The Court of Appeals for the District of Columbia Circuit recently set aside two key provisions of the Federal Communication Commission’s Declaratory Ruling and Order issued in 2015. Namely, the FCC’s definition of autodialing equipment covered by the TCPA and its approach to reassigned telephone numbers. The ruling has been seen as a major victory by the many businesses and organizations that together filed a lawsuit challenging the FCC’s Order, which had been criticized as confusing and difficult to understand.

The TCPA defines autodialer as any equipment which “has the capacity . . . to store or produce telephone numbers to be called . . . and to dial such numbers.” In its 2015 Order, the FCC stated that it viewed an autodialer as one with not just the present capacity to store numbers, but also the future capacity. And, to determine a systems capacity, it was further appropriate to look at add-ons to the device (like software or apps) as part of the capacity. The DC court disagreed, stating that under this logic, any smartphone would be an autodialer, something it called “an eye-popping sweep” and an “unreasonably expansive” interpretation of the TCPA.

The DC court also disagreed with how the FCC assessed a company’s ability to call (or text) a number that has been reassigned. In particular, where the recipient of the call or text did not provide consent, instead consent was provided by the prior holder of the number. The FCC recognized in its 2015 Order that these circumstances might arise and granted a “one time call” safe harbor, instead of a strict-liability approach taken by several courts. To reach this conclusion, it interpreted consent as needing to come from the “intended recipient” rather than the “called recipient.” The FCC also discussed “reasonable reliance.” However the DC court questioned why there could then be just one call. In sum, the court found the FCC’s interpretation “arbitrary” and “capricious.” The court noted that the FCC is now working on new regulations to address the issue, including a way of getting cell phone carriers to report on reassigned numbers.

Putting it Into Practice: We anticipate that there will be new clarification from the FCC in how it views autodialers. With or without this clarification, however, companies trying to determine the applicability of TCPA to their activities should keep in mind the statutory definition of the term. Namely, equipment that has the capacity to store or produce numbers to be called.