The world of the TCPA is marked by constant flux and 2018 proved to be a particularly fluctuating year as the TCPA yo-yo'ed between positive court decisions, alarming legal enforcement against violators of the TCPA, and on-going debates surrounding key TCPA statutes. With all that has happened, identifying this past year's TCPA highlights and extracting each of their compliance lessons may be daunting. The TCPA Defense Force has compiled a countdown list of the top ten TCPA news stories from 2018 to encourage compliance preparedness and give foresight into the year ahead.

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10 – Record Breaking Fines

In 2018, the Federal Communications Commission doled out fines and civil forfeiture orders against serial robocallers and call spoofers for TCPA violations in the hundreds of millions dollars.

In May, the FCC approved an order imposing $120 million in penalties against Mr. Adrian Abramovich who made calls using a practice known as “neighbor spoofing.” Neighbor spoofing hides the caller’s real telephone number and displays a fake telephone number in the recipient’s local area code to encourage the recipient to answer the spam call.

And in September, the FCC proposed a $37.5 million fine against an Arizona-based company for making similar spoofed sales calls. These actions signal the increased attention that is being paid to TCPA violations and why your company’s compliance with the statute is more important than ever before.

9 - Eighth Circuit Examines Whether TCPA Damages in Class Actions May Violate Due Process

On December 12, 2018, the Eighth Circuit Court of Appeals heard oral argument in a case that could have far-reaching implications for the TCPA.

The case captioned Ron Golan v. FreeEats.com, Inc. examines the question of whether the TCPA’s statutory damages of $500 per message can be unconstitutional when applied in the context of class action litigation. The case stems from a call made using a recorded message from former Governor Mike Huckabee to promote a movie titled Last Ounce of Courage during the 2016 presidential election.

After concluding that there was liability for the calls, District Judge Richard Weber determined that damages of $1.6 billion – which is what the statute called for – produced a result that “wholly disproportionate to the offense” and was, therefore, unconstitutional as applied.

The District Court then reduced the damages to $32.4 million, which was $10 per call. During oral argument at the Eighth Circuit, at least one of the Judges expressed skepticism that the Supreme Court would accept the Plaintiff’s argument that the District Court had no authority to reduce the $1.6 billion award. If the District Court’s decision to reduce the damages is upheld, it would create important new precedent that could significantly alter how companies assess TCPA exposure in future cases.

8 - Stopping Bad Robocalls Act and The Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act

Number 8 on the List are several new pieces of legislation introduced in the United States Congress which would amend the TCPA, including the Stopping Bad Robocalls Act and the TRACED Act.

The Stopping Bad Robocalls Act proposed to amend the TCPA to, among other things, define a “robocall” to include calls or text made using equipment that stores telephone numbers to be called, which would have codified a new, very broad definition of the term, eliminating the FCC’s power to decide the issue. It would also have guaranteed a consumer the right to revoke consent at any time and in any manner, which again would have limited the ability of the FCC to debate this issue.

Meanwhile, the TRACED Act would amend the TCPA to, among other things, (i) require voice service providers to adopt call authentication technology; (ii) expand TCPA enforcement powers to the other federal agencies like the DOJ and CFPB; and (iii) allow the FCC to impose civil penalties of up to $10,000 per call against violators who intentionally disobey telemarketing restrictions.

The nature of these proposed amendments to the TCPA are important because, while trying to toughen enforcement of the TCPA, do nothing to address the abusive, predatory litigation tactics that face American businesses.

7- Multiple courts uphold text “STOP” to opt out

Taking the number 7 spot are text message opt-out evader lawsuits.

Opt out evaders avoid opting out of SMS campaigns by not following simple opt-out instructions as provided by the sender (such as “Reply STOP to stop receiving messages”). Often, they send convoluted responses that do not clearly convey a desire to opt-out. Then, they sue for subsequent messages, alleging that the sender did not have their consent to text.

The Seventh Circuit in Franklin v. Express Text, LLC and the Ninth Circuit in Epps v. Earth Fare have both affirmed the consumer is not allowed to ignore clear opt-out instructions from the sender. The sender can designate an exclusive means of opting out.

