Here are answers to many of the Frequently Asked Questions arising from the DC Circuit’s decision in ACA International.
1. TCPA R.I.P.?
No. The DC Circuit struck down two of the FCC’s most controversial rules—the expansive definition of autodialer and the rules regarding calls to reassigned numbers—but ultimately the decision raises more questions than it answers. Although two of the old rules are gone, the decision leaves it to the FCC to fashion new rules. The court resoundingly rejected some of the expansive interpretations from the Obama-era FCC but simultaneously acknowledged that the FCC continues to enjoy broad discretion in setting the scope of new rules, including on the definition of autodialer/ATDS. Further, even after ACA International, many key aspects of the TCPA remain in place, including restrictions on prerecorded calls, standards for prior express consent and prior express written consent, and statutory damages for violations.
2. What is an “automated telephone dialing system” (ATDS)?
That’s still not clear. Although the court struck down the FCC’s definition, which was so broadly written that it encompassed virtually every smartphone in the country (making every man, woman and child a potential TCPA violator), the decision does not immediately put a new definition into place. Unfortunately, this means there will continue to be a lack of clarity about what qualifies a device as an autodialer. For example, it is unclear whether a device is an ATDS if it can only dial from a list of numbers, or whether an ATDS must also have the capacity to generate numbers. Nor is it clear what level of human intervention involved in placing a call will disqualify a device as an ATDS. Until the FCC promulgates new rules, parties in litigation should look to the plain language of the statute (see below).
3. Is a predictive dialer an ATDS?
We expect this to be one of the most hotly disputed issues in any new FCC rulemaking process. Under the plain language of the statute, an ATDS must have “the capacity . . . to store or produce telephone numbers to be called, using a random or sequential number generator.” For many years, FCC rules have suggested that the capacity to dial from a list of numbers is sufficient, and FCC rules going back more than ten years have indicated that a predictive dialer is an autodialer. The DC Circuit struck down the FCC rules on these matters, but did not answer underlying question: “Does a device qualify as an ATDS only if it can generate random or sequential numbers to be dialed, or can it so qualify even if it lacks that capacity?” The court suggested that the FCC may have authority to adopt either interpretation, as long as the rules are clear.
4. Can a manually dialed call violate the TCPA?
On this question, the 2015 TCPA Order was expansive: any call, even if manually dialed, could be a potential autodialing violation if the call were placed using a system with the potential “capacity” to make automated calls, even if the autodialing feature was not used and arguably even if system lacked the present capacity to autodial. This issue was not raised in the ACA International appeal, but the DC Circuit wrote several paragraphs highlighting problems with the FCC’s standard. Quoting from one of the dissents from the 2015 TCPA Order, the court suggested that the FCC consider limiting the reach of the TCPA to calls actually made using autodialing features. Expect the FCC to consider this issue when it looks at this matter anew.
5. How is the FCC likely to define ATDS going forward?
This is an open question, but it seems to be a virtual certainty that the new definition will be more narrowly tailored than the 2015 TCPA Order. Current FCC Chairman Ajit Pai and Commissioner Michael O’Rielly, both of whom dissented from the 2015 TCPA Order, are now in the majority, and they both issued statements immediately following the DC Circuit’s decision applauding the decision and indicating a desire to trim the expansive scope of the TCPA.
Will they curtail the scope of the TCPA significantly and open up the rules for placing calls to consumers? It’s possible. But the politics are also important. Consumers are already disgusted with robocalls, so more permissive calling rules could result in a political blowback if consumers feel an increase in unwanted call volume. Expect the FCC to attempt to balance the competing interests of protecting consumers from unwanted calls while also creating more workable compliance rules for businesses that are acting in good faith.
