On December 18, the U.S. Court of Appeals for the Eleventh Circuit held oral arguments in Insurance Marketing Coalition Limited (IMC) v. Federal Communication Commission (FCC), which challenges the FCC’s December 2023 order under the Telephone Consumer Protection Act (TCPA). The stated aim of the order is to reduce unwanted robocalls and texts by closing the “lead generator loophole,” and require “one-to-one consent” for telemarketing communications. The new rule is set to take effect next month. However, during oral arguments, the Eleventh Circuit judges expressed skepticism about the FCC’s justification for its new rule.

Highlights from the Argument

Statutory Authority and Interpretation

IMC’s primary argument is that the FCC exceeded its statutory authority by requiring one-to-one consent. Counsel for IMC argued that the phrase “prior express consent” has been interpreted according to its ordinary common law meaning, which does not necessitate individual consent for each caller. Counsel emphasized that the FCC’s new rule conflicts with this established interpretation.

In response, the judges focused on whether the FCC’s rule conflicts with the TCPA’s language. Judge Robert J. Luck noted that the argument about the rule conflicting with the TCPA’s “prior express consent” language was stronger than other points raised. He questioned the necessity of the FCC’s interpretation, particularly the meaning of “express” in this context. IMC responded by stating that “express” means “clearly and unmistakably communicated,” as supported by Black’s Law Dictionary.

First Amendment and APA Concerns

IMC also raised First Amendment issues and argued that the FCC violated the Administrative Procedure Act (APA) by not providing a reasoned explanation for rejecting IMC’s proposed changes during the rulemaking process. IMC contended that the agency’s rejection of its proposal was arbitrary and capricious, lacking any reasoning, as highlighted by Commissioner Symington’s dissent.

Counsel for the FCC defended the rule as necessary to prevent abuse and ensure meaningful consent. He argued that the regulation addresses the problem of consumers inadvertently consenting to unwanted calls through single-click consent mechanisms. He further emphasized that enforcement alone was insufficient to address the issue, necessitating the new rule.

Implementation v Restriction

The judges questioned whether the FCC’s rule was an implementation or a restriction of the statutory right to consent. Judge Luck posed a hypothetical scenario where a consumer wants to receive as many marketing calls as possible, questioning why the FCC would limit that option. The FCC responded that the new rule, which requires individual checkboxes for each company, is a small burden to protect consumers from unwanted calls.

Judge Elizabeth L. Branch highlighted that the FCC’s rule effectively restricts consumers’ ability to consent to multiple entities, suggesting that the FCC might need additional authority from Congress to impose such restrictions. She noted that the rule imposes categorical restrictions, moving beyond mere implementation.

While recognizing the FCC’s policy concerns, Judge Luck emphasized the fine line between implementing and restricting statutory rights. He acknowledged the FCC’s authority to regulate but questioned whether the new rule overstepped that authority. Judge Luck stated, “how is implementing that right limiting that right? … I think that may be the problem.”

Conclusion

The Eleventh Circuit’s decision will hinge on whether the FCC’s one-to-one consent rule is deemed a permissible implementation of the TCPA or an unlawful restriction of consumers’ rights. The outcome could significantly impact how businesses obtain consent and how consumers’ rights are enforced under the TCPA.