Worth the Wait! D.C. Circuit Vacates Key Portions of FCC’s July 2015 TCPA Order

At the Federal Communications Bar Association’s TCPA symposium in D.C. last month, panelists from the Federal Communications Commission (FCC) and private practice expressed uncertainty regarding when the D.C. Circuit would issue its much-anticipated ruling in the appeal of the FCC’s July 2015 Declaratory Ruling and Order (the “2015 Order”). It turns out that that day is today. And the ruling was well worth the wait.

The D.C. Circuit’s ruling upheld the FCC’s approach to revocation of consent (permitting revocation through any reasonable means) and the scope of the healthcare exemption, but it set aside the FCC’s expansive definition of an “automatic telephone dialing system” (ATDS) and its untenable approach to liability for communications to reassigned telephone numbers.

ATDS: Petitioners prevailed in whole as to the interpretation of the ATDS definition, with the Court setting aside that portion of the 2015 Order, which had held that the word “capacity” refers not to equipment’s present capacity today but rather to its potential capacity next month or even next year. The Court agreed with Petitioners that the FCC’s approach was overbroad—so overbroad, in fact, that it would even encompass smartphones. In addition, the Court reached back to prior FCC rulings (dating back to 2003) that had “clarified” the statutory definition to include equipment that dials from a stored list of numbers, such as predictive dialers (while dispensing with the requirement of generating random or sequential numbers); and other notoriously inconsistent FCC pronouncements as to human intervention and other issues. The Court concluded that the FCC’s position was so unclear that its “treatment of those matters” should be set aside.

Reassigned Numbers: The Court also found that the FCC’s one-call safe harbor for calls to reassigned numbers was arbitrary and capricious. It upheld the FCC’s interpretation that “called party” referred to the current subscriber, but it found that the one-call safe harbor was contrary to the “reasonable reliance” standard the FCC had otherwise adopted. The Court noted that the 2015 Order had permitted the caller to rely on consent given by the number’s customary user (e.g., a close relative), whereas the one-call-only approach was inconsistent with that approach. Rather than just redline the safe harbor, the Court set aside the Commission’s treatment of reassigned numbers as a whole. The Court noted in this regard the FCC’s current rulemaking regarding the reassigned numbers database.

Revocation of Consent: While upholding the portion of the 2015 Order that allowed consumers to revoke consent through any reasonable means, the Court highlighted the FCC’s concession that the ruling did not address contractual provisions that specify the means of revoking consent. That is good news, insofar as it preserves other court rulings that have enforced the law of contract in this area.

The FCC will likely go back to the drawing board on the ATDS and the reassigned numbers issues, now under the auspices of Commissioner Pai. Today’s opinion provides some significant guideposts for the agency’s further rulemaking in this area. Given the vigorous dissents to the 2015 Order on these very issues by Chairman Pai and Commissioner O’Rielly, this is a promising development for businesses seeking to communicate with consumers.

FCC Releases Draft Second Further Notice of Proposed Rulemaking on Reassigned Numbers Database

In anticipation of its March 22 Public Meeting, the FCC on March 1 released a draft of a Second Further Notice of Proposed Rulemaking addressing comments received on its earlier Notice of Inquiry on proposals for a database to identify reassigned numbers (FNPRM). The FNPRM was released alongside the FCC’s Public Meeting Agenda. The draft FNPRM primarily seeks comment on: (1) the specific information that callers would need from any reassigned number database; and (2) the best way to make that information available to callers. The draft will be considered for adoption by the full Commission at the meeting. Continue reading   »

FCC and FTC Announce Two Upcoming Joint Events Aimed at Combatting Illegal Robocalls

On March 7, 2018, the Federal Communications Commission and the Federal Trade Commission issued a joint announcement regarding two upcoming events “aimed at furthering the fight against illegal robocalls and caller ID spoofing.” The announcement states that the events will “highlight cooperative efforts by the two agencies to combat illegal calls and promote innovative solutions to protect consumers.” The first event is a policy forum the two agencies will be co-hosting on March 23, 2018. The agencies intend to discuss “the regulatory challenges posed by illegal robocalls and what the FCC and FTC are doing to both protect consumers and encourage the development of private-sector solutions” at the forum. Additional information on the forum is available here. The second event is an expo the two agencies will be co-hosting on April 23, 2018. The Stop Illegal Robocalls Expo will showcase “technologies, devices, and applications to minimize or eliminate the illegal robocalls consumers receive.” Additional information on the expo, including how to participate in the expo, is available here.

To Plaintiffs’ Dismay, SCOTUS Likely Won’t Review ‘Case-Killer’ TCPA Decision

Prior to the Supreme Court’s denial of petition for certiorari filed by the class action plaintiffs in  Bais Yaakov of Spring Valley v. FCC (an appeal we have been monitoring since the briefing in the D.C. Circuit up through the recent cert petition briefing), TCPA Blog contributor Justin Kay spoke with Legal NewsLine about the petition and the Supreme Court’s likely response. Continue reading   »

Federal Communications Bar Association Hosts TCPA and TSR Program in Washington, D.C.

