The August issue of Kelley Drye’s TCPA Tracker newsletter is here:

TCPA (Telephone Consumer Protection Act) Tracker Newsletter is a cross-practice effort produced to help you stay current on TCPA (and related) matters, case developments and provide an updated comprehensive summary of TCPA petitions pending before the FCC.

Recent News

FCC Opens Proceeding to Determine if VoIP Providers Should Have Additional Anti-Robocall Obligations

On August 6, 2021, the FCC adopted a Further Notice of Proposed Rulemaking to consider additional anti-robocall requirements for interconnected VoIP provider that seek direct access to telephone numbers.  Among the changes, the FCC proposes to require interconnected VoIP provider seeking access to numbers to “certify that it will use numbering resources lawfully; will not encourage nor assist and facilitate illegal robocalls, illegal spoofing, or fraud; and will take reasonable steps to cease origination, termination, and/or transmission of illegal robocalls once discovered.”  Comments on this proposal will be due 30 days after publication of the FNPRM in the Federal Register.

CGB Issues its Second Annual Report on the Status of the Implementation of Call Blocking Technologies

On June 29, 2021 the FCC’s Consumer and Government Affairs Bureau released a Second Call Blocking Report, as required by the 2019 Call Blocking Declaratory Ruling.  This Report, a follow up to the June 2020 First Call Blocking Report, provides (1) a detailed description of call blocking services offered by voice service providers, third-party analytics companies, and device manufactures (2) an in-depth evaluation of the effectiveness of call blocking tools (3) information on the state of deployment of caller ID authentication through implementation of the STIR/SHAKEN framework and (4) an analysis of the impact of call blocking on 911 services and public safety.

FCC Adopts Rules to Create an Online Portal for Private Entities to Report Robocall Violations

On June 17, 2021 the FCC’s Enforcement Bureau released a Report and Order implementing section 10(a) of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), which directs the Commission to “prescribe regulations to establish a process that streamlines the ways in which a private entity may voluntarily share with the Commission information relating to violations of section 227(b) or 227(e) of the Communications Act.” The Report and Order establishes procedures for private entities may submit information about suspected robocall and spoofing violations.  The rules do not supplement the complaint procedures available to consumers, and thus the portal is not open for consumer complaints of illegal robocalls.  Similarly, government entity reports of robocall or spoofing violations should be submitted via other methods as well.

FCC Issues Further Notice of Proposed Rulemaking for Implementing STIR/SHAKEN

On May 20, 2021 the FCC’s Wireline Competition Bureau released a Third Further Notice of Proposed Rulemaking (FNPR) to consider accelerating its STIR/SHAKEN requirements for a subset of small voice service providers believed to be likely to originate illegal robocalls. In its Second Caller ID Authentication Report and Order, the FCC granted some small voice service providers an additional two years to implement the STIR/SHAKEN caller ID authentication framework.  According to the FCC, a subset of these providers is originating an increasingly disproportionate amount of illegal robocalls.  The NPRM outlines a proposal to “shorten the extension for small voice service providers most likely to originate illegal robocalls by one year, so that such providers must implement STIR/SHAKEN in the IP portions of their networks no later than June 30, 2022.”  It also seeks comments on (1) “how best to identify and define the subset of small voice service providers that that are at a heightened risk of originating an especially large amount of illegal robocall traffic” and (2) “whether to adopt additional measures, including data submissions, to facilitate oversight to ensure that small voice service providers subject to a shortened extension implement STIR/SHAKEN in a timely manner.” Comments were due on or before July 9, 2021; reply Comments were due on or before August 9, 2021.

ZipDX Submits Letter of Intent to Serve as Registered Industry Consortium

As required by the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), the FCC must annually select “a single consortium to conduct private-led efforts to trace back the origin of suspected unlawful robocalls.” On May 27, 2021 ZipDx LLC (ZipDX) submitted a Letter of Intent to apply for this role. The Enforcement Bureau released a Public Notice on June 17, 2021 seeking comments on the matter.  The current designated  registered consortium, USTelecom – the Boadband Association’s Industry Traceback Group (USTelecom ITG) was not required to file another Letter of Intent, as its initial application and certifications continue for the duration of subsequent years, however it did submit a Comment reaffirming its commitment to the role.  The Bureau will select the registered consortium by August 25, 2021.  Comments were due July 2, 2021.

FCC Petitions Tracker

Kelley Drye’s Communications group prepares a comprehensive summary of pending petitions and FCC actions relating to the scope and interpretation of the TCPA.

Number of Petitions Pending

  • 30 petitions pending
  • 1 petition for reconsideration of the rules to implement the government debt collection exemption
  • 1 application for review of the decision to deny a request for an exemption of the prior express consent requirement of the TCPA for “mortgage servicing calls”
  • 1 request for reconsideration of the 10/14/16 waiver of the prior express written consent rule granted to 7 petitioners

New Petitions Filed

  • Enterprise Communications Advocacy Coalition – Petition for Declaratory Ruling

On July 30, 2021, the Enterprise Communications Advocacy Coalition (ECAC) filed a Petition for Declaratory Ruling seeking federal preemption of portions of recently enacted Florida legislation (SB 1120), which amends the Florida Do Not Call Act and the Florida Telemarketing Act.  The ECAC contends that portions of SB 1120 imposes obligations more restrictive than the TCPA Regulations and impose additional prohibitions on calls and the use of dialing equipment that are legal under federal law.  The Petition relies upon a 2003 Commission TCPA order which states that “that any state regulation of interstate telemarketing calls that differs from our rules almost certainly would conflict with and frustrate the federal scheme and almost certainly would be preempted.”

  • Perdue for Senate, Inc. – Petition for Declaratory Ruling

On July 2, 2021 Purdue for Senate, Inc. (Purdue for Senate) filed a Petition for Declaratory Ruling, asking the FCC to confirm that the Telephone Consumer Protection Act (TCPA) does not regulate ringless voicemail technology (RVM).  Specifically, Purdue for Senate wants the FCC to rule that “the delivery of a voice message directly to a voicemail box through RVM technology does not constitute a ‘call’ subject to prohibitions on the use of an automatic telephone dialing system (“ATDS”) or an artificial or prerecorded voice under Section 227(b)(1)(A)(iii) of the TCPA or Section 64.1200(a)(1)(iii) of the FCC’s rules.”  In the lead up to the January 2021 Senate runoff elections in Georgia, Purdue for Senate employed vendors that used RVM technology to deliver voice messages directly to potential voters’ voice mailboxes.  According to Purdue for Senate, these RVM transmissions fall outside of the scope of the TCPA and other FCC rules because, not only are they not “calls,” they are also not transmitted via a wireless network, and the technology does not bill the recipients of the messages.  Purdue for Senate claims that RVM technology is a “beneficial alternative” to robocalls, in that it allows non-profit organizations to relay important information without disrupting the lives of message recipients and/or adding charges to their bills.

