The Tide Is Turning: Ajit Pai Chosen To Head FCC

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On July 10, 2015, a sharply divided FCC issued a Declaratory Ruling and Order (the “July 2015 Order”) that missed the mark. The July 2015 Order purported to expand the scope of the TCPA through its unsupported redefinition of an “automatic telephone dialing system,” create an untenable one call “safe harbor” for reassigned number liability, and permit parties to revoke consent through any “reasonable” means. The July 2015 Order is presently on appeal in the D.C. Circuit, and there is hope that the Court, which heard argument on October 19, 2016, will undo its pronouncements, which have had broad implications for businesses that place calls and send text messages to consumers for telemarketing or informational purposes. These companies have faced potentially crushing liability through a huge wave of TCPA actions (both proposed class actions and individual claims) as well as pre-suit demands, many of which have been initiated by opportunistic plaintiffs’ lawyers and serial plaintiffs.

Hope takes many different forms, however, and the FCC itself may now be poised to wind back the clock on the statute and to offer meaningful protection and clarity to businesses that engage in good faith consumer outreach. The announcement yesterday that FCC Commissioner Ajit Pai will now serve as the Chairman of the FCC is good news for businesses that took solace in his blistering dissent from the July 2015 Order. That dissent expressed concern that the FCC’s interpretation of the ATDS definition “transforms the TCPA from a statutory rifle-shot targeting specific companies that market their services through automated random or sequential dialing into an unpredictable shotgun blast covering virtually all communications devices.” It also noted that, even if smartphone owners have yet to be sued, such suits “are sure to follow…. Having opened the door wide, the agency cannot then stipulate restraint among those who would have a financial incentive to walk through it.” And it explained that having consumers revoke consent in any “reasonable manner” can lead to absurd results if consumers are entirely free to individually and idiosyncratically select their mode and manner of revocation, asking whether such a rule would cause businesses to “have to record and review every single conversation between customers and employees…. Would a harried cashier at McDonald’s have to be trained in the nuances of customer consent for TCPA purposes? … The prospects make one grimace.”

Now-Chairman Pai’s scathing dissent expressed a clear understanding of the hurdles that the FCC was putting in the way of legitimate business activities that are useful to and wanted by consumers. And so now, with him at the helm, there are finally signs of smoother seas ahead for businesses concerned with navigating the TCPA.