The Court of Appeals for the District of Columbia today issued its long-awaited ruling on a lawsuit filed more than 30 months ago by ACA International against the Federal Communications Commission. The thrust of the ruling is:
We uphold the Commission’s approach to revocation of consent, under which a party may revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller. We also sustain the scope of the agency’s exemption for time-sensitive healthcare calls.
We set aside, however, the Commission’s effort to clarify the types of calling equipment that fall within the TCPA’s restrictions. The Commission’s understanding would appear to subject ordinary calls from any conventional smartphone to the Act’s coverage, an unreasonably expansive interpretation of the statute. We also vacate the agency’s approach to calls made to a phone number previously assigned to a person who had given consent but since reassigned to another (nonconsenting) person. The Commission concluded that calls in that situation violate the TCPA, apart from a one-call safe harbor, regardless of whether the caller has any awareness of the reassignment. We determine that the agency’s one-call safe harbor, at least as defended in the order, is arbitrary and capricious.
A copy of the ruling can be accessed here.
The FCC had made the changes in a Declaratory Ruling issued in July 2015. Upon issuing its order, the agency was sued by ACA International for overstepping its constitutional authority. Arguments in the case were heard in October 2016 and the industry has been anxiously awaiting this ruling since then.
In issuing the Declaratory Ruling, the FCC made four pronounced changes to the TCPA.
- The agency broadened the definition of what constituted an automatic telephone dialing system (ATDS) to include any technology that has the “capacity” to perform the functions of an autodialer.
- The agency implemented a one-call safe harbor for organizations when contacting an individual’s cell phone number.
- The FCC expanded how individuals can revoke consent to be contacted.
- The FCC exempted certain calls from autodialer provisions that were placed under the category of healthcare treatment.
Judge Sri Srinivasan, who was nominated to the D.C. Appeals Court by former President Barack Obama, authored the opinion.
In deciding that any software or technology that has the present or future capacity to be turned into an autodialer should be deemed as such, the FCC overreached, the Appeals Court ruled.
Imagine, for instance, that a person wishes to send an invitation for a social gathering to a person she recently met for the first time. If she lacks prior express consent to send the invitation, and if she obtains the acquaintance’s cell phone number from a mutual friend, she ostensibly commits a violation of federal law by calling or sending a text message from her smartphone to extend the invitation. And if she sends a group message inviting ten people to the gathering, again without securing prior express consent from any of the recipients, she not only would have infringed the TCPA ten distinct times but would also face a minimum damages recovery against her of $5,000.
The FCC’s expansion of what constitutes an ATDS “lies considerably beyond the agency’s zone of delegated authority,” the court ruled.
In the end, then, the Commission’s order cannot reasonably be understood to support the conclusion that smartphones fall outside the TCPA’s autodialer definition: any such reading would compel concluding that the agency’s ruling fails arbitrary-and-capricious review. The more straightforward understanding of the Commission’s ruling is that all smartphones qualify as autodialers because they have the inherent “capacity” to gain ATDS functionality by downloading an app. That interpretation of the statute, for all the reasons explained, is an unreasonably, and impermissibly, expansive one.
The other major compliance burden that the FCC’s ruling placed on collection agencies was the one-call safe harbor. The Court set aside the FCC’s safe harbor, saying was “arbitrary” and “capricious.”
The Commission thus 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 Commission, though, gave no explanation of why reasonable-reliance considerations would support limiting the safe harbor to just one call or message. That is, why does a caller’s reasonable reliance on a previous subscriber’s consent necessarily cease to be reasonable once there has been a single, postreassignment call? The first call or text message, after all, might give the caller no indication whatsoever of a possible reassignment (if, for instance, there is no response to a text message, as would often be the case with or without a reassignment).
Individuals can determine the manner in which they choose to revoke consent to be contacted, the FCC ruled in 2015 and the Appeals Court upheld today, as long as the manner was deemed to be “reasonable.”
Both ACA International and the FCC can choose to appeal the portions of the ruling that went against them. There was no immediate word from either party that indicated whether an appeal would be filed.
AccountsRecovery.net will continue to update this breaking story as it analyzes the 51-page ruling.