This is the third petition to be presented to the FCC involving ringless voicemail technology.  Two prior petitions relating to ringless voicemail were filed and subsequently withdrawn by the petitioners prior to a Commission decision.

Upcoming Comments

  • None

Decisions Released

  • None

​Click here to see the full FCC Petitions Tracker.

Cases of Note

Common Ownership Does Not Establish Agency Relationship, Offer to Purchase Not “Telephone Solicitation” Under TCPA

The District of Arizona has held that common ownership of an agent and principal may not be enough to establish an agency relationship nor, therefore, vicarious TCPA liability. Rather, the plaintiff must plead specific facts showing that the purported agent controlled or directed the calls that plaintiff alleges violated the TCPA. It further held that an offer to purchase property—rather than an offer to sell a product or services—does not qualify as a “telephone solicitation” under § 227(c) of the TCPA.

In Jance v. Homerun Offer LLC, Plaintiff filed suit against Homerun Offer alleging that he received 29 calls from the company making “a generic and cursory inquiry” into purchasing his house in violation of the TCPA. After conducting his own online research into the state corporate records, he learned of a second company, All Star Investments, owned by Homerun Offer’s registered agent, President, and CEO, that had made six property purchases between October 2019 and June 2020. Plaintiff hypothesized that the property purchases made by All Star Investments came about as Homerun Offer’s telemarketing efforts, and named both in his TCPA complaint.

All Star Investments moved to dismiss, arguing that Plaintiff failed to plausibly allege that it could be held vicariously liable for Homerun Offer’s calls. Defendants also both moved to dismiss Plaintiff’s § 227(c) claim prohibiting continued “telephone solicitation” after an individual requests to be put on a company’s internal do-not-call list, arguing that the calls fell outside the statutory definition of “telephone solicitation.” As to both, the Court agreed.

The Court held that Plaintiff failed to make a prima facie showing that All Star Investments had the right to substantially control Homerun Offer, and that Homerun Offer acted as All Star Investments’ agent. “The simple fact that the same individual . . . is the President and CEO of both [Defendants] as well as the parent company for both the agent and principle” was “[in]sufficient to show that All Star Investments controlled or directed Homerun Offer’s phone calls to Plaintiff.” With no agency relationship plausibly alleged in the complaint, the Court dismissed the claims against All Star Investment.

Separately, the Court dismissed Plaintiff’s claim for damages under § 227(c) of the TCPA, which prohibits an entity from continuing to initiate “telephone solicitation” after an individual requests to be put on a do-not-call list. Referencing the statutory definitions of “telephone solicitation” and “telemarketing,” the Court noted that the TCPA protects individuals from calls placed with the “purpose of encouraging the purchase of . . . property, goods, or services” by the recipient. Because the calls in question constituted an offer to purchase (rather than an offer to sell), the Court found the Complaint failed to state a claim under § 227(c) and dismissed those claims.

Not all Plaintiff’s claims were dismissed. His claims under § 227(b), which prohibits the use of an “automatic telephone dialing system” (ATDS) without the recipient’s consent survived. Noting that whether a defendant has used an ATDS is “often a fact exclusively within the defendants’ possession,” the Court found that Plaintiff’s allegations—that he had no business relationship with Defendants nor provided them with his contact information, that the caller’s numbers were attributed to a VoIP and had misleading caller ID information, that there was a brief pause before the caller began speaking on certain calls, and that the calls were generically formatted and scripted—were sufficient to plausibly allege use of an ATDS.

Jance v. Homerun Offer LLC, No. CV-20-00482-TUC-JGZ, 2021 WL 3270318 (D. Ariz. July 30, 2021)

Court Rejects Plaintiff’s Argument to Expand ATDS Definition Based on Duguid Footnote

In Hufnus v. DoNotPay, Inc., the Northern District of California granted Defendant company’s motion to dismiss after Plaintiff alleged that he had been contacted in a manner that violated the TCPA. In the June 24, 2021 order, the court found that Plaintiff’s interpretation of footnote 7 of Facebook, Inc. v. Duguid, 141 S. Ct. 1163, 1173 (2021) conflicted with Duguid’s “holding and rationale,” since Defendant in this case did not “dial random or sequential blocks of telephone numbers,” but instead used numbers provided by consumers during the registration process.

The dialing system that Defendant “used to contact [Plaintiff] merely processe[d] phone numbers supplied by consumers while signing up for [Defendant’s] services.” Plaintiff’s complaint alleged that Defendant’s dialing system stored the telephone numbers “in a random and/or sequential way; uses a random and/or sequential generator to pull from the list of numbers to send targeted text messages; and uses a random and/or sequential generator to determine the sequence in which to send messages.”  Specifically, Plaintiff relied on footnote 7 in Duguid, which states that “an autodialer might use a random number generator to determine the order in which to pick phone numbers from a preproduced list. It would then store those numbers to be dialed at a later time.” Plaintiff argued that footnote 7 expanded the definition of an ATDS to include Defendant’s dialing system.

The court disagreed, stating “the [Supreme] Court employed the quoted line to explain how an autodialer might both ‘store’ and ‘produce’ randomly or sequentially generated phone numbers[.]” The court looked to the amicus curiae brief cited in footnote 7, which “makes clear that the ‘preproduced list’ of phone numbers referenced in the footnote was itself created through a random or sequential number generator.” The list of numbers used by the Defendant however, were “obtained in a non-random way (specifically, from consumers who provide them).”

Thus, because the platform solely used phone numbers that had been supplied by consumers, “and not phone numbers identified in a random or sequential fashion,” the court found that Defendant’s platform did “not qualify as an autodialer under the TCPA.” The court therefore dismissed Plaintiff’s complaint with prejudice.

Hufnus v. DoNotPay, Inc., No. 20-CV-08701-VC, 2021 WL 2585488 (N.D. Cal. June 24, 2021).

Court Finds Standing Sufficient But Dismisses TCPA Action For Insufficient Facts Alleged

In Camunas v. National Republican Senatorial Committee, the Eastern District of Pennsylvania dismissed a TCPA case for failure to adequately plead sufficient facts showing that an ATDS was used to send the text messages at issue.

Plaintiff alleged that he received “at least six messages” from a political organization, and that the messages were “generic and obviously pre-written.” The complaint further alleged that Defendant’s website “states that its opt-in messaging program communicates using ‘recurring autodialed marketing messages.’” Defendant moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that Plaintiff failed to plead an injury-in-fact, and for failure to state a claim.

Defendant challenged the Plaintiff’s standing to assert a claim based on a handful of text messages.  In denying Defendant’s motion to dismiss for lack of subject matter jurisdiction, the court held that Plaintiff “plausibly alleges he suffered an injury” and “also plausibly alleges that the injury is fairly traceable to [Defendant’s] conduct and that a favorable judicial decision would redress the alleged injury.” On this point, Defendant argued against Plaintiff’s position that the six messages should be sufficient for the injury-in-fact standing requirement. Defendant sought “to distinguish [Susinno v. Work Out World Inc., 862 F.3d 346 (3d Cir. 2017)], from the instant action by arguing that Susinno ‘involved a phone call and a one-minute prerecorded voicemail – not a small number of text messages’ and still ‘required the plaintiff actually assert and plead an injury – such as nuisance and invasion privacy.’” The court found that in this case, Plaintiff had similarly alleged that “he found [Defendant’s] unsolicited communication ‘annoying, disruptive, frustrating and an invasion of his privacy.’” Thus, the court found that it had subject matter jurisdiction over the claim.

