The nation breathed a little easier last Friday when the D.C. Circuit ruled that Americans can call or text from their smartphones without violating federal law. That’s because the D.C. Circuit has set aside the Federal Communications Commission’s definition of what constitutes an “autodialer,” a definition that, before last Friday, included the ubiquitous device half of you are using right now to read these words. And since we use these devices to keep in touch, the FCC’s definition – carried to its logical extreme – could have led to liability under the Telephone Consumer Protection Act (TCPA) for almost every unsolicited call or text using a smartphone.  The FCC’s overly expansive definition is no more, however, because the D.C. Circuit ruled in a long-awaited opinion that it was arbitrary and capricious.

The FCC had said that a device with the potential capacity to store and dial telephone numbers using a random number generator was an “automated telephone dialing system” covered by the TCPA. That definition caused the TCPA to “assume an eye-popping sweep,” wrote the D.C. Circuit, since just about every smartphone has the potential (either straight from the factory or when the right app is downloaded) to perform those functions. As a result, “nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact” because, under the FCC’s “autodialer” definition, “every uninvited communication from a smartphone infringes federal law.” The D.C. Circuit recognized that Congress never intended the TCPA to “constrain [the activities of] hundreds of millions of everyday callers,” so the FCC’s “autodialer” definition could not stand.

The FCC had also said that callers who violated the TCPA by autodialing a reassigned cell-phone number had one chance to learn that they were not actually reaching the person who consented to receiving such calls, whether or not that one call was answered or produced any information as to reassignment. The D.C. Circuit’s opinion also set aside this one-call “safe harbor” as arbitrary and capricious. Although the FCC permissibly interpreted the TCPA’s use of the term “called party” to mean the current subscriber, the court found no justification for why a caller’s “reasonable reliance” on prior consent should “necessarily cease to be reliable” after only one call (or text) regardless of the result of the call. A failure to respond to a text, the D.C. Circuit recognized, or a call that goes to a generic voicemail greeting (e.g., “you have reached XXX-XXX-XXXX, please leave a message”) gives “no indication whatsoever of a possible reassignment.”

The D.C. Circuit’s opinion also upheld the broad parameters permitting a consumer to revoke consent “through any reasonable means that clearly expresses a desire not to receive further messages.” Contracting parties are still free, however, to “agree upon particular revocation procedures.” That provides businesses with a clearer opportunity to achieve compliance with the TCPA revocation requirement than they had before. Without the opportunity to channel revocation contractually into specified methods, tracking revocation can be next to impossible.

The D.C. Circuit’s opinion contains several lessons for current TCPA class defendants and companies wishing to avoid TCPA issues. Among them:

  • If you are defending a case where the autodialer element (TCPA liability requires the use of an “automatic telephone dialing system”) depends on the equipment’s potential capacity, revisit whether the named plaintiff or any class member even suffered a TCPA violation. The FCC’s expansive definition having been set aside, the TCPA’s reference to the “capacity” of equipment arguably should be read to refer to its current capacity only.
  • If the equipment meets the statutory definition of an autodialer, but some of the calls at issue were made without using the autodialer functionality, consider raising a typicality defense. The TCPA prohibits “mak[ing] any call … using any [autodialer],” but class members who received a call because a machine randomly dialed their numbers suffer a different kind of harm than those who received a call because a human being typed their numbers into a device that could have dialed them randomly. Both calls are made using an autodialer – and thus both calls arguably violate the TCPA – but Congress was concerned about preventing only one of them.
  • Any putative (b)(3) class defined to include calls to reassigned numbers should be challenged on commonality and predominance grounds. Since there is no more one-call “safe harbor,” the reasonableness of a caller’s belief that it had consent to contact a particular class member at that number likely must be determined on an individual basis.
  • Contracts with consumers should now include particular revocation procedures; otherwise, the consumer can use “any reasonable means” to revoke consent and tracking revocation becomes a serious problem.

If the FCC again engages in rulemaking regarding the autodialer definition and any “safe harbor” under the TCPA, Chairman Ajit Pai, who as a Commissioner dissented from the 2015 order that was the subject of the D.C. Circuit’s opinion, will preside over the process.