6. What’s the rule on calling reassigned cell phone numbers?
As with the rules on ATDS, the DC Circuit opinion struck down the FCC rule, leaving a potential vacuum in its place. Under the old FCC rule, an ATDS call to a cell phone could not be made without the consent of the “called party.” “Called party” was defined as the current subscriber of the phone number rather than the intended recipient and person who may have initially provided consent. The result was that a call to a reassigned cell phone number was a violation of the TCPA since the “called party” was not the party who provided consent. In the 2015 TCPA Order, the FCC created a one-call safe harbor exception to this rule: callers could place a single call, free from TCPA liability, to a reassigned cell phone number to find out if the current subscriber (the “called party” is the same person who originally provided consent). The safe harbor expired, however, even if the subscriber did not answer the phone or the caller otherwise had no way of knowing that the number had been reassigned. This unworkable standard was compounded by an intractable compliance problem for callers arising from an absence of reliable methods to track reassignments.
The court set aside, for now, not only the one-call safe harbor for calls to reassigned numbers, but also the concept that the new subscriber is the “called party” when the caller was attempting to call someone else. Although this broader rejection of the FCC’s standard is generally helpful to business, the absence of clear rules in the short term creates a potential risk. Even before the FCC adopted its 2015 rules, several courts of appeal had interpreted the TCPA as imposing potential liability for calls to reassigned cell phone numbers, and without any safe harbor. Until the FCC weighs back in with a rule governing reassigned cell numbers, the courts may apply their own interpretation of the statute and the consent provisions of the TCPA.
7. How will the FCC address the issue of reassigned cell phone numbers?
The FCC is already considering a system for tracking reassigned numbers that will enable businesses to identify reassigned cell phone numbers and update their customer information. On the issue of TCPA liability for calls to reassigned cell phone numbers, the FCC could go in several directions. It could define “called party” as the “intended recipient,” which would mean that calls to reassigned numbers would not run afoul of the TCPA if the caller had consent from the prior subscriber. Or it could establish a more limited safe harbor and good faith exception for calls to reassigned numbers in situations where the caller had no practical way to identify the reassignment prior to call.
In the interim, there are a number of court decisions—including several that predate the 2015 TCPA Order—that hold that calls to reassigned cell numbers do violate the TCPA. We hope that the FCC will move quickly to address the uncertainty for businesses making calls in good faith to their own customers.
8. Does a company still have to accept an opt-out request by any means, i.e., can the consumer revoke consent in many ways?
The court upheld that FCC rule that a consumer may revoke consent by any reasonable means, and that callers cannot unilaterally prescribe the methods for opting out. But the court also suggested that there must be reasonableness limits. If a caller makes available “clearly-defined and easy-to-use opt-out methods,” then it would be unreasonable for consumers to make “idiosyncratic or imaginative revocation requests.” This continues to put the burden on businesses to accept revocations through a variety of channels, but consumers cannot opt out through unreasonable means.
9. Can a consumer’s right to opt out be limited by contract?
The DC Circuit kept the window open to permit businesses to impose contractual terms that define the manner in which consumer may opt out. The court stated that its decision “does not address revocation rules mutually adopted by contracting parties” and “nothing in the Commission’s order thus should be understood to speak to parties’ ability to agree upon revocation procedures.” As for broader restrictions on opt-outs, several courts have held that consent is irrevocable if a term of contract.
10. How does this ruling impact pending litigation?
It will depend on the issue in dispute in individual cases. By striking down the 2015 TCPA Order, the court created a void with respect to certain TCPA rules. In those instances the plain language of the statute should arguably govern, along with prior court authorities that predated the rules. Partiess should consider whether it makes sense to litigate under existing precedent, or whether they should seek a stay of their cases pending development of new rules at the FCC.
Bonus Q&A: When will the DC Circuit’s opinion become final?
Although the FCC is unlikely to continue the litigation, the decision is not final until the court issues a mandate. A petition for rehearing would need to be made within 45 days (given that the US government is a party), and assuming no such petition is filed, the mandate would be issued within seven days thereafter, or May 7, 2018. Alternatively, either side could seek a stay of the mandate and file a petition for certiorari to the US Supreme Court within 90 days of the decision, here June 14, 2018, or within 90 days of an en banc decision, should one be issued.