In Rando v. Edible Arrangements, a New Jersey district court held that opt-out plaintiffs can state a claim only if (1) the required method makes it difficult or impossible for the consumer to revoke, and (2) plaintiff’s non-compliant method of revocation was reasonable given the totality of circumstances.

6- Kavanaugh Supreme Court confirmation

2018 saw the highly publicized, controversial nomination and eventual confirmation of Supreme Court Justice Brett Kavanaugh.

On the TCPA Defense Force blog, we speculated about how Justice Kavanaugh’s prior opinions, writings, and even his admiration for the late Justice Antonin Scalia could affect his approach to issues that come before the Supreme Court – particularly those surrounding the TCPA and judicial deference to federal regulatory agencies. And, as we will discuss later in the countdown, this prediction is already proving to be true.

5 - Reassigned numbers database

Coming in at number 5 we have the issue of reassigned numbers database.

Squeaking in right before the year’s end, the FCC unanimously voted to adopt its proposed order mandating the creation of a comprehensive reassigned number database.

Beyond establishing a single, comprehensive reassigned number database that will enable callers to verify whether a telephone number has been permanently disconnected or reassigned, the final order creates a very limited safe harbor provision that will protect callers from TCPA liability.

4 - Text messages classified as “Information Service”

Taking the number 4 spot in our countdown is the FCC’s declaratory ruling classifying SMS and MMS text messages as information services as opposed to telecommunications services.

A telecommunications service classification would have prevented carriers from blocking text messages, including those they consider to be spam. But, by classifying text messages as an information service, the FCC gives carriers the legal right to block text messages and censor text content without running afoul of government regulation.

Whether carriers will use this new ruling to simply block automatic spam texts, block competitors’ texts, or even stifle free speech, will certainly be an issue to keep an eye on in 2019.

3 - Supreme Court Agrees to Hear Cases Involving Agency Deference

Taking the number three spot, as briefly mentioned in Number 6, the Supreme Court granted certiorari review in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., a TCPA case relating to unsolicited fax advertisements. . In short, the Supreme Court will decide whether lower courts are bound to follow the FCC’S legal interpretation of the TCPA under the Hobbs Act or whether the lower courts are free to apply their own understanding of the statutory language.

The Supreme Court has also granted cert in a second case, Kisor v. Wilkie, which will examine a deference doctrine known as Seminole Rock or Auer deference. Combined, these two cases could fundamentally transform the interplay between courts and federal regulatory agencies in the United States, shifting more power to the courts and away from executive branch agencies.

2 – ATDS Interpretation Debate

This year’s runner up, is the debate over what constitutes an automated telephone dialing system (ATDS) under the TCPA.

The TCPA defines an ATDS as: “equipment which has the capacity…to store or produce telephone numbers to be called, using a random or sequential number generator[,] and... to dial such numbers.”

In Marks v. Crunch San Diego, LLC, the Ninth Circuit found the statutory definition of an ATDS was ambiguous. By applying its own interpretation of the statute, it essentially redefined the TCPA.

The court found the term “ATDS” means equipment that has the capacity to (1) store numbers to be called OR (2) to produce numbers to be called, using a random or sequential number generator – and to dial such numbers.

By finding that an ATDS includes equipment that merely stores numbers to be called, the Ninth Circuit essentially incorporated ordinary smartphones back into the definition of an ATDS – A problem that the Court in our #1 spot sought to resolve and it created a split in the Courts.

1 – D.C. Circuit Court Decision

The biggest news in TCPA this year is that the D.C. Circuit’s long awaited decision in ACA International v. FCC.

First and foremost, the Court set aside the FCC’s “expansive” definition of an ATDS – which like the subsequent decision in Marks, was broad enough to include cell phones. As a result of this ruling, we’ve seen an avalanche of court opinions coming out in different ways on what is or is not an ATDS.

Next, the D.C. Circuit struck down the FCC’s ruling on reassigned numbers on that basis that the “one-call safe harbor” was arbitrary and capricious.

Third, on the issue of revocation of consent, the D.C. Circuit upheld the FCC’s order that revocation can be effectuated by “any reasonable means.”

And finally, the court upheld the FCC’s exemption from TCPA liability for certain health care related calls.