On May 27, 2015, Federal Communications Commission (FCC) Chairman Tom Wheeler announced in a posting on the official FCC blog that he has circulated a proposal to his fellow commissioners that will address numerous issues under the Telephone Consumer Protection Act (TCPA).1 An FCC fact sheet released alongside Chairman Wheeler's blog post notes that the proposal is comprised of several declaratory rulings that will address nearly two dozen petitions that have asked the FCC to clear up significant ambiguities in the FCC's previous TCPA orders and rulings, including the proper definition of an "automatic telephone dialing system" or "autodialer," and whether the TCPA is violated by autodialed or prerecorded calls to numbers for which consent had been given, but that have subsequently been reassigned to new users without the calling party's knowledge.2 The FCC will vote on Chairman Wheeler's proposal at the Open Commission Meeting scheduled for June 18, 2015.
Although the specific contents of Chairman Wheeler's proposal will not be made public before it is voted upon, both Chairman Wheeler's blog post and the FCC fact sheet summarize the proposed rulings as follows:
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Clarify the definition of "autodialer." Wheeler states that the proposal would clarify that an "automatic telephone dialing system" (or "autodialer") includes "any technology with the capacity to dial random or sequential numbers."3 He further states that this proposed ruling is intended "to ensure robocallers cannot skirt consumer consent requirements through changes in calling technology design or by calling from a list of numbers." 4
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Permit only a single call to a reassigned or "recycled" number. Referring to a need to "close a... potential loophole" in the TCPA,5 Wheeler states that "[i]f a phone number has been reassigned, callers must stop calling the number after one call. (Applies to wireless and landline home service.)"6
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Enable consumers to revoke their consent to receive calls "in any way reasonable at any time." This part of the proposal would clarify that consumers may revoke consent they have previously given to receive calls; that they may revoke their consent at any time; and that such revocation need not be made in writing or any other prescribed form, but instead can be made "in any reasonable way."
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Authorize carriers to offer "do not disturb" technology. Under the proposal, both wireless and landline carriers would be permitted to offer consumers technological means of blocking incoming robocalls.
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Create an exception to liability for narrowly defined "urgent" calls. The proposal would permit callers to place free calls or texts to consumers "for urgent circumstances," such as bank fraud alerts or prescription refill reminders (but not, for example, marketing and debt collection calls). However, the proposal would also require callers to honor consumer opt-outs from these urgent calls.
The FCC's proposed action comes in the midst of an onslaught of TCPA litigation in recent years, with over 2,000 lawsuits filed in 2014 alone.7 Many of these cases turn on one or both of two critical issues: (1) whether the defendant used an "automatic telephone dialing system" as defined by the TCPA; and (2) whether the defendant can be held liable for placing a call or text to a so-called "recycled" number—a phone number for which the caller previously obtained "prior express consent" to call, but which was subsequently reassigned to another person, usually without the caller's knowledge. Below, we briefly provide context for these two issues and examine how the FCC's proposal might address them.
Automatic Telephone Dialing System (ATDS)
The TCPA defines an ATDS as equipment that 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."8 However, based on stray comments from the FCC in a 2003 ruling on other issues,9 TCPA plaintiffs have argued that the FCC expanded the statutory ATDS definition to cover any equipment that stores lists of telephone numbers and can dial or send text messages to them "without human intervention." In light of a handful of courts adopting plaintiffs' expansive interpretation, a number of entities petitioned the FCC asking it to clarify that equipment does not qualify as an ATDS unless it has the present capacity to generate and dial random or sequential numbers.10
Neither Chairman Wheeler's blog post nor the FCC's fact sheet make clear whether the portion of the circulated proposal addressing the ATDS issue will confront this critical issue. These resources note only that the proposal clarifies that an ATDS is "any technology with the capacity to dial random or sequential numbers."11 At first blush, this appears to be aimed at clarifying that equipment need not have actually used its random or sequential number generation capacity to place a given call in order to qualify as an ATDS, but instead need only have had that capacity at the time the call was made. However, it is unclear as to how the proposal will define "capacity" and whether it will clarify that a present capacity is required, not a theoretical future capacity.