On the 12(b)(6) motion to dismiss for failure to state a claim, the court held that Plaintiff had not plausibly alleged that Defendant “used an ATDS to send the messages at issue.” The court found that the complaint had not identified what was contained in the text messages at issue, had not identified “the phone number from which the messages were sent,” and had failed to “indicate whether that number was a short code.” The court noted that “[i]n cases involving text messages,” courts “‘have considered the nature of the message, the length of the sending number, the number of messages, and the relationship between the parties.’” Specifically, the court pointed out that “several courts have concluded that a ‘short code’ number supports an inference of ATDS use.” As such, Plaintiff had had not alleged sufficient facts “to ‘nudge’ his claim ‘across the line from conceivable to plausible.’”

Ultimately, the court denied Defendant’s motion to dismiss for lack of subject matter jurisdiction, but granted the motion to dismiss for failure to state a claim, dismissing the complaint without prejudice.

Camunas v. National Republican Senatorial Committee, No. 21-1005, 2021 WL 2144671 (E.D. Pa. May 26, 2021).

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The October issue of Kelley Drye’s TCPA Tracker newsletter is here:

TCPA (Telephone Consumer Protection Act) Tracker Newsletter is a cross-practice effort produced to help you stay current on TCPA (and related) matters, case developments and provide an updated comprehensive summary of TCPA petitions pending before the FCC.

Recent News

As Required by the TRACED Act, FCC Releases NPRM Examining Past TCPA Exemptions 

On October 1, 2020 the FCC released a Notice of Proposed Rulemaking (NPRM) to seek input on proposed rules to codify previous exemptions to the TCPA’s consent requirements.  Section 227(b) of the TCPA prohibits “any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party” unless the call meets the requirements of certain exemptions.  The exemptions under review by the FCC include “(1) non-commercial calls to a residence; (2) commercial calls to a residence that do not constitute telemarketing; (3) tax-exempt nonprofit organization calls to a residence; (4) HIPAA-related calls to a residence; (5) package delivery-related calls to a wireless number; (6) financial-institution calls to a wireless number; (7) healthcare-related calls to a wireless number; (8) inmate calling service calls to a wireless number; and (9) cellular carrier calls to their own subscribers.   Section 8 of the Pallone-Thune TRACED Act directed the FCC to examine these exemptions to ensure that they contain requirements addressing “(1) the classes of parties that may make such calls; (2) the classes of parties that may be called; and (3) the number of such calls that may be made to a particular called party.”  To this end, the proposed measures include classifying parties as “informational callers” for callers only providing information, and “transactional callers” for callers trying to complete or confirm commercial transactions, in addition to limiting the number of calls that may be made during a period of time.  Comments are due October 26, 2020, and reply comments are due November 3, 2020.

FCC Adopts New Rules to Combat Spoofed Robocalls 

On October 1, 2020, the FCC released a Second Report and Order in its ongoing call authentication proceeding under the TRACED Act.  In March, the FCC required originating and terminating voice service carriers to implement the STIR/SHAKEN call authentication framework in the IP portions of their networks by June 30, 2021.  In the Second Report and Order, the FCC requires intermediate carriers also to implement the STIR/SHAKEN framework in their IP networks and to pass STIR/SHAKEN authentications to downstream carriers.  The FCC extended the implementation deadline for small voice carriers (those with fewer than 100,000 subscriber lines) for two years, until June 30, 2023.  Any carrier taking advantage of the extension must, however, implement a reasonable call mitigation program to reduce the origination of unlawful robocalls and must, by a date to be specified by the FCC, file a certification describing its call mitigation program.  In addition, the Second Report and Order requires voice service carriers either to convert the non-IP portions of their networks to IP by June 30, 2021 or to be participating in industry efforts to develop and implement a call authentication framework for non-IP calls.  Finally, implementing a requirement of the TRACED Act, the FCC prohibits voice service providers from imposing a line item fee on consumers to implement the STIR/SHAKEN framework.

FCC Proposes to Dismiss Old TCPA Preemption Petitions

On September 23, 2020 the Consumer and Governmental Affairs Bureau released a Public Notice, announcing plans to dismiss 10 pending petitions seeking preemption of state laws addressing unwanted robocalls and faxes.  The petitions were filed between 2003 and 2005, and the relief requested may no longer be relevant due to regulatory changes that have occurred since their filing.  The FCC will dismiss the petitions with prejudice unless petitioners file letters by November 20, 2020.

FCC Warns Robocall Scams May Undermine COVID-19 Contact Tracing Efforts 

The FCC has warned consumers in the past against answering calls from unknown numbers in order to avoid falling victim to robocall scammers.  During the September 25, 2020 Consumer Advisory Committee meeting, the CGB acknowledged that this advice may interfere with contact tracing efforts, as contact tracing calls will likely come from unknown numbers.  Complicating matters, many recent scams explicitly refer to contact tracing in robocall messages.  Some scammers even go so far as to spoof actual health department phone numbers.  The FCC published an updated consumer guide and COVID-19 scam alert on their website to help consumers identify scams.

Anderson + Wanca File Application for Review of Ryerson Order 

On October 5, 2020 Anderson + Wanca filed an Application for Review, asking the FCC to consider reversing the Ryerson Declaratory Ruling. According to Anderson + Wanca, “the Commission should reverse the Ryerson Bureau Order under Rule 1.115(b)(2) because its reasoning regarding ‘online fax services’ is in conflict with the statute, regulations, case precedent, and established Commission policy, and is based on erroneous factual findings.”  More specifically, the Application questions whether the equipment referenced in the Ryerson decision as an online fax service has the requisite capacity to be a telephone fax machine.  Anderson + Wanca also argue that the Amerifactors Declaratory Ruling, the decision cited as the primary reason for granting the Ryerson Petition, was based on a mistaken understanding of the TCPA guidelines and thus warrants Commission review.

FCC Petitions Tracker

Kelley Drye’s Communications group prepares a comprehensive summary of pending petitions and FCC actions relating to the scope and interpretation of the TCPA.

Number of Petitions Pending

  • 29 petitions pending
  • 1 petition for reconsideration of the rules to implement the government debt collection exemption
  • 1 application for review of the decision to deny a request for an exemption of the prior express consent requirement of the TCPA for “mortgage servicing calls”
  • 1 request for reconsideration of the 10/14/16 waiver of the prior express written consent rule granted to 7 petitioners

New Petitions Filed

  • None

Upcoming Comments

  • None

Decisions Released

  • None

Click here to see the full FCC Petitions Tracker.

