DC Circuit Strikes Down FCC's Ruling That Made Cell Phone Calls Illegal

Wait, the FCC made using a cell phone illegal? That can't be.

Believe it or not, its true—at least in some cases.

The FCC's 2015 Order

In 2015 the FCC issued a Declaratory Ruling and Order interpreting various portions of the Telephone Consumer Protection Act (TCPA). The TCPA prohibits anyone from making any non-emergency calls (or send any non-emergency texts) to a cell phone using an “autodialer” without prior express consent. An autodialer is defined in the law as equipment that has the “capacity” to store or produce telephone numbers “using a random or sequential number generator” and to dial such numbers. In its 2015 Order, the FCC determined that autodialers include not only equipment that currently has such capabilities, but also equipment that could be modified to have that capability in the future. In an important footnote, the FCC explained that software-controlled equipment falls into this category because the autodialer features “can be added to the equipment’s overall functionality through software changes or updates.” In other words, any communications equipment running software—practically every modern phone—is an autodialer. And using that phone to call anyone without their prior express consent is a violation of the TCPA.

The DC Circuit's Opinion

On Friday, March 16, 2018, the DC Circuit issued its long-awaited opinion in ACA International v. FCC, No. 15-2011, a case challenging the FCC's 2015 Order. The Court held that the FCC's expansive interpretation of the definition of an autodialer could not be sustained. According to the Court, the FCC's interpretation would "subject ordinary calls from any conventional smartphone to the Act’s coverage" which would give the Act an "eye-popping sweep." The Court explained that under the FCC's interpretation, an individual who sends text message inviting a friend of a friend to a party without prior express consent has committed a violation of the Act. And since each violation of the TCPA subjects an individual to a $500 penalty, a group text sent to ten people without prior express consent would result in a fine of $5,000. "It cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact." These anomalous outcomes, the Court held, "are bottomed in an unreasonable, and impermissible, interpretation of the statute’s reach." The FCC's broad definition simply did not pass judicial muster.

Why Does This Matter?

Although the DC Circuit's opinion focused on the Order's effects on individual cell phone users, it is unusual to see a TCPA action against an individual. Most often, claims are brought as class actions against corporate defendants. And, contrary to what some may wish, the claims are not limited to telemarketers. Companies have been sued under the TCPA for actions such as implementation of an email-to-text service and calling a customer who changed phone numbers. In fact, there are people who make their entire living being TCPA plaintiffs. The DC Circuit's opinion will not immunize companies that communicate with their customers by phone and text from TCPA claims, but it will provide more ability for those businesses to provide normal, expected, and desired information without having to turn to a rotary phone.