Tag:FCC

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“Grandma, I have [not] been kidnapped”: The FCC Bans AI-Generated Robocalls
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Ninth Circuit Weighs Impact of “Mixed Use” of Wireless Numbers on Do Not Call Regulations
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The FCC Clarifies the Definition of ATDS
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Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders
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Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams
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FCC Votes to Create Reassigned Numbers Database
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District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit
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Bipartisan Bill Introduced In The Senate To Thwart Illegal Robocall Scams
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U.S. Supreme Court To Rule On Hobbs Act Deference To FCC’s TCPA Rules
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In Wake of ACA Int’l, Ninth Circuit Adopts Expansive Definition of ATDS

“Grandma, I have [not] been kidnapped”: The FCC Bans AI-Generated Robocalls

By: Andrew Glass, Gregory Blase, and Joshua Durham

Effective immediately, the Federal Communications Commission (FCC) banned AI-generated phone calls with its recent Declaratory Ruling (the Ruling). Known as audio or voice “deepfakes,” AI can be trained to mimic any person’s voice, resulting in novel scams such as grandparents receiving a call from their “grandchild” and believing they have been kidnapped or need money for bail. FCC Commissioner Starks deemed such deepfakes a threat to election integrity, recalling that just recently, “potential primary voters in New Hampshire received a call, purportedly from President Biden, telling them to stay home and ‘save your vote’ by skipping the state’s primary.”

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Ninth Circuit Weighs Impact of “Mixed Use” of Wireless Numbers on Do Not Call Regulations

By Joseph C. Wylie II, Nicole C. Mueller, Jonathan R. Vaitl

Under the plain language of the Telephone Consumer Protection Act of 1991 (TCPA) and its regulations, only “residential telephone subscribers” have a right of action for violations of the do-not-call registry.1 The issue becomes murky, though, when a number is used for both residential and business purposes. The Ninth Circuit recently addressed this question and concluded that there is no simple answer when determining whether a mixed-use line is “residential” but, instead, requires a fact-intensive inquiry into each individual number.2

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The FCC Clarifies the Definition of ATDS

By Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie II, Molly K. McGinley, and Hollee M. Boudreau

The Federal Communications Commission (FCC) recently issued a declaratory ruling on a petition seeking clarification of the definition of an “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.  In its order, the FCC ruled that a text messaging platform that requires a person to actively and manually dial a recipient’s number and transmit those messages, and that lacks the capacity to transmit more than one message without a person manually dialing each number, is not an ATDS under the TCPA.  The FCC concluded such a system does not meet the definition of ATDS because it does not store or produce numbers to be called using a random or sequential number generator and dial such numbers automatically.  See FCC Order ¶¶ 3, 8–12.  Although not expressly stated, the FCC ruling is consistent with prior decisions of the Third, Seventh, and Eleventh Circuit Courts of Appeals, discussed here, specifically in that curating a list of numbers, and then dialing the numbers from that list, is not sufficient to establish the use of an ATDS under the TCPA.  The FCC order may present businesses facing TCPA lawsuits with another basis to challenge the Ninth and Second Circuit Courts of Appeals’ decisions that construed the definition of ATDS more broadly than Third, Seventh, and Eleventh Circuit’s definition.

Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders

Authors: Joseph C. Wylie, Molly K. McGinley, Nicole C. Mueller

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”).

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Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams

By Pamela Garvie, Amy Carnevale, Andrew Glass, Gregory Blase, Joseph Wylie, Molly McGinley, and Hollee Watson

Sen. John Thune (R-SD), member of the Senate Commerce Committee and chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet, and Sen. Ed Markey (D-MA), also a member of the Commerce Committee and author of the Telephone Consumer Protection Act (“TCPA”), recently reintroduced the Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act, S. 151. The TRACED Act is identical to the version as originally introduced in November 2018 (and previously discussed here). The bill seeks to prevent illegal robocall scams and other intentional violations of the TCPA.

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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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District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit

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

A district court in Illinois recently dismissed a lawsuit against Yahoo!, Inc. (“Yahoo”) alleging violations of the Telephone Consumer Protection Act (“TCPA”), reversing its previous decision denying summary judgment. In Johnson v. Yahoo! Inc., Case No. 14-cv-2028 (N.D. Ill. Nov. 29, 2018), the court granted Yahoo’s motion for reconsideration based on recent interpretations of the definition of an automatic telephone dialing system (“ATDS”) under the TCPA, particularly the decision in ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018) (previously discussed here).  In its ruling, the district court rejected prior Federal Communication Commission (“FCC”) pronouncements and adopted a narrow interpretation of ATDS, holding that only a system that actually dials randomly or sequentially generated numbers can be an ATDS.

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Bipartisan Bill Introduced In The Senate To Thwart Illegal Robocall Scams

By Pamela Garvie, Amy Carnevale, Andrew Glass, Gregory Blase, Joseph Wylie, and Molly McGinley

Sen. John Thune (R-SD), chairman of the Senate Commerce Committee, and Sen. Ed Markey (D-MA), a member of the Committee and author of the Telephone Consumer Protection Act (TCPA), recently introduced S. 3655, the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (the TRACED Act), to prevent illegal robocall scams.  In brief, the bill would extend the statute of limitations for the Federal Communications Commission (FCC) to pursue robocall scammers and others who intentionally violate the law, impose additional penalties on such violators, require call authentication and blocking technologies, and establish an interagency working group to explore further ways to prosecute robocallers who intentionally violate the law.