 

Cases of Note

District Court Finds All TCPA Claims Between 2015 And 2020 Barred By Supreme Court’s Barr Decision

In Creasy v. Charter Commc’ns, Inc., the Eastern District of Louisiana found that the Supreme Court’s decision in Barr v. Am. Ass’n of Political Consultants (“Barr”) rendered the entirety of 227(b)(1)(A)(iii) unconstitutional during the period from Congress’s 2015 addition of the unconstitutional government-owed debt exception until its July 6, 2020 severance from the TCPA.  Thus, the Court ruled that it lacked subject matter jurisdiction to hear claims alleging violations of the TCPA’s ATDS prohibition during that window of time.

In Barr, the Supreme Court held that the 2015 amendment adding an exception to the TCPA’s ATDS provision for calls made in connection with a government-owed debt created an impermissible content-based speech restriction.  As a remedy, the Supreme Court excised the government-owed debt exception and left the (other constitutional) remainder of the TCPA intact.

In Creasy, the plaintiffs alleged that the defendant made 130 autodialed calls and texts without the necessary consent.  None of the calls involved a government-owed debt.  One hundred twenty-nine of the 130 were made during the time that the government-owed debt exception to the TCPA was operative.

The defendant moved to dismiss all claims as to the 129 calls arguing that the Court lacked subject matter jurisdiction because courts lack authority to enforce violations of unconstitutional laws. The Eastern District of Louisiana dismissed the 129 calls finding that the unconstitutional exception rendered the entire statute unconstitutional during that time period. Because the Supreme Court found the exception unconstitutional, the Court determined that it lacked subject matter jurisdiction to apply the law to the defendant’s conduct.

With respect to the lone remaining communication, the defendant unsuccessfully sought dismissal and the case will proceed.  The Court rejected arguments that the defendant could not be held responsible for calls placed by its subsidiary and found the plaintiffs had met the standard for stating a valid claim.  Thus, the motion to dismiss was granted-in-part and the claims as to the one post-Barr call will continue.

Creasy v. Charter Commc’ns, Inc., No. CV 20-1199, 2020 WL 5761117 (E.D. La. Sept. 28, 2020)

Court Dismisses Vague Text Claims For Lack Of Standing 

In Clements v. Porch.com, Inc., the District of Alaska dismissed 17 plaintiffs’ TCPA claims based on a failure to allege proper standing.  Plaintiffs alleged a total of 3,318 texts received, based solely on an approximation derived from multiplying the number of weeks during which each plaintiff received texts times an alleged average of 2 messages per week.  The Court found that plaintiffs did not support those calculations with any specific allegations concerning specific text messages received by any specific plaintiff and produced only exemplar text messages.  The Court found the Complaint lacked clear allegations that each plaintiff had received texts in violation of the statute.  The Court further found that plaintiffs failed to properly allege which plaintiff(s) were pursuing Do Not Call claims under § 227(c)(5) since there were no allegations regarding any plaintiff’s number being listed on the National DO Not Call Registry.  Thus, the Court held that plaintiffs’ assumptions were insufficient to establish an injury in fact and dismissed based on a lack of constitutional standing.

Clements v. Porch.com, Inc., No. 1:20-CV-00003-SLG, 2020 WL 5739591 (D. Alaska Sept. 24, 2020)

Court Dismisses Fraud Counterclaim Against TCPA Plaintiff 

In Mey v. Castle Law Grp., the District of West Virginia granted plaintiff’s motion to dismiss fraud counterclaims against an alleged “serial” TCPA plaintiff because it found that the alleged basis for the counterclaim was actually behavior encouraged by the TCPA.  Plaintiff’s complaint alleged that the defendants and/or their agents had called her using auto-dialers and pre-recorded messages selling debt relief services in violation of the TCPA.  Four of the defendants counterclaimed for fraud asserting that the plaintiff voluntarily participated in a credit card qualification process in order to “trap the purported telemarketers into a lawsuit.”

Plaintiff moved to dismiss arguing that her alleged conduct did not constitute fraud but was instead the type of investigation encouraged under the TCPA.  The Court agreed.  The Court relied heavily on a prior, similar District Court case holding that statutory damages in laws like the TCPA are “specifically designed to appeal to plaintiffs’ self-interest and direct that self-interest toward the public good” and “operate as bounties, increasing the incentives for private enforcement of the law.”  Thus, the court dismissed the fraud counterclaim.

Mey v. Castle Law Grp., No. 5:19-CV-185, 2020 WL 5648326 (N.D.W. Va. Sept. 22, 2020)

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On April 1, 2021, in a unanimous decision, the Supreme Court ruled that the definition of an automatic telephone dialing system (“ATDS”) under the TCPA is limited by the plain grammar of the statute itself.  The Court, in a decision authored by Justice Sotomayor, held that a device must have the capacity to use a random or sequential number generator in either storing or producing a telephone number, to qualify as an ATDS under the TCPA.  Facebook, Inc. v. Duguid et al., Case No. 19-511 (2021).

Our preview of the Supreme Court’s consideration of Duguid can be found here and our analysis of the oral argument can be found here.  The Court’s decision is discussed below, and its opinion can be found here.

Background

Plaintiff Noah Duguid alleged that defendant Facebook had used an ATDS without the requisite consent to contact him via text message when its systems used an automated response protocol to alert a customer-provided number of an access attempt. Mr. Duguid alleged that he did not have a Facebook account and never provided consent for Facebook to send him text messages.  In 2018, the Northern District of California dismissed Duguid’s TCPA claim against Facebook because it held that he had failed to properly allege the use of an ATDS where the complaint’s allegations “strongly suggested direct targeting rather than random or sequential dialing.”  In 2019, the Ninth Circuit reversed the lower court’s decision.  It reasoned that Duguid had sufficiently pled the use of an ATDS by alleging Facebook’s equipment “had the capacity to store numbers to be called and to dial such numbers automatically.”  The Ninth Circuit thus held that any device or system that could store telephone numbers was an ATDS restricted by the TCPA.  Facebook appealed this decision to the Supreme Court.

The TCPA defines an ATDS as equipment that has the capacity “(A) to store or produce telephone numbers to be called, using a random sequential number generator; and (B) to dial such numbers.”   The Supreme Court took up the following question: “Whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ and ‘automatically dial’” telephone numbers, even if the device does not ‘us[e] a random or sequential generator?’”

Although the Supreme Court’s Duguid decision stemmed out of a challenge to the Ninth Circuit’s ATDS definition, five other federal circuit courts of appeals had weighed in on that issue, creating a deep circuit split. The Second, Sixth, and Ninth Circuits had held that any predictive dialer or system that dials from a stored list should be considered an ATDS under the TCPA. On the other hand, the Third, Seventh, and Eleventh Circuits held that an ATDS must have the capacity to generate random or sequential telephone numbers to be subject to the restrictions of 47 U.S.C. § 227(b).

