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Posts Tagged ‘FCC’

Bipartisan TRACED Act Enhances Penalties for Illegal Robocalls

Posted on: December 7th, 2018

By: Matt Foree

U.S. Senator John Thune (R-S.D.), the chairman of the Senate Committee on Commerce, Science and Transportation, and Senator Ed Markey (D-Mass.), a member of the committee and author of the Telephone Consumer Protection Act (“TCPA”), recently announced the introduction of the Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act.  Senator Roger Wicker (R-Miss.), the chairman of the committee’s Subcommittee on Communications, Technology, Innovation and the Internet is a cosponsor of the bill.

The TRACED Act is introduced in a climate of increased frustration from consumers about robocalls that are not being sufficiently addressed by the TCPA.  Senator Thune explained that “the TRACED Act targets robocall scams and other intentional violations of telemarketing laws so that when authorities do catch violators, they can be held accountable. Existing civil penalty rules were designed to impose penalties on lawful telemarketers who make mistakes. This enforcement regime is totally inadequate for scam artists, and we need do more to separate enforcement of carelessness and other mistakes from more sinister actors.”

Significantly, the bill broadens the authority of the Federal Communications Commission (“FCC”) to levy civil penalties of up to $10,000 per call against those violating telemarketing restrictions. The bill also provides new criminal fines of up to $10,000 per violation, with the opportunity to treble such amount if the activity is intentional.  The bill also extends the window for the FCC to catch and take civil enforcement action against intentional violations to three years after a robocall is placed, instead of only one year. Furthermore, the bill brings together several federal agencies as well as state attorneys general and other non-federal entities to identify and report to Congress on improving deterrence and criminal prosecution of robocall scams. The bill also requires providers of voice services to adopt call authentication technologies to enable telephone carriers to verify that calls are legitimate before they reach consumers phones. Finally, the bill directs the FCC to initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from callers using unauthenticated numbers.  A copy of the TRACED Act is located HERE.

Senator Thune’s statement regarding the TRACED Act is located HERE  and Senator Markey’s statement is HERE .  We will continue to monitor the status of the TRACED Act and report back with updates.

If you have any questions or would like more information, please contact Matt Foree at [email protected].

Ninth Circuit Compounds ATDS Confusion in TCPA, Causing FCC to Seek Further Comment

Posted on: October 8th, 2018

By: Matt Foree

As we previously discussed in the ACA International decision, the U.S. Court of Appeals for the D.C. Circuit recently rejected the Federal Communications Commission’s (“FCC”) guidance concerning the definition of automatic telephone dialing system (ATDS), one of the key components of liability in the Telephone Consumer Protection Act (“TCPA”).  Among other things, the TCPA prohibits using an ATDS to make calls to a cellular telephone without consent.  Since the D.C. Circuit’s ruling, courts have wrestled with the analysis of what qualifies as an ATDS, which has created a patchwork of decisions.  Some courts determined that the FCC’s pre-2015 guidance on the topic is no longer relevant.  Other courts have relied on that previous FCC guidance in their rulings.

On September 20, 2018, the U.S. Court of Appeals for the Ninth Circuit added to the confusion.  In the Marks v. Crunch San DiegoLLC case, the court analyzed a device called the Textmunication system, which is a web-based marketing platform used to send promotional text messages to a list of stored telephone numbers.  In analyzing whether the device was an ATDS, the court determined that the FCC’s pre-2015 guidance on the definition of an ATDS were no longer binding. Therefore, it determined that only the statutory definition of ATDS remains, such that it analyzed the device at issue under the definition in the TCPA. The statute provides that an ATDS is “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.”

The court struggled with the statutory language, finding that it is ambiguous on its face, such that it turned to other aids in interpreting it. Among other things, the court looked at the “context and structure of the statutory scheme.”  In doing so, it determined that, although Congress focused on regulating the use of equipment that dialed blocks of sequential or randomly generated numbers, the statutory language extended to equipment that made automatic calls from lists of recipients.  Therefore, reading the ATDS definition in context and with a view to its “place in the overall statutory scheme,” the Ninth Circuit concluded that the “statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator,’ but also includes devices with the capacity to dial stored numbers automatically.”  Accordingly, the court read the statute to provide that ATDS means “equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers.”

In May of this year, the FCC had previously sought comment on the contours of the ATDS definition in light of the ACA International decision.  Significantly, on October 3, 2018, after the Marks ruling, the FCC requested further comment on interpretation of ATDS in light of the Marks decision. Specifically, the FCC sought further comment on how to interpret and apply the statutory definition of ATDS in light of the Marks decision, as well as how that decision might impact the analysis of the ACA International case.  Comments are due October 17, 2018, with reply comments due on October 24, 2018.

If you have any questions regarding the current status of ATDS analysis, the Marks decision, or the FCC’s request for further comment, please contact Matt Foree at [email protected].


FCC Issues TCPA Declaratory Ruling and Order

Posted on: July 20th, 2015

By: Matt Foree

As reported previously, on June 18, 2015, the Federal Communications Commission (FCC) issued a press release about its new declaratory rulings.  The FCC recently published its 138-page Declaratory Ruling and Order (“Declaratory Ruling”), which was intended to address 21 pending petitions.

The Declaratory Ruling clarifies the FCC’s position on several issues, including the definition of “automatic telephone dialing system” under the Telephone Consumer Protection Act (TCPA), requirements for the prior express consent defense, the treatment of calls made to reassigned telephone numbers, and the use of call-blocking technology.  The FCC asserts that, through the Declaratory Ruling, it has strengthened the core protections of the TCPA, has empowered consumers to stop unwanted calls, and recognizes the legitimate interests of callers.  Although many hoped that the FCC would take the opportunity to apply common sense to the TCPA to curtail excessive litigation, the FCC’s ruling indicates that it may expand TCPA litigation.

