FCC Majority Praises DC Circuit Partial Reversal of 2015 Robocalling Order on TCPA Limits

A D.C. Circuit panel partially granted and partially denied challenges to the FCC's 2015 declaratory ruling in a 3-0 opinion written by Judge Sri Srinivasan and joined by Judges Cornelia Pillard and Harry Edwards in credit and collection association ACA International v. FCC, No. 15-1211 (see 1803160006). The judges upheld the commission's approach to revoking consumer consent "through any reasonable means clearly expressing a desire to receive no further messages from the caller," and affirmed the scope of an agency exemption "for time-sensitive healthcare calls."

But they set aside the regulatory "effort to clarify the types of calling equipment that fall within the TCPA's restrictions," which they said "would appear to subject ordinary calls from any conventional smartphone to the Act's coverage," an "unreasonably expansive interpretation." They also vacated the FCC's approach to calls made to numbers reassigned from people who had given consent, ruling the agency's "one-call safe harbor, regardless of whether the caller has any awareness of the reassignment" is arbitrary and capricious, "at least as defended in the order."

The decision is "yet another example of the prior FCC’s disregard for the law and regulatory overreach," Pai said. "As the court explains, the agency’s 2015 ruling placed every American consumer with a smartphone at substantial risk of violating federal law. ... Instead of sweeping into a regulatory dragnet the hundreds of millions of American consumers who place calls or send text messages from smartphones, the FCC should be targeting bad actors who bombard Americans with unlawful robocalls. That’s why I’m pleased today’s ruling does not impact (and, in fact, acknowledges) the current FCC’s efforts to combat illegal robocalls and spoofing." He said the FCC will "continue to pursue consumer-friendly policies" -- from "reducing robocalls to reassigned numbers to call authentication to blocking illegal robocalls" -- and maintain its "strong approach to enforcement against spoofers and scammers, including the over $200 million in fines" proposed last year.

Officials React

The ruling won't spark more illegal robocalls, but removes "unnecessary and inappropriate liability concerns for legitimate companies trying to reach their customers who want to be called," O'Rielly said: "It rejects the former Commission’s misguided interpretation of the law, inappropriate expansion of scope, and irrational view of reassigned numbers." He disagrees with the court's revocation decision but believes further review could "square it with the Second Circuit’s more appropriate approach.”

The "prior FCC exceeded the scope of the TCPA and reached a decision of 'eye-popping sweep,' as today’s D.C. Circuit decision states," Carr said. "Rather than focusing our efforts on combatting illegal robocalls, the 2015 FCC decision opted to subject consumers and legitimate businesses to liability."

“Robocalls are already out of control," Rosenworcel said. "One thing is clear in the wake of today’s court decision: robocalls will continue to increase unless the FCC does something about it. That means that the same agency that had the audacity to take away your net neutrality rights is now on the hook for protecting you from the invasion of annoying robocalls. It’s past time for the American public to get a serious response from the FCC.”

Sen. Ed Markey, D-Mass., urged the FCC to “use its existing authority to reestablish robust, enforceable protections to enhance the precious zone of privacy created” in TCPA. If it fails “to address this matter and preserve the intent of the law, I will work with my Congressional colleagues legislatively to restore these commonsense protections,” Markey said in a statement.

Industry Pleased

Telecom attorneys were laudatory and urged FCC actions to reduce uncertainty and litigation, seemingly confirming Latham and Watkins attorney Matt Brill's recent prediction that reversal would spark pressure for revisiting the issues (see 1802160018).

“Well-meaning companies have labored for too long trying to comply with a patchwork of confusing agency rules, orders and declaratory rulings," emailed Wiley Rein's Megan Brown. "The Court rebuffed the FCC’s justifications. The issues now go back to the FCC, which has a chance to bring much needed clarity to an area of the law that has become little more than a trap, sprung by lawyers who make millions and do not benefit consumers. The FCC should seize the moment, and address TCPA reform.” Wiley Rein colleague Scott Delacourt added, "The decision is a win, too, in removing a judicial cloud that will enable the FCC to act on a number of important TCPA issues now before the agency.”

The FCC must reconsider TCPA's scope by again "addressing the definition of 'ATDS' [automatic telephone dialing systems], but this time with the D.C. Circuit's rigorous analytic standards in mind," emailed Eric Troutman of Dorsey & Whitney. Pai "has expressed his support for industry-friendly reforms to the TCPA," so the ruling should "result in real change," Troutman said, adding: "This is exciting stuff and very promising for TCPA defendants." The decision "is a major victory for good-faith callers that have long-supported reasonable interpretations of the statute and clear rules of the road to protect consumers," emailed Mark Brennan of Hogan Lovells. "As the court stated, major pieces of the FCC’s 2015 decision were 'utterly unreasonable' and 'considerably beyond' the scope of its authority, leaving callers with no practical way to avoid abusive class-action litigation even for critical, time-sensitive non-marketing calls.” Kelley Drye attorney Steve Augustino and colleagues offered a blog post overview of the case.

“Plaintiffs’ lawyers are exploiting the TCPA’s outdated language to bring abusive and costly class action lawsuits against businesses," said Lisa Rickard, U.S. Chamber Institute for Legal Reform president. "The court’s ruling today is a positive step -- a fresh chance for the FCC to revisit its overly expansive definition of 'auto-dialer,' applying the TCPA to calls made to reassigned numbers without the callers’ knowledge and a related one-call safe harbor. Unfortunately, for now, today’s ruling also keeps anything-goes rules in place to revoke consent to be contacted, and it underscores the need for Congress to update the TCPA."

University of Nebraska law professor Gus Hurwitz called the ruling "pretty great" and a "striking rebuke" of the "breathtaking overreach" of the prior FCC's decision that any smartphone could be an ATDS. "But the more interesting, and I think important, part of the opinion is the court's rejection of the reassigned numbers rules and its discussion of revocation of consent to be called," he emailed. "The court notes and speaks positively about Chairman Pai's efforts to develop a system to manage reassigned numbers. Most important, the discussion of how to determine and revoke consent suggests a path forward for both industry and future Commission rules."

Consumer advocates urged the FCC to ensure protections against unwanted robocalls. “Recognize that the TCPA is an essential shield for consumers to protect themselves,” said Margot Saunders, senior counsel at the National Consumer Law Center. The ruling means consumers "will be hit with even more unwanted calls,” said Maureen Mahoney, policy analyst for Consumers Union, in the same release. “The FCC acted within its authority when it passed the rules in 2015 to provide necessary consumer protections for a growing problem. Consumers should have the right to control the calls that they receive and they deserve the strongest possible protections."