Appeals Court Strikes Down Key Portions Of FCC's Onerous TCPA Rulemaking

Author:Mr Matthew L. Knowles, Daniel Gottlieb and Matthew R. Cin
Profession:McDermott Will & Emery
 
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Summary

Last week, the US Court of Appeals for the DC Circuit issued a long-awaited decision on an omnibus challenge to the FCC's interpretation of the TCPA. While the decision provides some relief for businesses, it does not eliminate the prospect of TCPA liability and leaves important TCPA interpretive questions unresolved. Businesses should continue to be vigilant regarding consent and opt-out procedures when sending automated text messages and automated or pre-recorded calls to consumers.

In Depth

On March 16, 2018, the United States Court of Appeals for the DC Circuit issued a long-awaited decision on an omnibus challenge to the Federal Communications Commission's (FCC's) interpretation of the Telephone Consumer Protection Act (TCPA). The court struck down two key portions of the FCC's 2015 Declaratory Ruling and Order as arbitrary and capricious, while rejecting challenges to other portions of the 2015 Order.

Overall, the decision is good news for those frustrated by the FCC's expansive (and at times confusing) application of the TCPA. It struck down the FCC's definition of "automatic telephone dialing system" (ATDS, or autodialer) and the FCC's ruling on reassigned telephone numbers from the 2015 Order. However, the court left in place the FCC's rulings on revocation of consent and the exigent health care exemption for certain calls.

This decision will provide some relief from the most aggressive arguments that TCPA plaintiffs have wielded to spur large settlements and should encourage the FCC to tread more carefully before departing from bounds of the plain language of the statute. But—as usual in TCPA jurisprudence—important questions remain open, and clients that use automated texting or calling to communicate with their customers or patients should not let their guard down.

Issue 1: The Definition of "Automatic Telephone Dialing System"

With limited exceptions, the TCPA requires prior express consent before making a call to a wireless number using an ATDS or a pre-recorded/artificial voice. The question of what constitutes an ATDS is critical when analyzing potential TCPA liability.  

The TCPA defines an 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 the 2015 Order, the FCC declared that a phone may qualify as an ATDS merely because it could be updated or configured so as to store or produce numbers and then dial them. This is a stunningly broad interpretation that could render almost any modern telephone system an ATDS.

In analyzing the FCC's position,...

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