SCOTUS’s Decision: Supreme Court Reverses the Ninth Circuit

In an opinion authored by Justice Sotomayor, a unanimous Supreme Court held that to qualify as an ATDS subject to Section 227(b)’s restrictions, a device or system must use a random or sequential number generator in storing or in producing a telephone number.  The Court found that because “the equipment in question must use a random or sequential number generator” to be an ATDS, “[t]his definition excludes equipment like Facebook’s login notification system, which does not use such technology.”

The Court started by confirming that a proper reading of the statutory text confirmed the narrower standard.  The Court reasoned that under clear rules of grammar, the modifying phrase “using a random or sequential number generator” modifies both antecedent verbs: “store” and “produce.”  Additionally, the Court reasoned that because the modifying phrase immediately follows the cohesive clause “store or produce telephone numbers to be called” it would be odd to apply the modifier to one part of the cohesive clause.  Thus, the Supreme Court cut through the grammatical roadblock that had led some circuit courts into opining that equipment that could simply “store” telephone numbers could be considered to be a restricted ATDS.

Justice Sotomayor’s opinion also relied on the statutory context of the TCPA to support the Court’s holding.  The Court noted that the TCPA’s ATDS restrictions “target a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity.”  Congress intended to address a very nuanced problem; therefore, expanding the definition of an ATDS to encompass any equipment that merely stores telephone numbers would go beyond the intent of Congress, and “take a chainsaw to these nuanced problems when Congress meant to use a scalpel.”  Additionally, the Court noted that such an expansive definition would encompass virtually all modern cellphones and expose ordinary cell phone owners to TCPA liability when they engage in speed dialing or send automated text message responses, which could not have been Congress’s intent.

As to public policy concerns, the Court refused to impose “broad privacy-protection goals” onto the statute’s narrow definition of ATDS, noting: “[t]hat Congress was broadly concerned about intrusive telemarketing practices, however, does not mean it adopted a broad autodialer definition.”  The Court noted that the TCPA would continue to restrict artificial and prerecorded voice calls, regardless of the narrow reading of ATDS, and that fears of a “torrent” of “robocalls” are thus overstated.  In the end, as Judge Sotomayor explained, “Duguid’s quarrel is with Congress, which did not define an autodialer as malleably as he would have liked.”

In a short concurrence, Justice Alito agreed with the Court’s ruling, but wrote separately to take issue with the main opinion’s reliance on a “set” grammar rule.  He advised that the canons of statutory interpretation are meant to be used as tools to help identify the way in which “a reasonable reader” would have understood the text of a statute at the time it was issued.  The other justices dealt with Justice Alito’s concurrence in a footnote, and reminded lower courts to be methodical when interpreting statutory text.

Impact

There are hundreds of litigations and arbitrations pending around the country dealing with claims of illegal use of an ATDS, and dozens of high-profile class action cases have been stayed pending the Supreme Court’s decision in Duguid.  The Court’s decision will alter the course of current and future cases as courts and litigants now have a uniform definition of an ATDS when assessing ATDS-based claims brought under Section 227(b) of the TCPA.  Additionally, Duguid has provided guidance for companies that wish to directly reach out to current and prospective customers, by settling the question of what types of devices and systems will be considered an ATDS so as to require specific prior consents for their use.  The decision has already prompted calls for a legislative response to the Court’s more narrow interpretation of ATDS from lawmakers who want to “amend the [TCPA], fix the Court’s error, and protect consumers.”

The Court’s decision also moots much of the ATDS question remanded to the FCC in 2018 in ACA International v. FCC.  Given that the Court has now interpreted the ATDS definition, the FCC will not be required to provide its own interpretation of the term.  In addition, the Court undermines alternative formulations of the ATDS definition occasionally advanced by the FCC that inquire as to the ability to initiate a high volume of calls or texts in a short period of time.  The Court’s statement that it does not “interpret the TCPA as requiring such a difficult line-drawing exercise around how much automation is enough” likely moots that line of inquiry.  Finally, several pending petitions ask the FCC to create or modify exceptions to the ATDS restriction.  Many of those petitions will have less practical impact going forward.

Prerecorded/artificial voice call claims and Do Not Call violation claims under the TCPA, however, were not the focus of the Court’s decision.  Callers should remain vigilant about their communications practices and ensure that they have procedures in place to remain fully compliant with the TCPA.

If you have any questions, please contact our experienced TCPA team:

Lauri A. Mazzuchetti
(973) 503-5910
lmazzuchetti@kelleydrye.com

Steven A. Augustino
(202) 342-8612
saugustino@kelleydrye.com

Alysa Z. Hutnik
(202) 342-8603
ahutnik@kelleydrye.com

For the second time this year, the TCPA came before the Supreme Court via teleconference oral argument in Facebook, Inc. v. Duguid, et al, Case No. 19-511 (2020). The Supreme Court’s disposition of Facebook’s petition is expected to resolve a widening Circuit split over what qualifies as an automatic telephone dialing system (“ATDS”) under the TCPA, 47 U.S.C. § 227, et seq., and thus determine much of the scope of the TCPA’s calling restrictions.

Question Presented

The Supreme Court granted review of the question: “Whether the definition of ATDS in the TCPA encompasses any device that can “store” and “automatically dial” telephone numbers, even if the device does not “us[e] a random or sequential generator”?”

Six Circuits have previously answered the question. The Second, Sixth and Ninth held that a predictive dialer or system that dials from a stored list can qualify as an ATDS under the TCPA. The Third, Seventh, and Eleventh require that technology must have the capacity to generate random or sequential telephone numbers to qualify as an ATDS. The Seventh Circuit decision, Gadelhak v. AT&T Services, Inc., was penned by then-Judge Barrett, who participated in today’s argument.  In addition, the D.C. Circuit’s 2018 remand in ACA International v. FCC questioned whether a broad reading of ATDS was lawful.

This case arises out of the Ninth Circuit’s broad approach to the definition of an automatic telephone dialing system under the TCPA.

Procedural History

The controversy comes before the Supreme Court on the basis of text messages that plaintiff Duguid allegedly received from Facebook in 2005. Duguid alleged that Facebook had violated the TCPA by maintaining a database of numbers on its computer and transmitting text message alerts to selected numbers from its database using an automated protocol. Facebook filed a motion to dismiss, arguing that Duguid had failed to plead the use of an ATDS. The district court held that the ATDS allegations were insufficient because they “strongly suggested direct targeting rather than random or sequential dialing” and dismissed the case. Soon after, the Ninth Circuit issued its decision in Marks v. Crunch San Diego, holding that an ATDS definition includes devices with the capacity to store numbers and to dial numbers automatically. Duguid appealed the prior dismissal of his claims and, applying Marks, the Ninth Circuit reversed. Facebook asked the Supreme Court to review the Ninth Circuit’s decision.

