A growing avalanche of lawsuits under the Telephone Consumer Protection Act spurred industry groups and businesses, particularly financial services companies, to file more than 20 petitions with the Federal Communications Commission seeking clarifications and interpretations of the TCPA’s requirements.  An announcement by FCC Chairman Tom Wheeler indicates that the Commissioners will be acting on the petitions as early as the FCC’s Open Meeting on June 18, but that the results may not be helpful to companies who make outbound dialer calls for telemarketing, debt collection, and other business purposes.  While the full scope of the potential bad news needs to await release of the details of the proposal and the Commission’s vote, there may also be some good with the bad.

More specifically, on May 27, the FCC announced that Commissioner Wheeler was circulating to the other FCC Commissioners a proposal to resolve pending TCPA petitions.  The FCC will vote on the proposal at its upcoming Open Meeting and, if approved, the proposal would take effect immediately.  While the details of the proposal have not yet been made public, a “fact sheet” issued May 27 has some clearly bad news, a proposal of some concern where the not-yet-disclosed details will make a big difference, and a few isolated items of potentially good news.

First, here’s some bad news:

  • One endemic problem for companies are TCPA claims based on an undocumented assertion by a consumer that the consumer had revoked consent to receive calls made with dialers.  Businesses petitioned the FCC to validate the right of businesses to establish mandatory methods for consumers to submit no-call requests.  According to Commissioner Wheeler’s proposal, however, a consumer would have the right to revoke consent “in any reasonable way at any time.”  The announcement suggests that businesses will not be able to control the method of revocation by specifying a particular method for revocation.  The unreleased specific language of Commissioner Wheeler’s proposal, however, could offer some limited help to businesses who are bedeviled by unsubstantiated assertions of revoked consent if the Commission at least imposes a “reasonableness” limitation on how consumers can revoke.
  • Another problem for companies is the very broad definition of the main telephone technology regulated by the TCPA – the “automated telephone dialing system” or “ATDS.”  One widespread reading of prior FCC pronouncements is that the TCPA regulates any phone call using a system that has the “capacity” to make dialer calls, even if the specific call was dialed manually by a human and the dialer function was not actually used.  Commissioner Wheeler’s proposal apparently is to make it absolutely clear that any call made with a system with “capacity” is in fact regulated by the TCPA.  This proposal is to “ensure robocallers cannot skirt consumer consent requirements through changes in calling technology design.”
  • Yet another percolating issue is whether the TCPA regulates ATDS calls if the calls are made from a list of numbers (such as a company’s records of numbers of its customers), as opposed to randomly called numbers.  Commissioner Wheeler’s proposal would be to make clear that calling from a list would be regulated by the TCPA.
  • Also counting as bad news is the color of the announcement of Commissioner Wheeler’s proposal, which appears stridently anti-“robocall.”  According to the fact sheet, “[u]nwanted calls and texts are the number one consumer complaint to the FCC.”  “The Chairman is proposing a set of actions that, if adopted, will close loopholes and strengthen consumer protections already on the books – one of the most significant FCC consumer protection actions since it established the Do-Not-Call Registry with the FTC in 2003.”  The focus appears to be strengthening consumer rights, not solving industry problems under the TCPA.

Second, the announcement raises additional concerns, the resolution of which will turn on the yet undisclosed details of the proposal:

  • Another endemic problem for companies is the high frequency at which cell phone numbers are reassigned from one consumer to another.  A company may have permission to call a consumer at a given cell phone number, but the number is then reassigned to another customer, and the business unwittingly calls the stranger.  Businesses petitioned for protection from lawsuits for innocent wrong-party calls.  Commissioner Wheeler’s proposal appears to create a safe harbor for one call.  Presumably, the proposal assumes that the calling party would have an opportunity to learn of the reassignment in that one single call.  The released details do not indicate, however, whether the one allowed call is a connected call where the calling party would actually reach a human, and hence could learn of the reassignment, or whether the one call safe harbor would be used up even if the call did not connect.  Given the very high frequency of non-connections, a safe harbor allowing one call, connected or not, would be of limited use to businesses.

Finally, the announcement contains some isolated good news:

  • Commissioner Wheeler’s proposal indicates that he favors allowing businesses to make ATDS calls to consumers without prior consent (but subject to opt-out requirements) under “urgent circumstances,” including fraud alerts to bank customers and prescription refill reminder calls.  Commissioner Wheeler’s proposal will be “very clear about what such messages can be and what they cannot be (i.e., no marketing or debt collection).”  How far this proposal will go depends on the details, but good news is coming on this front.

As a general matter, the FCC’s interpretation of the TCPA is binding on courts applying the TCPA in private lawsuits, including class actions.  Many courts have stayed litigation awaiting the FCC’s rulings on the pending petitions.  The release of the details of Commissioner Wheeler’s proposal, and the action of the FCC Commissioners on June 18, may prove to be a watershed moment for outbound ATDS calling by businesses.  Commission Wheeler’s proposal warrants the closest attention.