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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.

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In Wake of ACA Int’l, Ninth Circuit Adopts Expansive Definition of ATDS

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

The U.S. Court of Appeals for the Ninth Circuit recently adopted an expansive definition of the term “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  In Marks v. Crunch San Diego LLC, the panel held that, in light of ACA Int’l, the U.S. Court of Appeals for the D.C. Circuit’s landmark decision interpreting certain provisions within the TCPA (previously discussed here) and based on the panel’s own review of the TCPA, the statutory definition of an ATDS includes devices that store telephone numbers to be called, whether or not the device has the ability to generate numbers randomly or sequentially.  In so holding, the Ninth Circuit splits from a number of other decisions holding that an essential element of an ATDS is the capacity to generate random or sequential numbers.

The TCPA defines ATDS 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.”  In ACA Int’l, in brief, the D.C. Circuit invalidated the Federal Communications Commission (“FCC”)’s interpretation of two key questions raised by the statutory definition of an ATDS, namely “(i) when does a device have the ‘capacity’ to perform the two enumerated functions; and (ii) what precisely are those functions?”  In so doing, the D.C. Circuit created uncertainty as to what features or attributes of a dialing system would bring it within the scope of the ATDS definition.

Plaintiff Jordan Marks filed suit against Crunch San Diego LLC (“Crunch”) after he joined the gym and received three text messages over a period of eleven months.  Crunch utilized a system called Textmunication.  In this system, phone numbers are captured and stored in one of three ways: an operator of the system can manually enter a phone number into the system; a current or potential customer may respond to a marketing campaign with a text; or a customer may provide a phone number by filling out a consent form on a Textmunication client’s website.  A client of Textmunication can then design a marketing campaign and Textmunication will automatically send the desired messages to the stored phone numbers at a time scheduled by the client.  When Crunch wants to send a text through Textmunication, a Crunch employee logs into the system, selects the recipient phone numbers, generates the content of the message, and selects the date and time for the message to be sent.  The messages are then automatically sent at the appointed time.

Prior to the decision in ACA Int’l, the district court held that Textmunication was not an ATDS because it lacked the present or potential capacity “to store or produce telephone numbers to be called, using a random or sequential number generator” and granted summary judgment for Crunch.  Marks appealed the decision, and following his appeal, ACA Int’l was decided.  The Ninth Circuit then reversed, holding that a system could be an ATDS if it has the capacity to store a list of numbers and call those numbers automatically, even if the system does not have the ability to generate random or sequential lists of numbers.  In doing so, the Ninth Circuit first reviewed the statutory definition of ATDS as set forth by Congress in 1991 and determined that the provision is ambiguous, and, accordingly, that it was appropriate to look to the context and structure of the statutory scheme.  The Ninth Circuit found that Congress intended to regulate devices that make automatic calls, including those devices that make automatic calls from lists of recipients, rather than utilizing a random or sequential number generator.  The Ninth Circuit rejected Crunch’s argument that because the system was not fully automatic, it did not qualify as an ATDS, holding that Congress had been clear that it was targeting equipment that could engage in automatic dialing rather than equipment that operated without any human oversight or contact.  The Ninth Circuit remanded the matter back to the district court for further proceedings.

In addition to the Ninth Circuit, several other courts have discussed the effect of ACA Int’l on the definition of ATDS:

  • In Gonzalez v. Ocwen Loan Servicing, LLC, the Court concluded that a predictive dialer that lacks the capacity to generate random or sequential telephone numbers and dial them, but it does include a predictive dialer that has the “present ability” to do so.
  • In Washington v. Six Continents Hotels, Inc., the Court agreed that ACA Int’l set aside not only the FCC’s 2015 ruling but also the FCC’s historic treatment of which devices qualify as an ATDS. 16-3719, 2018 WL 4092024, at *3 (C.D. Cal. Aug. 24, 2018)  The Court then determined that the complaint adequately alleged the use of an ATDS by claiming that the defendant “acquired Plaintiff’s number, stored it in a database connected to its telephonic or computer system . . . [the system] . . . has the capacity to generate random numbers . . . has the capacity to generate sequential numbers . . . [and] has the capacity to store and dial the random or sequential numbers it generates just like it stored and dialed Plaintiff’s number.”  Id.

  • In Heard v. Nationstar Mortg. LLC, the Court held that a system that could and did store customer information for at least 24 hours and did not have the capacity to store or produce telephone numbers to be called using a random or sequential number generator fell within the definition of ATDS. 16-694, 2018 WL 4028116, at *5-6 & n.2 (N.D. Ala. Aug. 23, 2018).
  • In King v. Time Warner Cable Inc., the Second Circuit determined that qualification as an ATDS was limited to those devices that were “capable at the time of use” of performing the functions of an autodialer, absent any modifications to the device’s hardware or software. 849 F.3d 473, 476–77 (2d Cir. 2018).
  • In Dominguez ex rel Himself v. Yahoo, Inc., the Court held that, absent any evidence that the device had the capacity to generate random or sequential telephone numbers and dial those numbers, the plaintiff failed to show that the text messaging system was an ATDS in light of ACA Int’l. 894 F.3d 116, 119 (3d Cir. 2018).

Given the split among courts on how to interpret ATDS, uncertainty will continue to prevail until there is additional clarification, either from the Supreme Court or the FCC.  The FCC has requested further comment from the public regarding the interpretation of the TCPA in light of this decision.

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