TCPA Updates Based on the Recent ACA Decision

TCPA Update

The decision by the U.S. Court of Appeals for the D.C. Circuit last month in ACA International v. Federal Communications Commission, No. 15-1211, puts yet another spin on the definition of an “automatic telephone dialing system” (ATDS), a central piece of the U.S. law intended to crack down on robocallers, the Telephone Consumer Protection Act (TCPA). Due to continued uncertainty with respect to the law’s application, companies would be well advised to continue to use caution when using “click to call” telephone dialing systems to call to consumers’ cell phones without prior written consent.

Background

The TCPA makes it “unlawful . . . to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system . . . to any telephone number assigned to a . . . cellular telephone service,” “unless such call is made solely to collect a debt owed to or guaranteed by the United States.” 47 U.S.C. § 227(b)(1)(A)(iii). The statute defines an “automatic telephone dialing system” as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. § 227(a)(1). The TCPA allows offenders to be sued for between $500 to $1,500 for each violation and has resulted in a significant amount of class-action litigation against companies.

Based on the definition of an ATDS, the Federal Communications Commission (FCC) took the position in a 2015 Order that the “capacity” of equipment to act as an autodialing system could allow such equipment to be considered an ATDS, even if no-autodialing functionality was being used when making a call, and even if such autodialing functionality was not installed in such equipment when the call was made. In addition, the FCC did not provide in the Order any specific guidance on exactly what systems involving human intervention in making a call would fall outside the definition of an ATDS, other than indicating a rotary telephone dialing system would not be an ATDS. Otherwise, the FCC indicated that such a determination should be done on a case-by-case basis.

As a result, the uncertainty arising from the 2015 Order had a direct impact on companies that routinely make calls to consumers, such as market research organizations that routinely conduct telephone surveys and polling as part of their research activities. Accordingly, subsequent to the FCC’s 2015 Order, the Council of American Survey Research Organizations issued guidance to its members recommending that “absent express consent to call or text using an autodialer, research companies manually dial wireless numbers on telephone equipment that is not presently, or with modification, capable of dialing numbers randomly or from a pre-loaded list. This may realistically mean hand dialing on a simple telephone.”

The D.C. Circuit’s decision

The D.C. Circuit decision in ACA set aside the FCC’s interpretation in the 2015 Order of the definition of an ATDS with respect to the “capacity” of equipment, finding it to be “utterly unreasonable in the breadth of its regulatory inclusion.” The court based its conclusion in large part on the FCC’s refusal to dismiss arguments that a normal cellphone that was being used on a normal basis might actually trigger a TCPA lawsuit, simply by virtue of it having the capacity to be used as an autodialer if additional software was installed, a conclusion the court found to be “eye-popping”. In addition, the court specifically called out the inadequacy of the FCC’s explanation of the features of an ATDS, making specific reference to the FCC’s refusal to clarify whether equipment would not be considered an auto-dialer unless it has the capacity to dial numbers without human intervention, and saying the FCC’s 2015 Order offered no meaningful guidance in terms of what basic functions in a dialing system might lead to it being classified as an autodialer.

Where does the ACA decision leave us?

Because the court in ACA removed the emphasis on equipment having the “capacity” to autodial as a factor in defining the equipment as an ATDS, and highlighted the importance of human intervention in making that determination, the decision may actually puts more importance on the method by which one dials the number. However, uncertainty remains regarding which systems fall outside the definition of an ATDS, based on the extent to which they require human intervention to make a call. The FCC is to continue to review the definition of an ATDS and will hopefully provide some additional clarity on these points shortly, but for the time being, this uncertainty for market research companies and other companies making calls to consumer’s cell phones will remain.