Robocalls – everyone has strong feelings about them. In many cases robocalls, or automated calls and text messages, serve a useful function (and not just for telemarketing). But unfortunately, they are often unwanted and/or fraudulent, and they are the largest source of consumer complaints to the FCC. In response, the FCC in 2015 issued a Declaratory Ruling and Order (“2015 Order”) intended to broaden the number of robocalls subject to the FCC’s enforcement powers under the Telephone Consumer Protection Act (TCPA). (Read our past blog coverage on the FCC’s 2015 Order if you want to brush up on the particulars.)
On appeal, though, the D.C. Circuit recently rejected several aspects of the 2015 Order, including the FCC’s controversially broad definition of “automatic telephone dialing system” (ATDS or autodialers) and its one-call safe harbor for calls made to numbers that have been reassigned to a new subscriber. On the other hand, the court upheld the FCC’s 2015 holding that callers may revoke their consent to calls in any reasonable manner. The ATDS and safe harbor issues were remanded back to the FCC, which will likely address the issues in new rulemaking proceedings, including a proceeding opened on March 23 seeking comments on ways to address the problem of unwanted calls to reassigned numbers.
In our four-part series, we break down the controversy over the definition of “autodialer,” the means by which consumers can revoke their consent to be called, the issue of consent for calls to telephone numbers that have been reassigned to new subscribers, the FCC’s new proceeding on using databases to minimize the impact of reassigned numbers, and what impact all of this might have on pending and future TCPA litigation.
Below is part one.
- The Debate Over Defining “Autodialer”
Defining automatic telephone dialing systems is key to a discussion of unwanted marketing calls, not only because they are the source of the term “robocalls,” but because critical portions of the TCPA and the FCC’s implementing rules prohibit use of autodialers to call wireless telephone numbers without the prior express consent of the called party. Callers have accordingly put some efforts into finding ways of using advanced technology while avoiding the use of equipment that meets the definition of autodialer. The TCPA defines the term as “equipment which has the capacity—A) to store or produce telephone numbers to be called, using a random or sequential number; and B) to dial such numbers.”
When the Commission considered the definition in its 2015 Order, it had to address the term “capacity”: does that mean the present capacity of the device, or its potential future capacity if modified with additional hardware or software? It chose to define autodialers more broadly as devices with the potential capacity to dial random or sequential numbers, even if that capacity could exist only through modifications to add hardware or software (as long as the modifications were not too theoretical or too attenuated). The FCC recognized concern by commenters (and then Commissioner, now Chairman, Ajit Pai) that its definition was so broad that it swept ordinary smartphones into the category of autodialers, since the capacities of smartphones can be significantly enhanced with additional software. And, including smartphones in the definition of autodialers is impactful, since every unconsented call using a smartphone could be considered a violation of the TCPA, even if the smartphone is not being used in an autodialing mode. But the Commission rejected the concern, noting that there was “no evidence that friends, relatives,” and others have brought TCPA lawsuits over the use of smartphones.
That argument did not go over well with the D.C. Circuit, which found the Commission’s definition to be unreasonable. Focusing specifically on smartphones, the Court found the reach of the FCC’s definition to be “eye-popping” and declared definitively that the Commission’s definition is based on “an unreasonable, and impermissible, interpretation of the [TCPA’s] reach. The TCPA cannot reasonably be read to render every smartphone an ATDS subject to the Act’s restrictions.” The Court went on to note that the “Commission’s interpretation would extend a law originally aimed to deal with hundreds of thousands of telemarketers into one constraining hundreds of millions of everyday callers.”
The Court noted the Commission’s argument that unless autodialer is defined this broadly, “little or no modern dialing equipment would fit the statutory definition.” The Court’s surprising response was that perhaps the term “automatic telephone dialing system” is outdated and now “inapplicable.” Of course, the FCC cannot change the statute, but the Court suggested that perhaps it could “fashion exemptions” that would prevent standard calls from smartphones being subject to TCPA enforcement. It’s possible the FCC will adopt the Court’s suggestion to create such an exemption as part of a rulemaking in response to the Court’s decision.
The FCC was also taken to task by the Court for failing to provide a clear description of the functionality necessary for a device to meet the definition of autodialer. The statute defines this functionality as the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator” and “to dial such numbers.” But, does the phrase “using a random or sequential number generator” mean that the device itself has to have the ability to generate random or sequential numbers, or can a device merely have the ability to automatically call a list of numbers generated outside of the device? This distinction has practical significance in regards to the nature of equipment used by callers. In any case, the Court held that the FCC’s Order unreasonably suggests both answers, and thus it remanded the issue back to the FCC for clarification.
Stay tuned for part two of our series, on consumer revocation of consent. If you have questions about TCPA compliance, please call us at (703) 812-0400 or visit us at www.fhhlaw.com.