The U.S. Court of Appeals for the D.C. Circuit has overturned parts of the Federal Communications Commission’s 2015 Declaratory Ruling and Order that expanded compliance requirements under the Telephone Consumer Protection Act (TCPA). The Order had been particularly burdensome to companies that send telemarketing and non-telemarketing calls (including text messages and pre-recorded calls) to wireless numbers. The Court’s opinion is here.

The Court rejected the FCC’s expansive interpretation of what type of equipment is considered an automatic telephone dialing system (ATDS). The FCC had considered any equipment to be an ATDS if the equipment has the future “capacity” to dial random or sequential numbers, even if modifications or software updates are required. The Court found that the FCC’s interpretation of capacity was “utterly unreasonable,” and that the FCC’s “understanding would appear to subject ordinary calls from any conventional smartphone to the [TCPA’s] coverage, an unreasonable expansive interpretation of the statute.”

The Court also overturned the FCC’s “one-call” safe harbor for reassigned numbers. The TCPA generally requires that a “called party” provide prior express consent to calls sent using an ATDS or prerecorded voice. The FCC had ruled that a caller could make only one call to a wireless number that had been reassigned to a non-consenting subscriber from a consenting subscriber without incurring TCPA liability. All subsequent calls to that number would violate the TCPA, regardless of whether the caller had knowledge that the number had been reassigned. In essence, the FCC had defined the “called party” as the current recipient of the call, not the intended recipient. Although the Court stated that this interpretation was permissible, it overturned both the “one call” safe harbor and “called party” definition because the FCC had failed to “give some reasoned (and reasonable) explanation of why its safe harbor stopped at the seemingly arbitrary point of a single call or message,” and the two parts of the reassigned number rule were not severable.

The Court upheld the FCC’s requirement that a consumer may revoke his/her consent by any reasonable means – orally or in writing – “that clearly expresses a desire not to receive any further messages.” To the benefit of commercial callers, the Court also verified that nothing in the FCC’s 2015 Order would keep parties from contracting into their own revocation rules.

The Court also affirmed the FCC’s partial exemption from the TCPA’s prior express consent requirement for select non-marketing healthcare-related calls to a wireless device that are not charged to the called party.