A group of ten democratic senators led by Senator Edward Markey joined in a letter to the FCC urging it “not to weaken the privacy protections” contained in the Telephone Consumer Protection Act (TCPA) preventing most autodialing calls to landlines and mobile phones.
The senators specifically singled out proposals currently being considered by the FCC that would provide “exemptions from liability when auto-dialers are used to make three calls to a person who has not provided consent” and would “allow industries to send up to three unsolicited texts or calls per day without consent in certain circumstances.” While the proposed changes would certainly relieve some of the burden imposed on companies under the TCPA, the senators criticized the proposals for potentially allowing “disruptive and annoying calls to American consumers.”
The TCPA makes it unlawful to make a call to a cellular telephone, using an automatic telephone dialing system (ATDS), without the prior express consent of the called party. See 47 U.S.C. § 227(b)(1)(A). Under the TCPA, the term “automatic telephone dialing system” means “equipment that 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.” 47 U.S.C. § 227(a) (1).
The TCPA is increasingly relevant because a growing percentage of calls made to consumers these days are being made to a cell phone. According to a recent Pew Research study , 43% of U.S. adults live in a household with a cell phone but no landline phone. The trend towards abandoning traditional landline phones is even more pronounced with younger generations: almost 70% of adults age 25 – 29 and 65% of adults age 30 – 34 live in a wireless-only household. Even for adults age 35 – 44, the percentage of adults living in a wireless-only household is over 50%.
Litigation under the TCPA—and particularly class litigation—has increased significantly over the last few years, perhaps due to the trend of increasing abandonment of landline phones and the TCPA’s statutory damages scheme. With the increased litigation, the TCPA has come firmly in the spotlight of litigants, Congress, and the FCC. In addition to the proposals noted in the senators’ letter to the FCC, the FCC is also considering multiple petitions requesting clarification or exemptions from the TCPA. These petitions deal with issues such as exemptions from the TCPA’s prior express consent provisions to clarification on calls to reassigned or wrong numbers.
Several of these petitions relate to an issue we previously wrote about: whether the ATDS must have the present capacity to store and dial numbers using a random or sequential number generator, or whether the potential capacity is sufficient to satisfy the statutory definition. In other words, is it enough to find liability under the TCPA if a telephone system has the ability be used as an ATDS, even if it is not actually used in that way?
Several courts have held that a telephone system must have present capacity to store and dial numbers using a random or sequential number generator to fall under the TCPA, rather than just a potential capacity to do so. See, e.g., Hunt v. 21st Mortgage Corp., 2013 WL 5230061 (N.D. Ala. 2013); Gragg v. Orange Cab Co., 995 F. Supp. 2d 1189, 1192–93 (W.D. Wash. 2014). The Court in Gragg v. Orange Cab Co. noted that a “potential capacity” rule would “capture many of contemporary society’s most common technological devices within the statutory definition.” 995 F.Supp.2d at 1193.
Other courts, however, have held that a telephone system has the statutory “capacity” if it potentially is capable of automatically dialing random or sequential numbers, even if it is not actually used in that way or if it must be altered to be capable of doing so. Several courts have construed the 9th Circuit Court of Appeals decisions in Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) and Meyer v. Portfolio Recovery Assocs., 707 F.3d 1036, 1043 (9th Cir. 2012) to hold that potential capacity is sufficient for a telephone system to fall under the provisions of the TCPA. See, e.g., Molnar v. NCO Financial Systems, Inc., No. 13-cv-131, 2015 WL 1906346 (S.D. Cal. April 20, 2015); Jordan v. Nationstar Mortg., LLC, No. 14–cv–0078, 2014 WL 5359000 (N.D. Cal. Oct. 20, 2014).
The present-versus-potential capacity issue demonstrates the challenges facing companies, courts, and the FCC posed by the TCPA. Due the uncertainty created by evolving technology, some TCPA defendants have requested litigation stays until the FCC issues clarification on these issues. Many courts, however, have been unwilling to grant a stay without some indication that an FCC ruling is imminent. See, e.g., Molnar v. NCO Financial Systems, Inc., No. 13-cv-131-BAS (JLB), 2015 WL 1906346 (S.D. Cali. April 20, 2015).
The spotlight on the TCPA will only increase with the senators’ recent letter to the FCC. Companies using telephone systems that may fall under the statutory definition of an ATDS—even systems that have the potential to constitute an ATDS—should continue to monitor the FCC for further developments.