the caselaw cited by Defendant.

With regard to the application of Bais Yaakov, the Court also declined to adopt Plaintiff’s argument that the case was inconsistent with the Seventh Circuit’s decision in Holtzman v. Turza.  Specifically, the court found that, at best, dicta from that decision could be read to expand the TCPA’s requirements relating to opt out notices to cover solicited as well as unsolicited faxes, but declined to afford Turza “a reading that would improperly expand the TCPA.”

The Court concluded that the waiver and Bais Yaakov bring the question of consent back into the picture.  This decision provides defendants with a stronger argument for defense against motions to certify classes in instances where the communications in question include solicited communications.

Plaintiff has appealed this decision to the Seventh Circuit.

It Wasn’t Me! – District Court Dismisses TCPA Action Alleging Vicarious Liability against Hotel Chains

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Matthew T. Houston

A Michigan federal district court recently rejected a theory of vicarious liability under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). In Kern v. VIP Travel Services, the court concluded that the plaintiffs failed to state a claim against hotel chains for calls independent travel agents allegedly made to generate reservations at the hotels. See generally Op., Kern v. VIP Travel Servs., Case No. 1:16-cv-00008 (W.D. Mich. May 10, 2017). Accordingly, the court dismissed the putative class action. Read More

D.C. Circuit Holds that FCC Lacks Authority to Require Opt-Out Notices for Solicited Faxes, Vacates FCC Order

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller                     

The U.S. Court of Appeals for the District of Columbia Circuit, in a 2-1 split decision, has issued an opinion that the Federal Communications Commission (the “FCC”) lacked authority under the Telephone Consumer Protection Act (“TCPA”) to regulate facsimiles that were sent with the recipient’s consent. [1]  This opinion found that an FCC rule issued in 2006 (the “2006 Order”) requiring a sender to include an opt-out notice on faxes that were solicited by the recipient was unlawful and vacated the FCC order implementing the rule. [2]

To view the full alert on K&L Gates HUB, click here.

Federal Government Not Successful in Moving to Dismiss First Amendment Challenge to TCPA

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, and Michael R. Creta

A North Carolina federal district court recently denied a motion by the federal government to dismiss claims raising a First Amendment challenge to a portion of the Telephone Consumer Protection Act (“TCPA”). See American Ass’n of Political Consultants v. Lynch, Case No. 5:16-00252-D (E.D.N.C.). At this early stage of the case, the government did not address the substance of the constitutional challenge.  Rather, the government asserted that the court did not have jurisdiction over the case and that the political organizations which filed the suit did not have standing to maintain suit.  The court, however, rejected the government’s arguments and allowed the case to proceed.


Last year, a bi-partisan coalition of political groups filed a two-count complaint alleging that aspects of the TCPA run afoul of First Amendment free-speech protections. Specifically, the suit contends that the TCPA’s prohibition on making auto-dialed calls or texts to cell phones without the requisite consent, 47 U.S.C. § 227(b)(1)(A)(iii), imposes a content-based restriction on speech that fails to pass strict scrutiny and is unconstitutionally underinclusive.  The federal government moved to dismiss on standing and subject-matter jurisdiction grounds. In response, the plaintiffs amended their complaint to add the Federal Communications Commission (“FCC”) as a defendant and to address purported deficiencies in the original complaint.

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FCC Begins Rulemaking Process to Allow Blocking of “Spoofed” Number Calls

By Pamela J. Garvie, Andrew C. Glass, Joseph Wylie II, Gregory N. Blase, and Matthew T. Houston

The Federal Communications Commission unanimously voted at its March 23, 2017, “open meeting” to begin the process for adopting rules allowing carriers to block “spoofed” number calls.  These are calls that use a reputable or commonly-known telephone number to mask the actual originating number.  The proposed rules would allow carriers to block calls purporting to originate from telephone numbers that (1) are not assigned to a subscriber, (2) are invalid, or (3) are assigned to a subscriber expressly requesting that its number not be spoofed.  In his remarks, Chairman Ajit Pai indicated that the proposed rules are needed to target scammers impersonating federal agencies, such as the Internal Revenue Service, and to protect consumers from unwanted solicitations.  Commissioner Michael O’Rielly indicated that the proposed rules aim to address illegal “robocalls” in a manner that does not affect legitimate businesses, as opposed to prior efforts to regulate such calls under the Telephone Consumer Protection Act, 47 U.S.C. § 227.  The proposed rules and accompanying comments suggest an effort by the now Republican-controlled FCC to issue rules specifically intended to block unwanted robocalls, often from overseas, intended to defraud consumers.

The FCC approved both a Notice of Proposed Rulemaking and a Notice of Inquiry to solicit feedback from consumers and other parties with an interest in the proposed rules. Comments on the proposed rules will be due within forty-five (45) days after publication in the Federal Register. Final rules are unlikely to take effect earlier than late 2017.

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