Breaking: DC Circuit Court Reverses Key Provisions in FCC’s 2015 TCPA Rules

This morning, the DC Circuit Court reversed several key provisions in the Federal Communication Commission’s 2015 TCPA expansion, including the FCC’s autodialer definition as well as the regulator’s approach to the treatment of consent and reassigned phone numbers. The industry has been waiting for the outcome of the case since it was filed by ACA International within days of the 2015 Declaratory Ruling and Order.  

The case is ACA International, et al., v. Federal Communications Commission. You can read the 51-page Appeals Court decision here.

Two key provisions overturned

The FCC’s 2015 Order insisted that any device that has the present or future capacity to function as an autodialer should be subject to the TCPA. That’s an overreach and an “utterly unreasonable” standard, according to the Circuit Court ruling.

According to the ruling, the FCC’s autodialer definition could be applied to smartphones used every day by millions of Americans – an “eye-popping sweep.”

“It is untenable to construe the term ‘capacity’ in the statutory definition of an ATDS in a manner that brings within the definition’s fold the most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country,” the ruling concludes. “It cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in fact.”

The ruling also reversed the FCC’s standard for reassigned phone numbers.

The current standard, so defined by the FCC in 2015, gives parties a one-call safe harbor when contacting an individual’s cell phone number. The Court finds that one-call standard “arbitrary and capricious.”

The FCC “consistently adopted a ‘reasonable reliance’ approach when interpreting the TCPA’s approval of calls based on ‘prior express consent,’ including as the justification for allowing a one-call safe harbor when a consenting party’s number is reassigned,” the ruling notes. “The [FCC], though, gave no explanation of why reasonable-reliance considerations would support limiting the safe harbor to just one call or message.”

Two key provisions retained

The court ruling also preserved two key provisions in the FCC’s TCPA expansion:

1. The FCC’s approach to revocation of consent, namely, that a party may “revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller;” and
2. The ruling also reinforced the FCC’s exemption for time-sensitive health care calls.

The iA perspective

Time will tell what effect this ruling will have on technology used by the call center industry going forward. It is somewhat ironic that in a world of Alexa, Venmo, self-driving cars, and so many other technology developments, that in this industry, “innovation” has meant stripping all capacity from a piece of software so as to render it like a rotary dial phone. In fact, one of these innovations is known as the “Human Call Initiator” – I swear this sounds like something from the Flintstones.

As many expected, litigation spawned from the FCC’s 2015 Order as it related to the definition of an ATDS. A silver lining for the industry has been that this backwards innovation stood the test of court battle in multiple jurisdictions. insideARM covered these stories:

August 28, 2017 - Another U.S. District Court Rules Human Call Initiator is Not an ATDS – (The case is Arora v. Transworld Systems, Inc., Case No 15-cv-4941, U.S.D.C., Northern District of Illinois, Eastern Division)

February 8, 2017 - U.S. Magistrate Judge in Michigan Rules LiveVox HCI System is Not an ATDS (The case is Smith v. Stellar Recovery Collection Agency, Inc.)

September 6, 2016 - Stellar Recovery, LiveVox Win Major TCPA Victory (The case is Pozo v. Stellar Recovery Collection Agency, Inc., Case No. 8:15-cv-929, United States District Court, Middle district of Florida, September 2, 2016)

Following these cases, insideARM contacted LiveVox (maker of the Human Call Initiator) for comment. Mark Mallah, General Counsel at LiveVox said,

“LiveVox is very excited that our HCI system has now won 4 out of 4 cases, each one in a different circuit. We think that this provides very strong validation for our approach to TCPA risk mitigation and for point and click technology in general. We have always believed that the controls we have in place are more than sufficient to address the TCPA’s challenges, and we are gratified that four different courts agree with us.”

Mr. Mallah offered this comment after today's Order,

“We view the D.C. Circuit Court’s decision as a positive development for the industry and our clients. However, while the FCC’s problematic standard for capacity has been eliminated, uncertainty remains for other major aspects of the TCPA, such as the ongoing absence of a precise definition of an auto-dialer and lack of clarity regarding number reassignment. As such, we continue to advise vigilance in maintaining robust compliance and risk-mitigation strategies.”

We will see whether this ruling from the Appeals court sends technology development in a different direction.

NOTE: insideARM and LiveVox are co-hosting a webinar next Wednesday to provide more insight. Panelists will include David Kaminski of Carlson & Messer and Mark Mallah, Livevox General Counsel. Look out for registration information on Monday.