Appeal from FCC's Omnibus TCPA Order Ready for Resolution

Last week, numerous parties appealing the FCC's July 10, 2015 omnibus TCPA Order filed a joint reply brief with the United States Court of Appeals for the DC Circuit.  That's the last step in their appeal process before oral argument and (hopefully a favorable) decision.

Their appeal focuses on three issues:

1. What is an "Automatic Telephone Dialing System"?

When Congress enacted the TCPA in 1991, it prohibited certain calls to wireless numbers made using an "automatic telephone dialing system," often referred to as an "autodialer." Congress defined "automatic telephone dialing system" as "equipment which has the capacity--(a) to store or produce numbers to be called, using a random or sequential number generator; and (b) to dial such numbers." In the July 10 Order, the FCC interpreted this definition, and in particular the word "capacity," to mean any telephone with the potential ability -- with modification, reconfiguration, or the downloading of new software -- to perform the specified autodialer functionalities.  In other words, if read strictly, the FCC concluded that the TCPA prohibits not just uninvited calls to wireless numbers made using the specialized dialing equipment that Congress targeted, but essentially all uninvited calls to wireless numbers from any modern phone, including a smartphone. The Order also made numerous statements about what functionalities are required for the phone to qualify as an autodialer, without providing clear guidance to callers that would enable them to determine if their phones are covered.  

Petitioner's challenged these two aspects of the Order as arbitrary, capricious, contrary to the language of the TCPA, and unconstitutional. In response, the government argues that the Order "does not necessarily" mean that smartphones are autodialers.  It claims that the FCC did not directly address the issue and that regular consumers who are sued for calling people using a smartphone are free to argue that such phones are not autodialers. The government also claims that the Order's discussion of what (potential) capabilities a telephone must have to qualify as an autodialer is not properly before the Court, even though that question was squarely presented to, and addressed by, the FCC.  Apart from its unfounded jurisdictional argument, the government seems to argue (although its position is far from clear) that any phone that can store and dial numbers automatically is an autodialer.  Of course, that would cover pretty much any phone, including a smartphone, and that interpretation completely reads the "using a random or sequential number generator" clause out of the statute entirely.

2. Are callers who obtained consent to call a cellphone number liable if the number is reassigned without the caller's knowledge?

When Congress enacted the TCPA it made clear that there is no liability for making calls to wireless numbers using an autodialer if they are made "with the prior express consent of the called party."  Given that more than 100,000 wireless numbers are reassigned every day, it's not surprising that sometimes caller who obtained consent to call a wireless number accidentally reach a new user the number, who did not provide consent to be called. In the Order, the FCC concluded that callers violate the TCPA by making such calls because the "called party" is the current subscriber or regular user of a number -- not the party the caller is trying to reach--even though the FCC acknowledged that there is no way for callers to learn of all reassignments.  To try to ease its blatantly unfair and unconstitutional interpretation (regulated parties must be given the opportunity to conform their behavior to comply with the law), the FCC granted a one call/text safe harbor so that callers might learn of the reassignment.  But after that they are strictly liable even if that one call goes unanswered or the single text not returned. 

On appeal, Petitioners argue that the FCC's interpretation renders the TCPA unconstitutional because it chills an excessive amount of speech by imposing strict liability for speech-related conduct where the speaker cannot avoid liability other than by not making calls even to people who have requested them.  They also argue that the FCC's interpretation is unreasonable, and that where faced with ambiguous language the FCC had an obligation to interpret the statute in a way that allows for compliance. Petitioners further argue that the FCC's one-call exemption does not save its interpretation, because the exemption fails to fulfill its objective of providing notice of the reassignment. In response, the government points to case law interpreting the consent provision in a way that supports the FCC's interpretation.  But those courts assumed that callers could readily learn of reassignments (something the FCC acknowledged is not possible), and they were not presented with the constitutional arguments raised by Petitioners.  The government also suggests that callers can avoid liability by manually dialing each person (presumably on a rotary phone) before calling or texting them using an autodialer to make sure the number has not changed. It's hard to even imagine how that would work for companies facilitating hundreds of thousands if not more text messages each day, such as many online social networks and mobile apps. The government further argues that the FCC's interpretation is likely to prompt industry to develop new methods of discovering reassigned numbers.  Perhaps, but that is of little comfort to parties that regularly make requested calls and texts to wireless numbers, and a theoretical industry solution cannot save an agency ruling that based on the current state of affairs is unlawful. 

3.  What counts as revocation of consent?

Finally, Petitioners challenge the Order's conclusion that consumers may revoke consent by "any reasonable means."  They argue that this aspect of the FCC's Order is arbitrary and capricious because compliance is impracticable, and it imposes burdens vastly disproportionate to any consumer benefit. The FCC could have established standardized methods to revoke consent (and it did so in the context of certain healthcare and financial calls), but instead, it adopted a regime that forces callers to determine what is "reasonable" in a particular context, and then implement new systems for ensuring that revocation by any reasonable means is noted and honored.  In response, the government argues that "reasonableness" is an acceptable standard, but it fails to address the cumulative burden of devising means to honor multiple "reasonable" means of revocation, and it fails to come forward with any consumer benefit from its expansive ruling.

Here are links to the parties' briefs:

The oral argument in the case should be scheduled in the next month or so.  

Stay tuned!