Business organizations have already reacted negatively to the Declaratory Ruling.  Immediately after its filing, ACA International, the Association of Credit and Collection Professionals (ACA International), which submitted one of the petitions pending before the FCC, filed a lawsuit in the U.S. Court of Appeals for the D.C. Circuit seeking additional review of the Declaratory Ruling.  As ACA International’s CEO Patrick J. Morris stated, “The FCC’s ruling is at odds with the plain language of the TCPA, the original intent of Congress, and common sense.  Unfortunately, ACA must now turn to the courts in order to challenge the FCC’s attempt to expand its own power and sidestep Congress.”

Since the filing of ACA International’s appeal, two other entities have filed suit to challenge the FCC’s new TCPA interpretations.  The Professional Association for Customer Engagement, Inc. a nonprofit trade organization, filed a petition for review of the ruling with the Seventh Circuit Court of Appeals.  Sirius XM Radio, Inc. also filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit.

The above entities seek judicial review of the FCC’s ruling regarding the treatment of “capacity” related to the definition of an “automatic telephone dialing system” under the TCPA, the FCC’s treatment of predictive dialers, and the FCC’s treatment of prior express consent, including issues related to reassigned telephone numbers.  They also allege that the Declaratory Ruling is arbitrary, capricious, and an abuse of discretion.

It remains to be seen how the lawsuits challenging the ruling will be resolved, but if the Declaratory Ruling is upheld, businesses might be facing even more TCPA lawsuits.

FCC Announces New TCPA Declaratory Rulings

Posted on: June 26th, 2015

By: Matthew N. Foree

Last week, the Federal Communications Commission (FCC) announced in a press release that it issued a package of declaratory rulings regarding the Telephone Consumer Protection Act (TCPA).  The FCC declared that it “adopted a proposal to protect consumers against unwanted robocalls and spam texts.”

The FCC stated that its rulings were informed by thousands of consumer complaints about robocalls that it receives each month, and asserted that it received more than 215,000 such complaints in 2014.  The declaratory rulings address 21 pending petitions and other requests seeking clarity on how it interprets the TCPA.  The FCC stated that its rulings close loop holes and strengthen consumer protections that are already on the books.  It also reiterated that the TCPA requires prior express consent for non-emergency audio dialed, pre-recorded or artificial voice calls to wireless phone numbers as well as for prerecorded telemarketing calls to residential wireline numbers.

In the press release, the FCC highlights certain of its rulings.  Among these is the proposition that reassigned numbers do not create loopholes.  An exception for wrong number or ported calls was the subject of petitions pending before the FCC.  In the press release, the FCC stated that if a phone number has been reassigned, companies must stop calling the number after one call.  It remains to be seen exactly how the rule is written, especially as to how a caller can determine whether the phone number has been reassigned after one call.

Additionally, the press release highlights that the FCC affirmed the TCPA’s definition of autodialer.  The FCC stated that autodialer is defined in the TCPA as “any technology with the capacity to dial random or sub sequential numbers.”  The FCC asserted that this definition insures that robocallers cannot skirt consumer consent requirements through changes and calling technology design or by calling from a list of numbers.

The press release also highlights the availability of “Do Not Disturb Technology.”  Specifically, the FCC reported that service providers can offer robocall-blocking technologies to consumers and implement market-based solutions that consumers can use to stop unwanted robocalls.

The FCC has not yet released the declaratory rulings themselves.  At this juncture, video of the open meeting regarding the rulings is available here. Once the rulings are released, we will provide additional information and analysis.  In the meantime, the press release from the FCC tends to show that it is not providing the clarity that businesses requested and questions remain whether such rules will actually curb the number of TCPA lawsuits.

FCC Commissioner Reiterates Need for FCC to Address TCPA Issues

Posted on: April 9th, 2015

By: Matthew N. Foree

Michael O’Rielly, the Commissioner of the Federal Communications Commission (FCC) addressed the Association of National Advertisers (ANA) last week.  During his remarks, he discussed litigation under the Telephone Consumer Protection Act (TCPA), which he described as “an important issue that is impacting all sectors of the community.”

O’Rielly’s remarks reiterate the statements he published last year on the FCC’s blog regarding the need to provide clarity about the TCPA in the wake of a 30% increase in TCPA lawsuits.  During his address to the ANA, O’Rielly admitted that “FCC decisions and court rulings have broadened the scope of the TCPA, creating uncertainty and litigation risk for legitimate businesses.”  He noted that this has resulted in businesses avoiding making calls to existing customers or clients, “even if the purpose of the call could directly and immediately help the consumer.”

He noted that certain consumer groups have expressed fear that “the FCC will ‘gut the TCPA’ and lead us down a slippery slope of more robocalls.”  O’Rielly played down those fears, stating that “[n]othing could be further from the truth, and I am concerned that catering to this unfounded fear will end up hurting the people they are trying to help.”

O’Reilly’s remarks recognized the need for the TCPA to be more adaptive to technology.  As he recognized during his address, “FCC involvement occurs at the speed of regulation, not innovation.”  Reassuringly, O’Rielly cast aside as unrealistic consumer groups’ arguments that companies can simply manually dial each and every telephone number rather than use electronic means.

In conclusion, he stated, “We can’t paint all legitimate companies with the brush that every call from a private company is a form of harassment.  It is time for the FCC to act to provide clear rules of the road that will benefit everyone, and that means acting on TCPA petitions before us.”

O’Rielly’s remarks give hope that one day the TCPA will enter the 21st century and curtail the rising trend of overly punitive lawsuits.