Briefing

Duguid, Facebook, and the United States have fully briefed the issue. Duguid argues for a broad definition of ATDS based on the statutory text and two canons of construction, the distributive-phrasing canon and last-antecedent canon, that he alleges show the adverbial phrase “using a random or sequential number generator” modifies the verb “to produce” but not the verb “to store.” Facebook, on the other hand, posits that the statutory language “using a random or sequential number generator” is an adverbial phrase that modifies both the verbs “store” and “produce.” Under that approach, the statutory text limits the definition of an ATDS to technology that uses a random- or sequential-number-generator. The United States filed a brief agreeing with Facebook that the plain text of the TCPA limits the definition of an ATDS to random- or sequential-number-generators. The government’s grammatical analysis focuses on the comma that precedes the adverbial phrase, pointing to past Supreme Court decisions and canons of statutory interpretation that advise such a comma is evidence that the phrase is meant to modify all antecedents (in this case, both the verbs “store” and “produce”).

Oral Argument

Argument in the case went over the scheduled hour by about 20 minutes.  Facebook and the United States split the first 30 minutes and Duguid took the remaining time, excluding Facebook’s brief rebuttal. While oral argument does not always foretell the Court’s decision, certain trends developed.

  • Grammatical Construction:  A majority of Justices seemed to agree that Facebook and the United States had a stronger grammatical reading of the statute, but struggled with both the awkwardness of the construction, and the surplusage problem that their interpretation creates.
    • Justice Alito, for example, asked both Facebook and the United States whether it made sense to talk about random or sequential number generators as a device that can “store” numbers, wondering if their interpretation rendered the verb “store” superfluous. In response, the United States suggested that Congress was likely taking a “belt-and-suspenders” approach to drafting.
    • The Chief Justice, noting that most speakers do not resort to statutory canons of interpretation to understand language, suggested that the “sense” of the provision was more important than its syntax.
    • Justice Kavanaugh repeatedly asked about the different scope of the prohibition on artificial or prerecorded voice calls and “live” calls using an ATDS, as a way to understand the ATDS language.
    • Justice Gorsuch asked Facebook and the United States to address an alternate interpretation, offered by then-Judge Barrett in her decision in Gadelhak, that the clause “using a random or sequential number generator” could modify the phrase “telephone numbers to be called” instead of the verbs “store” and/or “produce.” Both parties asserted this interpretation would lead to their preferred outcome.
  • Broader Questions on TCPA Scope:  The Justices also pressed the parties on questions unrelated to the grammatical construction the statute.
    • Justice Thomas asked why “text messages” were covered by the TCPA at all, given that the statute’s language only regulates calls and later called the statute an “ill fit” for current technology. Justice Thomas’s question is indicative of a broader concern, shared expressly by Justices Sotomayor, Alito and Kavanaugh, that the TCPA may be ill-suited to regulate technology that looks very different from the technology available in 1991 when the TCPA was passed.
    • Justices Sotomayor, Barrett, Breyer, and Gorsuch each questioned whether the Ninth Circuit’s broad definition of an ATDS would expose all smartphone users to potential liability.
    • Justice Barrett was concerned specifically with the call-forwarding function and seemingly “automated” functions that modern cellphones are equipped with.
    • Duguid seemed unable to provide the Justices with a satisfactory answer on several of the non-grammatical issues and gave conflicting answers concerning the role for, and level of, human interaction necessary to remove technology from the definition of an ATDS.

In sharp contrast to the Supreme Court’s oral argument in Barr v. American Association of Political Consultants, none of the Justices mentioned the TCPA’s popularity among the American public in interpreting the statutory language. Justice Alito went so far as to suggest that the TCPA may in fact be obsolete, and although the Court has not claimed the power to declare a statute null on that basis, the TCPA might be a good candidate.

The Court is expected to issue its ruling by Spring 2021. To learn more about the background of the case, the Circuit Courts’ varying definitions of an ATDS, and the potential implications for the Court’s ruling, consider listening to Kelley Drye litigator and Partner Paul Rosenthal’s preview podcast of Duguid or Kelley Drye’s monthly TCPA Tracker.

 

Ad Law Access Podcast

Ad Law Access Podcast

The new Supreme Court Term is underway and for the second straight Term, and second time in 2020, the Court will address a Telephone Consumer Protection Act (TCPA) question. On December 8, 2020, the Justices will hear argument in the case of Facebook v. Duguid, which is expected to resolve a widening Circuit split regarding the definition of an automatic telephone dialing system.

On the latest episode of the Ad Law Access podcast, litigation partner Paul A. Rosenthal provides some background on where things stand with the TCPA, level-set on the current status of the ATDS definition, and lay out some of the potential implications for the Court’s ruling.

If you have any questions or concerns about the technology that you’re using or your particular telemarketing procedures, our team of compliance and litigation specialists would be happy to talk through your practices or campaign and offer practical feedback and evaluation of the potential risks on this quickly evolving topic.

Listen on Apple, SpotifyGoogle Podcasts,  Soundcloud, via your smart speaker, or wherever you get your podcasts.

For additional information, please visit:

Kelley Drye’s TCPA Tracker newsletter

TCPA and Telemarketing Section of the Advertising and Privacy Law Resource Center

Ad Law Access Blog

COMMLAW Monitor blog

Full Spectrum podcast

Advertising and Privacy Law Resource Center

 

On July 9, 2020, the Supreme Court granted Facebook’s petition for certiorari in a case with potentially broad implications for both class action litigation and business communications with their current and potential customers.  The Supreme Court’s disposition of Facebook’s petition may settle the complex question of what qualifies as an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”).

The TCPA prohibits telemarketing calls to be placed using an ATDS without the requisite level of prior consent.  Thus, the definition of what technology qualifies as an ATDS is often a fundamental, threshold question upon which TCPA litigation turns.  Prior to 2015, the FCC had offered various, sometimes vague, interpretations of the term.  In 2015, the FCC offered an expansive definition, which was set aside in March 2018 in the ACA International decision.  While the issue has been before the FCC on remand for over two years now, courts nevertheless engaged in their own analysis of the statute, resulting in a broadening Circuit split on how the law is interpreted and applied and divergent outcomes based on the court in which the case is filed.  Now the Supreme Court is poised (potentially) to resolve that dispute. Continue Reading Supreme Court to Weigh-in on the Definition of an Autodialer Under TCPA

On July 6, 2020, in a 7-2 decision, the Supreme Court upheld the constitutionality of the TCPA, but severed as unconstitutional the government debt exception.  William P. Barr et al. v. American Association of Political Consultants et al., Case No. 19-631 (2020).  Our preview of the Supreme Court’s consideration of the Barr case can be found here and our summary of the oral argument can be found here.

Background

When first enacted in 1991, the TCPA prohibited calls placed using an automatic dialer or prerecorded voice with certain, specific exceptions. In 2015, Congress amended the TCPA to permit calls that relate to the collection of debts guaranteed by the U.S. government.  That amendment does not permit the use of the same technology for debts guaranteed by private lenders or calls related to other topics, which served as the basis for challenges that the exception rendered the statute unconstitutionally content-based in violation of the First Amendment.  In 2019, the Fourth Circuit agreed, finding the exception failed strict scrutiny, was unconstitutional, and should be severed from the TCPA.  The government disagreed with the Fourth Circuit’s decision and petitioned the Supreme Court to review the decision.  Plaintiffs also filed a cross-petition.