Recycled Numbers
The TCPA exempts from liability calls "made with the prior express consent of the called party."12 The TCPA does not define the term "called party," and courts have divided over how to interpret it. While the Seventh and Eleventh Circuits have held that "called party" refers to "the person subscribing to the called number at the time the call is made,"13 several other courts have held that "called party" refers to the "intended recipient" of the call.14 The proper interpretation of "called party" is critical when it comes to the issue of so-called "recycled numbers." When consumers change phone numbers, they often fail to notify every company to which they have previously given their number. A given phone number is seldom abandoned, but instead is generally reassigned to a new user. By one estimate, more than 100,000 cell phone numbers are "recycled" in this way each day.15 There is no comprehensive resource or set of resources that keeps track of such reassignments and can provide that information in real-time or with complete accuracy. Consequently, even the most responsible companies are hard-pressed to avoid placing calls or sending texts to phone numbers for which they previously obtained consent to call, but that have since been reassigned without their knowledge.
Facing lawsuits from owners of recycled numbers who received text messages they did not sign up for, several entities petitioned the FCC asking it to clarify that calls to recycled numbers without the caller's knowledge are not subject to liability under the TCPA, and that "called party" for purposes of the TCPA's "prior express consent" provision means the "intended recipient" of the call.16 More than 80 commenters weighed in, with a large majority of them advocating in support of the petitions. Chairman Wheeler's proposal does not appear to adopt these petitioners' requests. Instead, the summary of his proposal states only that "callers must stop calling the number after one call."17 It is unclear from this whether the declaratory ruling will address how companies are supposed to learn that a given number has been recycled, including whether consumers with reassigned numbers will be required to take some action to put the calling party on notice of the reassignment.
Although the precise contents of Chairman Wheeler's proposal are not public and are still subject to approval by the full commission, these developments have important implications for any business that places or facilitates phone calls or text messages to consumers.
1 See Tom Wheeler, FCC Chairman, "Another Win for Consumers," Official FCC Blog, May 27, 2015, https://www.fcc.gov/blog/another-win-consumers (hereinafter Wheeler Blog Post).
2 See "Fact Sheet on Consumer Protection Proposal" at 1, FCC, May 27, 2015, https://www.fcc.gov/document/fact-sheet-consumer-protection-proposal (hereinafter FCC Fact Sheet).
3 Id. (emphasis original).
4 Id.
5 Wheeler Blog Post.
6 FCC Fact Sheet at 1.
7 LeadiD, "Cover Your Act: How to Prevent TCPA Litigation," available at http://www.leadid.com/infographics/cover-your-act.
8 47 U.S.C. § 227(a)(1).
9 See In re Rules and Regulations Implementing the TCPA of 1991, 18 FCC Rcd. 14,014, 14,090-93 (2003).
10 See, e.g. TextMe, Inc.'s Petition for Expedited Declaratory Ruling and Clarification, CG Dkt. No. 02-278 (Mar. 18, 2014); ACA International's Petition for Rulemaking, CG Dkt. No. 02-278 (Jan. 21, 2014); Glide Talk, Ltd.'s Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (Oct. 28, 2013); Professional Association for Consumer Engagement's Petition for Expedited Declaratory Ruling and/or Expedited Rulemaking, CG Dkt. No. 02-278 (Oct. 18, 2013); YouMail Inc.'s Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (Apr. 19, 2013); Communication Innovators' Petition for Declaratory Ruling, CG Dkt. No. 02-278 (June 7, 2012).
11 FCC Fact Sheet at 1 (empahsis original).
12 47 U.S.C. § 227(b)(1).
13 Soppet, 679 F.3d at 643; Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014).
14 Leyse v. Bank of Am., No. 11-cv-7128, 2014 U.S. Dist. LEXIS 125527, at *17 (D.N.J. Sept. 8, 2014); Cellco P'ship v. Dealers Warranty, LLC, No. 09-cv-1814, 2010 U.S. Dist. LEXIS 106719, at *34 (D.N.J. Oct. 5, 2010); Leyse v. Bank of Am., No. 09-cv-7654, 2010 U.S. Dist. LEXIS 58461, at *9-11 (S.D.N.Y. June 14, 2010).
15 See Alyssa Abkowitz, "Wrong Number? Blame Companies' Recycling," The Wall Street Journal, December 1, 2011 (estimating that almost 37 million phone numbers are reassigned each year).
16 United Healthcare Services, Inc.'s Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (filed Jan. 16, 2014); Stage Stores, Inc. Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (filed June 4, 2014); Rubio's Restaurant, Inc. Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (filed Aug. 11, 2014); Consumer Bankers Association Petition for Declaratory Ruling, CG Dkt. No. 02-278 (filed Sept. 19, 2014); Blackboard Inc. Petition for Expedited Declaratory Ruling, CG Dkt. No. 02-278 (Feb. 24, 2015).
17 FCC Fact Sheet at 1.
