FCC TCPA Declaratory Rules Draw Objections

By Peggy Daley

On July 10, 2015, the FCC issued a Declaratory Ruling on the Telephone Consumer Protection Act (TCPA) in response to dozens of petitions for clarification filed by businesses and government agencies.[1] The ruling addressed key areas of the law where petitioners had sought clarification or relief. In this declaration, the FCC provided new interpretations of the TCPA that became effective as of the date of the order. In general, the ruling has been reported as broadening the scope of the TCPA in certain key areas, including the type of equipment and type of calls that fall under the TCPA.

Since the ruling was issued, multiple challenges to its findings have been filed. ACA International, a trade organization of companies engaged in debt collection, immediately filed a petition for review.[2] On July 14, 2015, the Professional Association for Customer Engagement (PACE), another trade association, filed a petition for review in the U.S. Court of Appeals for the Seventh Circuit.[3] That same day, Sirius XM Radio filed a similar petition for review with the U.S. Court of Appeals for the District of Columbia Circuit.[4] Both Sirius XM and PACE are represented by counsel at Jones Day.

PACE and Sirius XM challenge the FCC’s “expansion” of the TCPA’s reach by including calls to wireless numbers made from equipment that lacks the present capacity to store or produce telephone numbers to call using a random or sequential number generator.[5] Both petitions ask that the FCC’s Declaratory Ruling be vacated.

On July 24, 2015, the Judicial Panel on Multidistrict Litigation consolidated these petitions and randomly assigned the three appeals to the U.S. Court of Appeals for the DC Circuit.[6] These petitions will be closely watched, as the number of TCPA cases and the amounts at issue in these cases have skyrocketed in recent years. Reportedly, only 14 TCPA cases were filed in 2008. In 2014, 2,336 such suits were filed.[7] TCPA cases reportedly are now the second-most-filed type of case in federal courts nationwide. The top four TCPA class-action settlements in 2014 totaled over $175,000,000.[8]

The headlines from the July 10, 2015, FCC Declaratory Ruling include the following:

  • Capacity: Clarifying that the TCPA provision that defines automatic telephone dialing system (ATDS) equipment, which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator, should be defined broadly. The FCC ruled that use of the term “capacity” does not exempt equipment that is not currently configured to make random or sequential calls. It is sufficient to be included in the definition if the equipment has this potential functionality. The FCC noted that this interpretation has “outer limits” but did not provide examples of those limits.
  • Revoking Consent: The FCC clarified that consumers have the ability to revoke prior consent to contact by using any “reasonable manner” to do so. The FCC noted that the TCPA’s purpose is consumer protection that supports the rights of consumers to revoke consent “in any manner that clearly expresses a desire not to receive further messages.” The FCC specifically barred callers from designating an exclusive method to revoke consent.
  • Reassigned Numbers: Calls to numbers where consent previously existed but had been reassigned by the carrier without the knowledge of the caller has caused concern. The FCC stated that the TCPA requires the consent of the “current subscriber” or the “non-subscriber customary user” of the phone. The FCC declined to interpret the phrase “called party” to be the “intended recipient,” as urged by some petitioners. The FCC allowed for an “on-call exemption” for callers who make calls without knowing of a reassignment and who have a reasonable basis to believe they have valid consent. After this one call, the FCC deems the caller to have constructive knowledge of the reassignment.
  • Wireline to Wireless Reassignment: The FCC ruled that the reassignment of a wireline phone to a wireless cell phone does not act as a revocation of prior consent. The consumer must also indicate he or she no longer wants to receive calls in order to revoke the earlier consent.
  • Relinquishment: The FCC noted that nothing in the TCPA prevents callers creating through contract an obligation for persons providing consent to notify the caller when the number has been relinquished.
  • Text Messaging and Internet-to-Phone Messaging: The Declaratory Ruling noted that SMS text messages fall under the TCPA and are treated the same as voice calls. It rejected the notion that they are more fairly treated in the same manner as instant messages or emails. The FCC further state that Internet-to-phone text messages are the equivalent of phone-to-phone SMS text messages and fall squarely within the provisions of the TCPA. Equipment used to send Internet-to-phone messages is considered ATDS equipment under the TCPA. The FCC also found that a one-time text message in response to a consumer request would not be considered telemarketing.
  • Bank and Healthcare Calls and Texts: The FCC granted exemptions to the TCPA as long as certain conditions were met for bank messages about (1) potential fraud or identity theft; (2) data security breaches; (3) steps to take to prevent identity theft following a breach; and (4) money transfers.[9]
  • The FCC also found that providing phone numbers to healthcare providers constitutes express consent for healthcare calls subject to HIPAA. It exempted from the TCPA calls within the scope of the consent provided. It also noted that the consent could be provided on behalf of an incapacitated person. Exempted were calls for which there is an exigency and a healthcare treatment purpose.[10]

 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.

[1] Federal Communications Commission, “Declaratory Ruling and Order in the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991,” CG Docket No. 02-278, WC Docket No. 07-135, FCC 15-72 (July 10, 2015).

[2] ACA International, “Petition for Rulemaking of ACA International in the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991” (January 31, 2014).

[3] See Prof’l Ass’n for Customer Engagement, Inc. v. FCC, No. 15-2489 (7th Cir. filed July 14, 2015) (“PACE Petition”).

[4] See Sirius XM Radio, Inc. v. FCC, No. 15-1218 (D.C. Cir. filed July 14, 2015) (“Sirius Petition”).

[5] PACE Petition at 2; Sirius Petition at 2.

[6] U.S. Judicial Panel on Multidistrict Litigation, “In Re: Federal Communications Commission in the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, FCC 15-72” (July 24, 2015).

[7] Lunsford, Patrick, “FDCPA Lawsuits Decline for Third Straight Year, But TCPA Suits Up 25%,” insideARM.com (January 23, 2015), accessed at: http://www.insidearm.com/daily/fdcpa-lawsuits-decline-for-third-straight-year-but-tcpa-suits-up-25/

[8] Sutherland Asbill & Brennan LLP, Redial: 2014 TCPA Year in Review (January 2015), accessed at: http://www.sutherland.com/portalresource/REDIAL2014TCPAYearinReview.pdf

[9] The conditions include that the messages (1) must be sent only to the number provided by the consumer to the financial institution; (2) must state the name and contact information for the financial institution; (3) must be strictly limited in purpose to the four exempted types of messages and not contain “telemarketing, cross-marketing, solicitation, debt collection, or advertising content”; (4) must be concise (for calls generally one minute or less, “unless more time is needed to obtain customer responses or answer customer questions,” and for texts, 160 characters or less); (5) must be limited to three per event over a three-day period for an affected account; (6) must include “an easy means to opt out”; and (7) the opt-out requests must be honored “immediately  .”

[10] Examples of exempted rulings include (1) appointment and exam confirmations and reminders; (2) wellness checkups; (3) hospital pre-registration instructions; (4) pre-operative instructions; (5) lab results; (6) post-discharge follow-up intended to prevent readmission; (7) prescription notifications; and (8) home healthcare instructions.

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