Supreme Court Affirms

In the controlling opinion written by Justice Kavanaugh (joined by Chief Justice Roberts and Justice Alito), relying on Reed v. Town of Gilbert and applying strict scrutiny, the Supreme Court held that the government debt exception to the TCPA was an unconstitutional content based speaker restriction.  As a remedy, the majority opted to sever the government debt exception from the TCPA, which leaves the remainder of the TCPA fully operative.

Justice Kavanaugh reasoned that both severability principles and the Communication Act’s severance clause mandated severance in this case.  Justice Kavanaugh also reasoned that the remainder of the TCPA survived the constitutional challenge because Congress has a continuing interest in protecting consumer privacy, noting that “[t]he continuing robocall restriction proscribes tens of millions of would-be robocalls that would otherwise occur every day.”

In a short concurrence, Justice Sotomayor argued that the exception should be subjected to intermediate scrutiny; however, she agreed that the exception also did not survive that analysis and therefore should be severed.

In a partial dissent, Justice Breyer (joined by Justices Ginsburg and Kagan) argued that the Supreme Court should have applied intermediate scrutiny because the restriction did not suppress a particular viewpoint or threaten the neutrality of a public forum. Justice Breyer reasoned that the exception survived intermediate scrutiny because the speech related harm of the exception was modest in proportion to the important government goal of protecting the public fisc.  Justice Breyer also found that the exception was narrowly tailored because it only applied to the limited categories of calls related to the collection of government debt.  For Justice Breyer, strict scrutiny should only apply when a restriction interferes with the marketplace of ideas or interferes with an individual’s right to communicate with the government.  With respect to the proper remedy, however, Justice Breyer agreed that severability of the offending exception was appropriate.

In another partial dissent, Justice Gorsuch (joined, in relevant part, by Justice Thomas) attacked the Court’s severability doctrine, including because the application of the doctrine in this instance did not provide the plaintiffs with the relief that they had initially sought.  Instead of a remedy which allows for the plaintiffs to speak more freely, severance banned additional speech.  For Justice Gorsuch, that result undercuts the purpose of the First Amendment, which is intended to act as a buffer against government restriction of speech, not assist it.  Thus, he felt severance was an insufficient response.

Ultimately, 7 Justices agreed that severance of the government debt exception was the proper remedy, while only two (Justices Gorsuch and Thomas) concluded that the entire TCPA should be struck down as an improper content-based restriction.

Impact

Unless a caller was relying upon the government debt exception to avoid liability under the TCPA, this decision does very little to change the status quo on TCPA enforcement and compliance.  The opinion did not wade into the contentious definition of an automatic telephone dialing system under the TCPA (which has become the subject of a widening Circuit split).  Accordingly, callers should remain vigilant whenever telemarketing and consistently audit their telemarketing procedures to avoid potential liability.

Advertising and Privacy Law Resource Center

On the same day that the FCC set a call blocking declaratory ruling for vote at its July 2020 Open Meeting, the FCC’s Consumer and Governmental Affairs Bureau issued rulings in two long-pending petitions for clarification of the requirements of the Telephone Consumer Protection Act (“TCPA”). Although these clarifications do not address the core questions regarding the definition of an autodialer and consent requirements that were remanded two years ago in ACA International v. FCC, they may signal an effort to clean up TCPA issues in what is expected to be the waning months of FCC Chairman Pai’s tenure at the Commission.

In the first ruling, P2P Alliance, the Bureau ruled that an automatic telephone dialing system (“ATDS”) is not determined by whether the equipment has the capability to send a large volume of calls or texts in a short period of time. Instead, the Bureau, while recognizing that the Commission’s interpretation of the ATDS definition remains pending, ruled that “whether the calling platform or equipment is an autodialer turns on whether such equipment is capable of dialing random or sequential telephone numbers without human intervention.” The Bureau also provides an illuminating discussion of the so-called “human intervention” element of prior FCC statements regarding autodialers.

In the second ruling, Anthem, Inc., the Bureau denied a petition to exempt certain healthcare-related calls from the TCPA’s consent requirements. In this order, the Bureau breaks less new ground and instead reiterates that prior express consent must be obtained before a call (or text) is made and that the supposed value or “urgency” of the communication does not necessarily make it permissible.

Besides these two petitions, the Commission has nearly three dozen petitions pending before it on a variety of matters relating to exemptions from the TCPA’s consent requirements, the collection and revocation of consent, the “junk fax” provisions, and other questions raised by the flood of TCPA class action litigation in the last five years. If the FCC begins addressing these other pending petitions, the course of TCPA class action litigation could change significantly.

In March 2018, the United States Court of Appeals for the D.C. Circuit issued a landmark rebuke of the FCC’s interpretation of the TCPA. The case, ACA International v. FCC, reviewed a 2015 Omnibus Declaratory Ruling on a variety of matters, the most notable of which was the FCC’s expansive interpretation of an “automatic telephone dialing system” (“ATDS”), the use of which triggers therobo TCPA’s prior express consent requirements and private right of action provisions. In ACA International, the court found the FCC’s interpretation “impermissibly broad” and remanded the case to the FCC for further consideration.

Since that time, the FCC has taken comment twice on the ACA International remand, but FCC Chairman Pai has focused the agency’s efforts on identifying and reducing illegal robocalls rather than addressing the remand. Chairman Pai has repeatedly said that unwanted automated calls is a top consumer complaint and he has pursued a multi-faceted approach to preventing or blocking those calls before they reach consumers.

The Commission has

authorized voice service providers to block incoming calls that “reasonable call analytics” identify as likely illegal calls,

mandated that service providers implement a call authentication framework to prevent unlawfully spoofed calls,

directed specific service providers to block certain calls or have their own calls blocked by other providers,

proposed multiple fines exceeding $100 million each for illegally spoofed calls, and

authorized a comprehensive database to identify when telephone numbers have been reassigned from a subscriber who may have given consent to a new subscriber.

Indeed, on the same day as the rulings we will discuss, the Commission set for a vote a proposal to provide a safe harbor for voice service providers that erroneously block calls in good faith and to establish protections against blocking critical calls by public safety entities.  According to an FCC staff report issued the same day, these actions are helping to reduce illegal robocalls.

The Anthem and P2P Alliance Rulings

Against this backdrop, the flood of TCPA class action cases has powered a rising tide of petitions for declaratory rulings addressing specific aspects of the TCPA’s requirements, from when consent is needed, how it may be obtained, and how it may be revoked. At Kelley Drye, we have chronicled these developments in our monthly TCPA Tracker and its accompanying FCC Petitions Tracker of the nearly three dozen pending petitions. The total number of petitions has risen slightly over time, as new petitions have modestly outnumbered decisions issued by the Commission.

