On Tuesday, December 8, 2020, the United States Supreme Court heard oral argument on 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 granted certiorari to resolve a split among the federal circuit courts of appeals that had construed the meaning of the term. The Ninth Circuit ruling on review had reaffirmed a broad definition of ATDS, but other recent decisions had construed the term more narrowly.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
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.
The Northern District of Illinois recently refused to certify a class in a case brought under the Telephone Consumer Protection Act, 47 U.S. Code § 227 (“TCPA”), on the grounds that the class could not include members who lacked Article III standing, and that determining whether individual class members had standing would lead to a multiplicity of mini-trials. See Christopher Legg et al. v. PTZ Insurance Agency LTD, et al., Case No. 14-C-10043. The decision was based in part on the Court’s finding that class members could not have suffered a concrete injury under Spokeo v. Robins (previously discussed here) if they consented to the calls, irrespective of the TCPA’s requirement that “advertising” calls require express written consent. Thus, the Court granted the defendants’ motion to strike class allegations and denied plaintiffs’ cross-motion to certify a class. Read More
Last week, a bi-partisan coalition of political groups and the federal government completed briefing cross motions for summary judgment in American Association of Political Consultants, Inc., et al. v. Sessions, Case No. 5:16-cv-00252-D (E.D.N.C.). The case challenges the constitutionality of a portion of the Telephone Consumer Protection Act (“TCPA”). The plaintiffs contend 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) (the “cell phone ban”), imposes a content-based restriction on speech that fails to pass strict scrutiny and is unconstitutionally under-inclusive (the plaintiffs’ complaint is discussed here). The government is defending the statute’s constitutionality (previously discussed here).
In their summary judgment briefing, the plaintiffs argued that content-based exemptions to the TCPA’s cell phone ban, such as an exemption for debt collection calls made on behalf of the government, render the cell phone ban unconstitutional. According to the plaintiffs, these exemptions produce outcomes where certain speech is privileged in violation of the First Amendment. In particular, the plaintiffs asserted that the exemptions fail to withstand strict scrutiny because they are not narrowly tailored to further a compelling governmental interest by the least restrictive means available. Further, the plaintiffs rejected the government’s suggestion of severing the disputed exemptions because such action would not curb the power of Congress or the Federal Communications Commission (“FCC”) to promulgate future content-based exemptions.
The government responded to the plaintiffs’ arguments by asserting that the TCPA’s cell phone ban is a content-neutral “time, place, and manner regulation” concerned with restricting the method of calling cell phones, but not the content of those calls. Alternatively, the government asserted that even if the TCPA was found to be a content-based restriction on speech, it would nonetheless survive strict scrutiny because it serves a compelling governmental interest in protecting consumer privacy, is narrowly tailored, and lacks a comparable alternative. The government also argued that the court should not consider certain FCC orders providing exemptions to the TCPA’s cell phone ban because such orders do not call into question the constitutionality of the TCPA itself. Finally, the government argued that should there be a finding that the government-debt exemption is unconstitutional, the court should sever that provision from the cell phone ban and leave the remainder of the TCPA intact.
Although we cannot predict how the court will decide the cross motions for summary judgment, it is significant that the court is set to rule on a broad challenge to the TCPA’s constitutionality. K&L Gates LLP will continue to monitor the case and post developments as they occur.
K&L Gates recently published its Global Government Solutions 2011 Annual Outlook, which contains articles from around the firm on key governmental developments expected in 2011.
The Annual Outlook includes an article addressing developments affecting the Telecom, Media and Technology sector in 2011 by DC partners Marc Martin and Marty Stern, noting that the TMT sector enters 2011 with significant regulatory uncertainty and the FCC facing an uphill battle on many signature regulatory initiatives.
The article reviews the FCC’s net neutrality order and the challenges it faces in court and on Capitol Hill, discusses the recent FCC and Department of Justice approvals of the Comcast/NBCU transaction, and a number of additional issues getting significant focus in 2011. These include retransmission consent battles between broadcasters and cable/DBS providers and the FCC’s expected rulemaking proceeding on this issue, the Commission’s implementation of new communications accessibility requirements under the new 21st Century Communications and Video Accessibility Act, and continued efforts to reform the Universal Service Fund and make it broadband-centric.
Recent leaks to the New York Times, as reported in September and October, indicate that the Obama administration will next year be pushing for sweeping expansions of the Communications Assistance for Law Enforcement Act (CALEA). CALEA facilitates government surveillance by, among other things, requiring companies subject to the law both to design their systems so that the government can easily plug in and intercept communications in real-time and to provide assistance to the government in these efforts.
A task force comprised of representatives from DOJ, Commerce, the FBI, and other agencies, are discussing amendments to the law. These changes would greatly expand the reach of CALEA, would significantly increase the costs of non-compliance for covered companies, and would include other requirements which may fundamentally change business models for companies promising encryption and decentralized communication services.
You can access the free webcast by clicking here (free registration is required).
K&L Gates partner Marty Stern joined co-host Jim Baller, together with guests Cecilia Kang, Communications Industry Journalist, the Washington Post, Gigi Sohn, President, Public Knowledge, Jeffrey Silva, Senior Policy Director, TMT, Medley Global Advisors, and Scott Cleland, President, the Precursor Group, for a lively and provocative review of 2010, particularly of the day-old FCC net neutrality decision, and for some bold predictions for 2011.