The Telephone Consumer Protection Act (TCPA) continues to be hotly litigated by class action plaintiffs’ attorneys, with filed cases increasing significantly over the last year. Last month, the Supreme Court ruled in McLaughlin Chiropractic Associates v. McKesson Corp. that federal district courts have the power to ignore the Federal Communications Commission’s (FCC) interpretations of the TCPA and to independently decide what the TCPA requires. The decision (which should not come as much of a surprise after the Loper Bright holding) concluded that the federal Hobbs Act does not demand that district courts absolutely defer to the FCC’s interpretations of the TCPA in enforcement proceedings, stating:
In an enforcement proceeding, a district court must independently determine for itself whether the agency’s interpretation of a statute is correct. District courts are not bound by the agency’s interpretation, but instead must determine the meaning of the law under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation.
Thus, courts are now free to conduct independent statutory analysis of the TCPA while giving only “appropriate respect” and not binding deference to the FCC’s TCPA interpretations. The decision can cut two ways: on one hand advertisers subject to the TCPA can no longer rely on favorable FCC interpretations, but on the other hand they can challenge unfavorable FCC interpretations.. Though the case involved fax advertisements (which have become less prevalent in recent years), it will impact text message and telemarketing lawsuits.
This could also impact lawsuits challenging the TCPA’s “revocation rules” and calling hour (so-called quiet hours) restrictions. Plaintiffs are increasingly filing lawsuits under the FCC’s implementing regulations of the TCPA, which prohibit making telephone solicitations to residential telephone subscribers before 8 a.m. or after 9 p.m. local time. The McLaughlin ruling could provide new defenses, including that courts should not defer to the FCC’s regulations (which are not found in the text of the TCPA itself) and whether the calling hour restrictions apply to cell phones at all.
In another case, a New York federal court dismissed a TCPA class action against online prescription glasses retailer Eyebuydirect, which alleged that the defendant continued to send marketing text messages after the plaintiff replied “STOP” to opt out of further marketing messages. In the case, the plaintiff alleged the defendant continued sending marketing messages four, seven, and nine days after the opt-out request.
The TCPA requires businesses to honor “reasonable” opt-out requests from autodialed or marketing text messages. The FCC also recently issued the Revocation Rule, clarifying that consumers can revoke consent through any reasonable means and that businesses must honor such requests within a reasonable time. The rule requires businesses to implement internal procedures that allow it to honor opt-outs in a reasonable time frame. While some courts have allowed allegations of continued contact to support an inference that a company lacked required internal procedures, the court held that a short delay alone does not suffice—particularly where the plaintiff did not request the company’s internal policies to support their claims.
Interestingly (and potentially conflicting with other courts finding that even shorter delays are not reasonable), the court found that the nine-day delay was not unreasonable, given that the regulation requires opt-out requests to be honored within a “reasonable” time frame, not immediately.
The Supreme Court’s McLaughlin decision adds new uncertainties for marketers, as courts are no longer bound by the FCC’s interpretation of what is a “reasonable” time frame to action a “STOP” request. As “Do Not Call” lawsuits are on the rise, this could be a good development for marketers—that is, depending on how courts define a “reasonable” time frame.
More recently, a district court in Oregon independently analyzed whether cell phones qualify as residential lines under the TCPA’s “Do Not Call” provisions. In Wilson v. Hard Eight, the courtwas empowered by McLaughlin to interpret the statute without deference to the FCC, but nevertheless reached the same conclusion as the FCC and denied a motion to dismiss. Given this new landscape, another court, interpreting the same statutory language, could reach the opposite result—adding to a patchwork of TCPA interpretations.
