Introduction
The U.S. Court of Appeals for the District of Columbia Circuit has rendered its decision examining key elements of the 2015 Federal Communications Commission (“FCC”) order regarding the Telephone Consumer Protection Act (“TCPA”). [1] A unanimous panel of the Court ruled that the FCC exceeded its authority under the TCPA in interpreting the statutorily-defined term “Automated Telephone Dialing System” (“ATDS”) and in crafting a one-call “safe harbor” with respect to reassigned telephone numbers. Specifically, the D.C. Circuit held that the FCC’s definition of ATDS was “unreasonably, and impermissibly, expansive.” The Court also held that while the FCC did not exceed its authority in defining “called party” under the TCPA to mean the current subscriber of a telephone number, the one-time exemption from liability for a call to a reassigned number for which the caller had previously obtained consent was arbitrary and capricious, and incompatible with the FCC’s called-party definition. The D.C. Circuit declined to issue its own interpretation of what constitutes ATDS and what rules should apply to calls to reassigned numbers. The Court did provide some guidance, however, on these subjects for future rulemaking by the FCC.
At the same time, the Court upheld the FCC’s (1) ruling requiring callers (that is, the entities placing the calls alleged to violate the TCPA) to honor all “reasonable” attempts by telephone subscribers to revoke previously-provided consent, and (2) exemption of certain healthcare-related calls from the provisions of the TCPA.
Background — the TCPA and the FCC’s 2015 Order
In relevant part, the TCPA, 47 U.S.C. § 227, [2] regulates the use of pre-recorded voice messages and ATDS equipment to make calls under certain circumstances. [3] The term ATDS is defined by the TCPA as any equipment having the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator” and “to dial such numbers.” [4]
Most notably for the purposes of the FCC’s 2015 Order, the statute prohibits the making of calls to cellular telephones using pre-recorded messages or ATDS without prior consent. [5] The TCPA exempts from liability any informational call that is “made with the prior express consent of the called party” and any telemarketing call that is made with “prior express written consent.” [6] At least two federal courts of appeals had previously held that TCPA consent must come from the “called party,” or someone acting on that person’s authority, and that the “called party” is the “current subscriber” to the wireless number called. [7]
The TCPA provides a private right of action under which a plaintiff may recover the greater of actual monetary loss or $500 per violation. [8] A court may treble the amount of damages upon a finding of a “willful or knowing” violation. [9] The TCPA places no cap on damages for claims brought individually or as a class action. [10]
In July 2015, the FCC issued an order that sought to clarify numerous aspects of the TCPA. Among other things, the FCC ruled that “dialing equipment generally has the capacity to store or produce, and dial random or sequential numbers (and thus meets the TCPA’s definition of ‘autodialer’) even if it is not presently used for that purpose, including when the caller is calling a set list of consumers.” [11] The FCC “agree[d] with commenters who argue that the TCPA’s use of ‘capacity’ does not exempt equipment that lacks the ‘present ability’ to dial randomly or sequentially,” [12] and suggested that “the capacity of an autodialer is not limited to its current configuration but also includes its potential functionalities.” [13] Thus, under the 2015 Order, equipment that does not have the present capability of functioning as an ATDS may nonetheless be found to constitute an ATDS based on the view that the equipment could, in theory, be modified to have such functionality. In reaching this result, the majority of FCC Commissioners failed to identify any modern telephone equipment that would not constitute an ATDS, other than a rotary-dial phone. [14]
Additionally, the FCC took the position that the statutory term “called party” means “the subscriber, i.e., the consumer assigned the telephone number dialed and billed for the call, or the non-subscriber customary user of a telephone number included in a family or business calling plan.” [15] Accordingly, for a caller to mount a consent defense to a TCPA claim, the FCC ruled that the caller must have actual consent from the current subscriber or “customary user” of the number. In cases of reassigned numbers, the caller’s subjective intent to place a call to the former subscriber of the number from whom the caller obtained consent was irrelevant. The 2015 Order instead provided that a caller may avoid liability only “for the first call to a wireless number following reassignment.” [16] In the FCC’s view, “the one-call window provides a reasonable opportunity for the caller to learn of the reassignment,” [17] and the FCC noted the existence of commercially available services that may provide notice of reassignment of wireless numbers. [18] The 2015 Order acknowledged that one call may not be sufficient to provide actual knowledge of reassignment of a wireless number, but stated that even in instances in which there is no actual notice, the caller should “bear[] the risk in situations where robocalls are placed to reassigned wireless numbers and the called party has not given his or her prior express consent.” [19]
The 2015 Order granted a limited exemption from the TCPA of certain types of “pro-consumer messages about time-sensitive financial and healthcare issues.” [20] With respect to consumer financial matters, the order exempted calls and text messages concerning prevention of fraudulent transactions or identity theft, data security breaches, and money transfers, subject to several conditions including that the calls or text messages: (1) are only placed to the number provided by the consumer to the financial institution; (2) state the name and contact information of the financial institution making the call; (3) are limited to the specific, urgent purpose and do not contain telemarketing or debt collection information; (4) are limited to less than one minute or 160 characters or less; (5) are limited to no more than three messages “per event over a three-day period for an affected account;” and (6) contain appropriate opt-out options for the called party. Also, a financial institution must honor any opt-out request immediately. [21]
Because the TCPA itself does not define the term “prior express consent” and contains no provision addressing whether “prior express consent” can be revoked, there had been some confusion over whether consent, once given, can be revoked. While some courts had expressed the view that once provided, consent under the TCPA cannot be revoked, those cases were in the minority, and the trend has been to construe the TCPA as permitting revocation of consent, despite the absence of any express statutory provision. [22] The 2015 Order clarified that a called party may revoke consent at any time and through any “reasonable means,” and that “[a] caller may not limit the manner in which revocation may occur.” [23]
The order further explained that “consumers may revoke consent...
