FCC’s TCPA Ruling Appealed

By: Matt Foree

As reported previously, the Federal Communications Commission (FCC) issued its Declaratory Ruling and Order (Order) regarding the Telephone Consumer Protection Act (TCPA) on July 10, 2015.  That ruling was immediately appealed by several business organizations including ACA International and Sirius XM Radio, Inc. (XM Radio), which filed appeals in the U.S. Court of Appeals for the District of Columbia Circuit. The Professional Association for Customer Engagement, Inc. (PACE) filed a similar petition in the 7th Circuit Court of Appeals.  On July 24, 2015, the three petitions for review were consolidated into the Court of Appeals for the District of Columbia Circuit.

ACA International, XM Radio and PACE (Petitioners) have each filed their Statement of Issues per the court’s rules. In their Statements of Issues, the Petitioners set forth the issues that form the basis of their appeals. For example, the Petitioners criticize the FCC’s definition of “automatic telephone dialing system” (ATDS) in the Order. ACA International asserts that Congress enacted a precise definition of ATDS that excludes telephones that do not fall within the definition of ATDS, but the FCC disregards the definition to expand the type of equipment that the TCPA covers. Therefore, it argues, the Order extends the FCC’s jurisdiction to regulate telephones that are not within the definition of ATDS. Furthermore, ACA International criticizes the Order’s treatment of “capacity” in determining whether a device is an ATDS such that it does not comport with a caller’s constitutional right of due process.

The Petitioners also criticize the Order’s definition of “called party” in the context of the “prior express consent” defense. As noted by XM Radio and PACE, the FCC concluded that the term “called party” means “‘the subscriber or customary user’ of the number in question, not the intended recipient of the call, even though callers often have no way of knowing that a number has been reassigned from one person to another.” As ACA International asserts, this definition “misinterprets the statutory text and will result in liability for innocent and unknowing conduct.” XM Radio and PACE then note that the FCC, “[r]ecognizing the unfairness of that outcome,” interpreted the TCPA’s prior express consent provision to give callers “one liability-free call to a number that has been reassigned.” They also note that, even if the one call does not provide the caller with information about the status of the number, “callers remain liable for any subsequent call made without the prior consent of the subscriber or customary user.” ACA International asserts that the FCC’s conclusion that “we deem the caller to have constructive knowledge” of a reassigned number after one call is arbitrary, capricious, and an abuse of discretion.

Significantly, ACA International notes that the Order disregards Congress’s findings in the TCPA. It states that, when Congress enacted the statute, “it found that ‘[i]ndividuals’ privacy rights, public safety interests, and commercial freedoms of speech and trade must be balanced in a way that protects the privacy of individuals and permits legitimate telemarketing practices.” ACA International contends that the Order rejects that balance and disregards “commercial freedoms of speech and trade” to create a “regulatory web so tangled that it snares legitimate, compliant, law-abiding actors along with the abusive and intrusive callers at whose conduct the law is aimed.”

The Petitioners’ Statements of the Issues underscore the problems that were compounded by the Order, the lack of common sense that remains in interpreting the TCPA, and the potential for increased litigation unless the Order is modified.


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