DC Circuit Delay on FCC's 2015 TCPA Actions Has Parties Anxious, FCBA Panelists Say

The outcome could be appealed to the Supreme Court or spark a new FCC review of its TCPA framework, some speakers said. The "easiest path" would be for FCC Chairman Ajit Pai to "fix" rules that don't account for the complexities service providers face, said Latham & Watkins attorney Matt Brill, who represents cable companies. The prior FCC approved the TCPA items over a dissent from then-Commissioner Pai and a partial dissent from fellow Republican Michael O'Rielly (see 1506180046 and 1507130039). Pai was "quite angry" in his dissent, said attorney Hassan Zavareei of Tycko & Zavareei, who has a class-action practice focused on representing plaintiffs in consumer fraud cases. Zavareei backs the 2015 order and hopes Pai won't implement the views he expressed in 2015.

Carriers, retailers and others have been struggling with the prolonged legal limbo. It's like "Waiting for Godot," said Drinker Biddle attorney Laura Phillips, who counsels companies on TCPA compliance. Clients don't like the uncertainty, which can be worse than a bad ruling, she said. Up in the air are various FCC decisions, including the definition of "automatic telephone dialing systems" (autodialers), and the agency's general TCPA authority, said Mark Stone, FCC Consumer and Governmental Affairs Bureau deputy chief. Court clarification of the commission's ability to interpret the 1991 law would be helpful, he said.

A D.C. Circuit ruling could come "any day now," said Jeff Johnson, a Jones Day attorney on ACA International's briefs, who quipped he could have said the same thing for the past year. (The court typically issues opinions Tuesday and Friday.) He said Judge Cornelia Pillard, who's on the panel, may have been diverted by another case that resulted in a lengthy opinion, and he said there's no reason to believe the delay will be much longer. Expect the TCPA ruling to be complex and "500 million pages long," joked Leah Dempsey, Credit Union National Association senior director-advocacy and counsel.

The panel was "badly fragmented" at oral argument, Johnson said, with Senior Judge Harry Edwards seeming highly skeptical of certain FCC rules, and Judges Sri Srinavasan and Pillard basically on the other side. But even Srinavasan appeared "troubled" by the scope of the agency's decision making, while Pillard seemed the most deferential to the commission, Johnson said. He suspects Edwards will end up dissenting and industry challengers will appeal for Supreme Court review if they lose. If the FCC loses, he said Pai will face an "interesting choice" on whether to appeal or not.

If the FCC is reversed, Brill expects it to face "enormous" industry pressure to revisit the issues in a regulatory proceeding. It's also possible the court could remand the case to the agency. At best, an FCC requirement that autodialers get express consent when making calls to wireless numbers is a "reasonable" discretionary agency decision, not mandatory under the law, he said. The "simplest" solution would be to end the "meaningless" distinction between wireless and landline calls, he said, telling us afterward such harmonization should be to provide wireless calls relief, not extend the duty to landline calls.

Nobody expressed optimism Congress would intervene anytime soon and clarify the TCPA framework. There's some expectation that Pai's FCC can address the issue, Brill said.

Brill and other critics of the FCC rules said they recognize TCPA protections are needed to shield consumers from unwanted robocalling and other abuses. But they also said carriers and retailers need to be able to communicate with customers without being subjected to class-action lawsuits that amount to "shakedowns" and "extortion" for making legitimate calls or inadvertent mistakes.

Zavareei defended class-action suits as helping deter abusive market practices by holding perpetrators to account. He said Pai's fears about endless litigation over smartphones becoming autodialers haven't materialized. Johnson said one of the benefits of the legal limbo at the D.C. Circuit is that some trial judges are staying new lawsuits, awaiting the ruling. Kristi Thompson, FCC Enforcement Bureau Telecommunications Consumers Division deputy chief, said parties worried about violating TCPA rules should try to respect consumer preferences -- and hire good legal counsel. Will Maxson, assistant director of the FTC Division of Marketing Practices, outlined enforcement actions his agency has taken against robocallers that violate a telemarketing sales rule.