P2P Alliance Petition (Two-Way Texting With Manual Intervention). In May 2018, the P2P Alliance, a group that represents providers and users of “peer to peer” text messaging services, sought a declaratory ruling that peer to peer messaging services did not involve an ATDS and thus were not subject to the restrictions on ATDS calls/texts contained in the TCPA. The petition sought a ruling with respect to text messaging services that enable two-way text communication, requiring a person to manually send each message. Although the Bureau declined to rule with respect to any specific platform – citing a lack of sufficient evidence regarding the how the platforms operate – the Bureau issued a ruling with several important clarifications.

First, the Bureau ruled that the ability of a platform or equipment to send “large volumes of messages” is not probative of whether that platform or equipment constitutes an ATDS under the TCPA. The Bureau declared that “whether the calling platform or equipment is an autodialer turns on whether such equipment is capable of dialing random or sequential telephone numbers without human intervention.”

This conclusion effectively puts to rest ambiguous statements in some prior orders that TCPA plaintiffs had argued brought any high-volume calling platform within the scope of the TCPA. Furthermore, the Bureau’s conclusion appears most consistent with decisions by several U.S. Courts of Appeal that have ruled an autodialer must employ a random or sequential number generator to meet the TCPA’s definition of an ATDS. The Bureau noted, however, that the “details” of the interpretation of an ATDS were before the Commission in ACA International so, until the Commission addressed that issue, the Bureau was relying solely on “the statutory definition of autodialer.”

The Bureau’s ruling contains an illuminating discussion of the so-called “human intervention” element of prior FCC statements regarding autodialers. Per the Bureau’s ruling, “If a calling platform is not capable of dialing such numbers without a person actively and affirmatively manually dialing each one, that platform is not an autodialer.” The Bureau explained the “actively and affirmatively” dialing standard as requiring a person to manually dial each number and send each message one at a time. Use of such technologies is not an “evasion” of the TCPA, the Bureau commented, because the TCPA “does not and was not intended to stop every type of call.”

Thus, while the full contours of the ATDS definition are still to be defined by the Commission, the Bureau’s P2P Alliance ruling helps to clarify that an “active and affirmative” manual process for sending calls or messages removes a platform or piece of equipment from the ambit of the TCPA. This ruling could buttress many district court rulings that have found sufficient human intervention in the operation of many calling or texting platforms.

Anthem Petition (Prior Express Consent for Healthcare-Related Calls). The Anthem petition addressed by the Bureau was filed in June 2015, one month before the FCC released the Omnibus Declaratory Ruling addressed in ACA International. (Anthem has a more recent petition addressing post-Omnibus order issues that remains pending.) In the June 2015 petition, Anthem asked the Commission to create an exemption for informational healthcare-related calls/texts initiated by healthcare providers and sent to existing patients, arguing that such communications were beneficial to patients and could be protected by an opt-out process it believed the Commission was then considering for ATDS calls. The Commission received limited comment in September 2015 (while the ACA International appeal was being litigated) and has received virtually no filings discussing the petition since that time.

In the ruling, the Bureau denied virtually all of Anthem’s requests, emphasizing instead the TCPA’s requirements for prior express consent for ATDS calls. Specifically, the Bureau ruled that “makers of robocalls generally must obtain a consumer’s prior express consent before making calls to the consumer’s wireless telephone number.”  (emphasis in original). It rejected Anthem’s request for an exemption permitting such calls, subject to opt-out, and repeated that the “mere existence of a caller-consumer relationship” does not constitute consent. Importantly, however, the Bureau affirmed prior statements that a consumer who has knowingly released their phone number for a particular purpose has given consent to receive calls at that number.

To the extent that the Anthem petition sought an exemption based on the “urgency” of healthcare-related communications, the Bureau declined to create such an exception, emphasizing, however, that the “emergency purposes” exception could apply to the extent the calls/texts satisfied the Commission’s rules and its recent COVID-19 Declaratory Ruling.

In the end, the ruling likely will not change the status quo for calls and texts being made today. The Bureau emphasized previous rulings requiring prior express consent and endorsed previous statements about how such consent may be obtained. Further, the Bureau affirmed the “emergency purposes” exception, although declining to expand its scope. Thus, entities making calls or texts following prior FCC guidance should not need to make any changes as a result of the Anthem ruling.

Looking Ahead

These decisions are not the broad rulings that many hoped for when ACA International was remanded to the FCC in March 2018. Chairman Pai was highly critical of the 2015 Omnibus order from the FCC (from which he dissented) and welcomed the ACA International decision. He has focused the agency on reducing unwanted calls prior to addressing the legal interpretations called for by the remand. Now, however, with those actions at an advanced stage and with his expected time as Chairman of the FCC about to end, many are wondering if the Pai Commission will revisit the ATDS definition, revocation of consent, and safe harbor questions remanded to it. Even if it does not, however, the Commission has nearly three dozen other petitions still pending, which could provide needed guidance on discrete issues that have arisen in TCPA litigation.

We don’t know at this time which way the FCC is likely to go, or even if it will address more TCPA issues during Chairman Pai’s tenure, but enterprises and service providers should watch the FCC closely over the next few months.

 

Advertising and Privacy Law Resource Center

Ad Law Access PodcastRecently the Second Circuit Court of Appeals issued an opinion providing its definition of an automatic telephone dialing system (ATDS) under the TCPA. That sets up a severe split of the Circuits with the Second and Ninth Circuits taking a broad approach while the Third, Seventh, and Eleventh Circuits have charted a narrower standard for defining an ATDS.

On the latest episode of the Ad Law Access Podcast, special counsel Paul A. Rosenthal provides an update on ATDS issues, walks through the different standards for an ATDS under the TCPA, and discusses where that leaves telemarketers and litigants going forward.

Listen on Apple, Google Podcasts, Soundcloud or Spotify.

For more information, sign up for our monthly TCPA Tracker and visit the Advertising and Privacy Law Resource Center for additional information on this and other topics.

Advertising and Privacy Law Resource Center

The current and future definition of what qualifies as an automatic telephone dialing system (ATDS or autodialer) remains a hotly debated and evaluated issue for every company placing calls and texts, or designing dialer technology, as well as the litigants and jurists already mired in litigation under the Telephone Consumer Protection Act (TCPA).  Last year, the D.C. Circuit struck down the FCC’s ATDS definition in ACA International v. FCC, Case No. 15-1211 (D.C. Cir. 2019).  Courts since have diverged in approaches on interpreting the ATDS term.  See, e.g., prior discussions of Marks and Dominguez.  All eyes thus remain fixed on the FCC for clarification.

In this post, we revisit the relevant details of the Court’s decision in ACA International, and prior statements of FCC Chairman Ajit Pai concerning the ATDS definition to assess how history may be a guide to how the FCC approaches this issue.

Continue Reading Taking Stock of the TCPA in 2019: What is an “Autodialer”?