3 true takeaways in ACA international, et al. v. FCC – Why their loss may not be our win - Yet

One of the underpinnings of the United States system of jurisprudence is the opportunity afforded individuals to have their day in court – although often, the desire to have a claim litigated clouds one’s ability to weigh the true legal and financial costs associated with that pursuit.

Many litigants are surprised when a court does not rule in their favor, or worse yet, interprets a law in a way that compounds the very issue for which the litigant sought relief.

For some, the D.C. Circuit Court of Appeals decision in ACA International, et al. v. FCC, et al., No. 15-1211; was a bit of a surprise. It fell short of providing the clarity so desperately needed surrounding compliance with the Telephone Consumer Protection Act (TCPA). But for most of us, we very much understand this decision is pivotal, impactful and a very positive step on a very long walk to relief from liability under that law’s policies.

ACA International should be applauded for doggedly fighting the TCPA battle and for taking the leadership role on this issue. It is to the ACA’s credit, on March 16, 2018, the D.C. Circuit issued its long-awaited ruling in resolving a series of challenges to the July 10, 2015 Declaratory Ruling & Order of the Federal Communications Commission (FCC) implementing the TCPA, In the Matter of Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling & Order, 30 FCC Rcd. 7961 (2015) (Order).

So, time to dust off your dialer? Not yet. But these are the three true takeaways you can bank on:

1. We are Back to the Future – Definition of “Dialer” Drops Back to pre-2015 FCC Order
The Court, in ACA v. FCC, basically eviscerated the FCC’s Order in two areas. First, the Court completely rejected the FCC’s expansive definition of automatic telephone dialing system (ATDS). The Court explained that the FCC exceeded the authority granted to it by Congress by ruling in its 2015 Order:
● All predictive dialers satisfy the definition of an ATDS; and
● Any equipment having the future, potential capacity to dial predictively also meets the definition of an ATDS, whether that capacity is used to make the call or not.

This leaves us in a quandary. In one sense, we know less about the definition of an ATDS today than we did before this decision was rendered. On the other hand, it is now fair game to argue only the statutory definition of ATDS controls. The statute defines an “automatic telephone dialing system” (ATDS, or autodialer) 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 FCC will have to use its rulemaking authority, or the courts will have to use theirs to interpret the letter of the law before we will have a static definition of ATDS. In either case, resolution of what exactly constitutes an ATDS under the TCPA will probably take years.

I doubt the now-conservative, Republican majority on the FCC has any appetite to re-engage the TCPA rulemaking process any time soon. But ACA may push the FCC to do so.

Remember: This is an unsettled area of the law. Now is not the time to cavalierly launch predictive dialing campaigns to cells without the express consent of the consumer. Stay the course.

2. The One- Free-Call Rule Isn’t Free Anymore – Safe Harbor No Longer Exists
The Court rejected the FCC’s adoption of their one-free-call safe harbor for autodialed calls mistakenly made to cells without consent because the numbers were reassigned. To paraphrase, the Court interpreted the FCC’s addition of a one-free-call safe harbor as an exercise in creative writing rather than a respectable attempt at legislative construction. In its opinion, the Court found the FCC’s decision to provide a safe harbor for a single autodialed call made to a reassigned cell number, or a single prerecorded message left on cell using a reassigned cell number both arbitrary and capricious.

Going forward, calling parties must ensure calls or text messages placed to cells using an ATDS or prerecorded messages left on cells associated with a reassigned number are either made with the consent of the party associated with the cell, or recognize they may become the poster child for the test case on this issue.

As a result, the need to scrub cell numbers to determine the likelihood the number is associated with the party who granted consent is more important than ever.

3. TCPA Consent is Easy to Obtain, TCPA Consent Must Also be Easy to Revoke
No change in law here. The Court affirmed the FCC’s ruling that consumers may revoke their consent under the TCPA using any reasonable means. Keep in mind, absent specific language to the contrary, consent to autodial or leave a prerecorded message on a consumer’s cell phone is limited to that particular credit transaction and should not be applied broadly across all accounts subject to collection without the express consent of the consumer with regard to all accounts. However, when it comes to revocation of consent, companies should be careful about limiting the application of a consumer’s revocation of consent to a single account. To be safe, I suggest companies that call or text message consumers or leave pre-recorded messages, on cells, interpret a consumer’s request for revocation broadly to avoid a lawsuit over the scope and breadth of the consumer’s revocation of consent.

Companies should remain diligent in their commitment to track the source and date of consent as well as the source and date of revocation.

While the court’s decision may provide temporary relief from some of the most punitive aspects of the TCPA, lower courts will now have to fill the gap left by the D.C. Circuit’s partial vacatur of the FCC’s Order. Notwithstanding this victory, companies should be mindful of the ongoing litigation risks of communicating with prospective and current customers using telephones and other emerging technologies.

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