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Appeals Court Vacates Some FCC Rules on Robocalls

March 19, 2018

WASHINTON, D.C. — A federal appeals court rolled back rules aimed at curbing the more than 200,000 robocall-related complaints the Federal Communications Commission (FCC) says it receives annually, noting that the agency’s 2015 ruling “invites the conclusion that all smartphones are autodialers.”  

In its 3-0 ruling, the D.C. Circuit Court of Appeals vacated key elements of the FCC’s 2015 declaratory ruling and order under the Telephone Consumer Protection Act (TCPA), including the commission’s explanation of which devices qualify as automated telephone dialing systems, and its “approach to calls made to a phone number previously assigned to a person who had given consent but has since been reassigned to another, nonconsenting person.”

“We uphold the commission’s approach to revocation of consent, under which a party may revoke her consent through any reasonable means … We also sustain the scope of the agency’s exemption for time-sensitive healthcare calls,” the D.C. Circuit Court wrote in its opinion, in part. “We set aside, however, the commission’s effort to clarify the types of calling equipment that fall within the TCPA’s restrictions. The commission’s understanding would appear to subject ordinary calls from any convention smartphone to the act’s coverage, an unreasonably expansive interpretation of the statute.

As for the TCPA’s approach to calls made to a phone number previously assigned to an individual who had given consent but has since been reassigned to another, nonconsenting person, the court determined that the one-car safe harbor “is arbitrary and capricious.”

The challenge of the FCC’s rules was brought by ACA International within hours of the commission’s July 2015 TCPA order. The association of credit and collection professionals argued in its petition that the FCC’s exercise of regulatory authority expanded the scope and reach of the TCPA in a way Congress never intended. ACA’s appeal, as well as subsequent appeals filed by nine other businesses and organizations, was later centralized in the D.C. Circuit by the Judicial Panel on Multidistrict Litigation.

“We applaud the court for making the right decision today because it supports legitimate, law-abiding businesses and recognizes that technological advancements in the ways people communicate are good for society as a whole,” said ACA International CEO Mark Neeb. “Clearly, the court’s opinion in ACA Int’l is one of the most significant impacting the TCPA and the TCPA rules going forward.”

In July 2015, the National Automobile Dealers Association urged its members to review their telephone and text marketing practices to ensure they were compliant with the FCC’s omnibus ruling and order. Among the changes that impacted dealers, the associated noted, was the TCPA’s interpretation of the term “automatic telephone dialing system,” which encompasses “dialing equipment that has the capacity to store or produce, and dial random or sequential numbers.”

The FCC’s order was part of the Federal Government’s nearly three-decade effort to combat unwanted robocalls, which began with the enactment of the TCPA in 1991. Congress also empowered the Federal Trade Commission to regulate the telemarketing industry under the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994. The FTC’s measures included a general bar against calling any telephone number on the “do-not-call registry” without consent or an established relationship.

While some of the commission’s restrictions on telemarketing calls mirror measures established by the FTC, only the TCPA specifically restricts the use of an “automated telephone dialing system” to make calls. Last Friday’s ruling centered on the FCC’s attempt to clarify the types of calling equipment that fall within the TCPA’s restrictions in its 2015 ruling and order.

“In the Telephone Consumer Protection Act  (TCPA), Congress enacted provisions to help combat the unwanted robocalls that have become a far too common nuisance for far too many Americans,” FCC Commissioner Brendan Carr said in a statement. “Unfortunately, the prior FCC exceeded the scope of the TCPA and reached a decision of ‘eye-popping sweep,’ as today’s D.C. Circuit decision states. Rather than focusing our efforts on combatting illegal robocalls, the 2015 FCC decision opted to subject consumers and legitimate businesses to liability. Thankfully, the D.C. Circuit, in a unanimous decision, has now corrected that error.”

That’s not how all commissioners viewed the ruling. “Robocalls are already out of control,” said FCC Commissioner Jessica Rosenworcel. “One thing is clear in the wake of today’s court decision: robocalls will continue to increase unless the FCC does something about it. That means that the same agency that had the audacity to take away your net neutrality rights is now on the hook for protecting you from the invasion of annoying robocalls.”

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