On February 15, 2018, leaders from the government and private practice came together to discuss the current TCPA and TSR legal and compliance landscape, as well as where the FCC and FTC are likely to direct their efforts going forward.  The Federal Communications Bar Association’s Privacy and Data Security Committee assembled two tremendous panels to discuss these hot-button issues. Continue reading   »

Class Decertified: Wireless Provider’s Data Demonstrates Individualized Issues of Consent

The United States District Court for the Northern District of Illinois recently decertified a class after the defendant, Yahoo! Inc., submitted new evidence showing that tens of thousands of putative class members may have consented to receive the text messages at issue. See Johnson v. Yahoo! Inc., No. 14-2028 (N.D. Ill. Feb. 13, 2018).

The dispute relates to the Yahoo! Messenger service, which allows Yahoo! users to send text messages to cell phones. After a user would send an initial text message to a specific cell phone number, Yahoo! would send an additional “Welcome Message” text message to that number: “A Yahoo! user has sent you a message. Reply to that SMS to respond. Reply INFO to this SMS for help or go to y.ahoo.it/imsms.” The plaintiff alleges that these Welcome Messages violate the TCPA based on a theory that Yahoo! did not have the “prior express consent” of the “called party” (the third party to whom the Yahoo! user had sent the original text message). Continue reading   »

Second Circuit Again Rejects TCPA Claims Over Health Care Calls

The Second Circuit yesterday delivered a ruling that was widely expected but also widely welcomed by health care providers struggling to provide patients with important reminders while avoiding massive TCPA class action liabilities. Zani v. Rite Aid Hdqtrs. Corp., 17-1230-cv (Feb. 21, 2018), affirmed summary judgment in favor of Rite Aid over its prerecorded flu shot reminder calls. We wrote about the lower court decision in Zani here. The Second Circuit’s ruling came as no surprise because the same court last month ruled for another health care provider in rejecting TCPA claims over flu shot reminder texts. We analyzed that case, Latner v. Mount Sinai Health System, Inc., 879 F.3d 52 (2d Cir. 2018), here. Indeed, finding that the issues in Zani were “virtually identical” to those in Latner (Opinion, p. 5), the Second Circuit delivered its latest ruling in a non-precedential summary order. Continue reading   »

Supreme Court Denies Petition Seeking Review of D.C. Circuit Fax Decision Holding that FCC Exceeded Its Authority

The Supreme Court today denied the petition for certiorari filed by the class action plaintiffs in Bais Yaakov of Spring Valley v. FCC, thus leaving in place the D.C. Circuit’s ruling that “although the [Telephone Consumer Protection Act] requires an opt-out notice on unsolicited fax advertisements, the Act does not require a similar opt-out notice on solicited fax advertisements . . . . [nor does it] grant the FCC authority to require opt-out notices on solicited fax advertisements.”  852 F.3d 1078, 1082 (D.C. Cir. 2017).  Our summary of the briefing on the petition is available here.

As we’ve discussed previously, the D.C. Circuit’s ruling (binding nationwide pursuant to the Hobbs Act) makes it much tougher for plaintiffs in TCPA fax suits to certify a class.  The plaintiffs’ bar has typically sought to certify classes based on violations of the opt-out notice requirement for solicited faxes, because a class defined in such a way side-stepped the inherently individualized issue of whether the fax was solicited or not. With the opt-out notice requirement for solicited faxes eliminated, plaintiffs’ attorneys have a much tougher challenge.  Indeed, in Alpha Tech Pet, Inc. v. Lagasse, LLC, No. 16 C 513, 2017 U.S. Dist. LEXIS 182499 (N.D. Ill. Nov. 3, 2017), a district court relying on the D.C. Circuit’s decision found that individualized issues of consent precluded certification of a class of fax recipients where certification could not be premised on whether the faxes included an opt-out notice.  The plaintiff in Alpha Tech has appealed that decision, arguing (among other things) that the D.C. Circuit’s decision is not binding in the Seventh Circuit.  Given the significance of this issue for the plaintiff’s bar, we can expect to continue to see collateral challenges like this to the repeal of the FCC’s solicited fax rule notwithstanding that the D.C. Circuit’s decision in Bais Yaakov is now final.

Ninth Circuit Affirms Summary Judgment for Defendants, Rejects Plaintiff’s Vicarious Liability Theory

The Ninth Circuit recently affirmed summary judgment for five defendants—three payday lenders and two lead-generation vendors—in a certified class action where it was undisputed that the text message at issue violated the TCPA.  See Kristensen v. Credit Payment Servs. Inc., 879 F.3d 1010 (9th Cir. 2018).  Rejecting Plaintiff’s ratification theory, the court held that the defendants were not vicariously liable for the actions of a non-party “publisher,” AC Referral—the entity that initiated the text.  The Ninth Circuit’s opinion provides useful guidance as to scope of TCPA liability for all players involved in an SMS campaign, particularly those that do not actually press “send.” Continue reading   »

Briefing Concludes on Cert Petition Seeking Supreme Court Review of D.C. Circuit Fax Decision

On January 30, 2018, briefing closed on the petition for certiorari filed in the Supreme Court by the class action plaintiffs in Bais Yaakov of Spring Valley v. FCC.  The class action plaintiffs are seeking review of the D.C. Circuit’s March 2017 decision (discussed at length here, here, here, and here) holding that the FCC exceeded its statutory authority when it promulgated regulations in 2006 requiring that a fax advertisement sent with the prior express consent of the recipient include an opt-out notice because “although the Act requires an opt-out notice on unsolicited fax advertisements, the Act does not require a similar opt-out notice on solicited fax advertisements . . . . [nor does it] grant the FCC authority to require opt-out notices on solicited fax advertisements.”  Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078, 1082 (D.C. Cir. 2017). Continue reading   »