Over the past three months in the Media & Privacy Risk Report, we’ve analyzed the various parts of the July 10, 2015 FCC TCPA Order (the Order). See 80 Federal Register 61129. The Order’s implications for corporate America are in many respects staggering.
Although the petitioners to the FCC had hoped for clarity, reason and decreased litigation expense as a result of the Order, they instead face more uncertainty, numerous administrative leaps of logic, and exponentially increasing litigation expense because of the blood the TCPA plaintiffs’ bar now sees in the water. At this point, their having petitioned the FCC on the various points covered by the Order appears to have been a very perilous maneuver indeed. But only time will tell whether following administrative protocol before the FCC to ripen these issues for determination by a U.S. Circuit Court of Appeals will pay off in the long run.
Challenges to the FCC Order have been consolidated in the U.S. Court of Appeals for the District of Columbia Circuit. See ACA International v. FCC, et al., Case No. 15-211 (D.C. Cir.) and related cases. Seven intervenors (including one national association) have joined 10 petitioners (including two associations and the U.S. Chamber of Commerce) in seeking appellate review of more than 10 different aspects of the Order, including:
- what mere capacity to autodial means and whether such capacity (even if not used) equates to an automatic telephone dialing system (ATDS);
- whether a predictive dialer is an ATDS;
- what amounts to prior express consent under the TCPA;
- who is the maker of a call for purposes of the TCPA; and
- whether a text message is a call under the TCPA.
Prior articles in our series address those issues, as well as others, in detail.
A consolidated briefing schedule has been entered in the D.C. Circuit Court of Appeals, providing for briefing through February 24, 2016, meaning that a decision by the court may not be handed down until mid- to late-2016. And regardless of what the Court of Appeals decides, a petition for certiorari to the U.S. Supreme Court is almost a certainty, meaning that an ultimate decision on the FCC Order might not be handed down until sometime in 2017, at the earliest.
Meanwhile, the litigation over the Order is not limited to the D.C. Circuit Court of Appeals. In district and appellate courts throughout the country (mostly federal because the TCPA is subject to federal question jurisdiction), lawyers are waging costly battles over what the FCC Order means (because it leaves itself open in so many different respects to judicial interpretation). Additionally, petitions continue to be filed before the FCC requesting clarity on the meaning of the TCPA, yielding a potential three-headed Hydra of litigation in any TCPA case before the court in which suit is filed, the D.C. Circuit Court of Appeals and the FCC.
Although the Order issued only three months ago, Commissioner Ajit Pai has already been proven prescient. As he said in his dissent to the Order:
Some lawyers go to ridiculous lengths to generate new TCPA business. They have asked family members, friends, and significant others to download calling, voicemail, and texting apps in order to sue the companies behind each app. Others have bought cheap, prepaid wireless phones so they can sue any business that calls them by accident. One man in California even hired staff to log every wrong-number call he received, issue demand letters to purported violators, and negotiate settlements. Only after he was the lead plaintiff in over 600 lawsuits did the courts finally agree that he was a “vexatious litigant.” . . . ThisOrder will make abuse of the TCPA much, much easier. And the primary beneficiaries will be trial lawyers, not the American public. Order at p. 113.
In his dissent, Commissioner O’Reilly agreed, reasoning that the balance struck between consumer interests and legitimate business interests had been skewed by FCC expansion of the TCPA, leading to “litigation across that country that, in many cases, has further increased liability for good actors.” Order at p. 124 (emphasis added).
One example Commissioner O’Reilly gave was the elimination of call or text alerts by schools letting parents know their children had not arrived on time for school or that the schools were on lockdown. Id. In fact, on October 7, 2015, the school district in which one of the authors of this article has children enrolled notified parents that text message and voice call alerts would be eliminated because of concerns about TCPA liability. According to the news release from District 65 in Evanston, Illinois:
Last week, District 65 learned of a risk facing schools and districts when sending automated notifications to cell phone via voice call or text. . . . While we strongly believe that any communication from our district and schools are informational, non-commercial, and fall under the “emergency” exception, this interpretation has yet to be tested in courts and the TCPA provides steep penalties for violations. . . . To err on the side of caution, District 65 will be suspending automated calls to all parent and staff phones in situations where there may be some dispute as to the emergency nature of the call. With the current interpretation of the TCPA, we are disappointed to announce that we are currently unable to launch text messaging as planned. (http://www.district65.net/Page/573).
While District 65’s response to the Order is understandable in light of the potentially crippling statutory damages under the TCPA, this change in policy reflects the ridiculous consequences of the Order as predicted by the FCC dissenters, and how much more emboldened the TCPA plaintiffs’ bar has now become because of the Order. That underfunded school districts will now feel compelled to steer clear of efficient text message and automatic voice call communications, and instead employ overburdened and undercompensated staff to make live calls, is nothing less than an abomination—just one example of justice turned on its head by FCC interpretations of the TCPA.
But all is not lost from the defense perspective. While the Order, as previously noted, has created a potential three-headed Hydra in any TCPA case, each one of those heads offers defense lawyers and their clients an opportunity to avoid TCPA liability and nix potential class-wide damages. Of course, those opportunities don’t come cheaply, unfortunately. The bottom line is that there appears to be no end in sight to the TCPA litigation tsunami, so corporate America and their counsel would be wise to batten down the hatches and prepare for a rough and challenging ride.