TCPA in 2008: a year in review

The courts deciding issues under the Telephone Consumer Protection Act (TCPA) in 2018 did little to provide greater clarity on how callers can effectively avoid liability for telephone calls and text messages to consumers. Until the Federal Communications Commission (FCC) issues another TCPA Order in light some of these court decisions, Congress passes amendments to the law, and/or the U.S. Supreme Court addresses the conflicting decisions of the various appeals courts, compliance with the TCPA will depend on where you do business.
 
What is an “Automated Telephone Dialing System”?
 
Perhaps the area of greatest confusion and risk of liability lies with the issue of how an automated telephone dialing system (ATDS) is defined.
 
The FCC 2015 Order interpreted an ATDS to include equipment that has the potential ability to dial randomly or sequentially, including by the modification of equipment or adding software to provide these capabilities in the future.
 
A number of entities, including ACA International, requested judicial review of the 2015 Order. On March 16, 2018, the D.C. Circuit Court of Appeals in ACA International v. FCC rejected the FCC’s 2015 interpretation of an ATDS. The court ruled it is unreasonable to conclude a smartphone qualifies as an ATDS “because they have the inherent ‘capacity’ to gain ATDS functionality by downloading an app.” The focus, the court ruled, should be on “how much is required to enable the device to function as an autodialer.”
In response to this decision, the FCC sought the following comment on TCPA interpretations:

• What is an “automatic telephone dialing system”?
• What should “capacity” mean in light of the court’s ruling that smartphones are not included?
• How much effort should be required to enable the device to function as an ATDS? Flipping a switch?
• How “automatic” must dialing be for equipment to qualify as an ATDS?
• Does the word “automatic” envision non-manual dialing of telephone numbers?
• Must such a system dial numbers without human intervention?
• Must it dial thousands of numbers in a short period of time? If so, what is a “short period of time”?
• Can it be an ATDS if the equipment cannot itself dial random or sequential numbers?
• Does the prohibition apply if the call doesn’t use the automatic function?
• Does the “called party” refer to “the person the caller expected to reach”? Or does it refer to the party the caller reasonably expected to reach? Or does it refer to “the person actually reached, the wireless number’s present-day subscriber after reassignment”? Or does it refer to a “customary user” (such as a close relative on a subscriber’s family calling plan), rather than the subscriber him/herself”?
• How can a called party may revoke prior express consent to receive robocalls?
• What opt-out methods would be sufficiently clearly defined and easy to use such that “any effort to sidestep the available methods in favor of idiosyncratic or imaginative revocation requests might well be seen as unreasonable”?

Comment had ended on June 28, 2018, but the FCC reopened its comment call after the Ninth Circuit Court of Appeals expanded its interpretation of an ATDS in its Marks v. Crunch San Diego, LLC decision dated September 20, 2018. In this case, gym operator Crunch was alleged to have violated the TCPA by sending promotional text messages using an ATDS without consent.

The Ninth Circuit ruled the TCPA’s language was “ambiguous on its face” regarding whether the phrase “using a random or sequential number generator” modifies both “store” and “produce.” The court interpreted the TCPA to mean an ATDS is “not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator’ but also includes devices with the capacity to stored numbers and to dial store numbers automatically.” 

Note: The Ninth Circuit covers Arizona, California, Idaho, Nevada, Montana, Oregon and Washington.

As a result of the Marks decision, the FCC requested comment on the following questions:

• To the extent the statutory definition is ambiguous, how should the FCC exercise its discretion to interpret such ambiguities here?
• Does the interpretation of the Marks court mean that any device with the capacity to dial stored numbers automatically is an automatic telephone dialing system?
• What devices have the capacity to store numbers?
• Do smartphones have such capacity?
• What devices that can store numbers also have the capacity to automatically dial such numbers?
• Do smartphones have such capacity?
• In short, how should the FCC address these two court holdings?
• We also seek comment on any other issues addressed in the Marks decision that the FCC should consider in interpreting the definition of an “automatic telephone dialing system.”

 
This comment period ended on October 24, 2018.

On October 30th, the Ninth Circuit denied the defendant’s Petition for Rehearing En Banc. Crunch has 90 days to submit a Petition for Writ of Certiorari with the Supreme Court. Given the different appellate court rulings on the ATDS definition, it is highly likely this issue will go before the U.S. Supreme Court regardless of how the FCC rules.

For example, on June 26, 2018, the Third Circuit Court of Appeals in Dominguez v. Yahoo ruled in light of the D.C. Circuit’s ACA International decision, a plaintiff must prove a phone system has the present capacity (and not the potential capacity) to generate random and sequential telephone numbers and dial those numbers.

In Dominguez, the consumer received approximately 27,800 text messages in 17 months from Yahoo on his used smartphone alerting him to Yahoo emails he was receiving. Because the prior owner of the phone had enrolled the number in Yahoo’s text messaging notification system, Yahoo responded to his request to stop the messages that the service could only be stopped if the former owner of the phone disabled it himself. The court ruled Yahoo’s Email SMS Service did not have the present capacity to function as an ATDS. 

Note: The Third Circuit Court of Appeals covers Delaware, New Jersey, Pennsylvania and the Virgin Islands.  

On June 29, 2018, the Second Circuit Court of Appeals in King v. Time Warner Cable sided with the ACA International decision that the term “capacity” means a device’s present functions, and remanded the case back to the District Court to determine whether TWC’s systems had the ability to perform the functions of an ATDS when it made the calls to King. King, the plaintiff and a customer of Time Warner Cable (TWC), agreed to receiving telephone calls, including automated messages. King sued TWC after receiving over 150 automated voice message collection calls for another customer who had owned her cell phone number, even after requesting the calls cease.

Note: The Second Circuit Court of Appeals covers Connecticut, New York and Vermont.  

Who is the “Called Party”?
 
The ACA International Court affirmed the 2012 Seventh Circuit Court of Appeals decision in Soppet v. Enhanced Recovery Company, LLC that the “’called party’ means the person subscribing to the called number at the time the call is made.”
 
While neither King nor Dominguez were the intended parties called or texted, neither case addressed the meaning of the “called party” as an issue.
 
Revocation of Consent
 
In 2018, the courts treated the issue of consent revocation differently as well.
 
After receiving a number of calls with prior express consent, the plaintiff in McMillion v. Rash Curtis & Associates told the defendant: “I told you guys to stop called [sic] me, but you guys keep calling me…I asked you nicely to stop calling and that I didn’t have anything that you needed at the moment but if I do come across it I’ll definitely give you guys a call. But you guys are not supposed to be calling me.” The U.S. District Court for the Northern District of California on February 2, 2018 denied the defendant’s argument that revocation of consent must “clearly express his or her desire not to receive further calls,” and held in that service of a legal complaint operates as revocation as a matter of law.
 
However, the U.S. District Court for the Northern District of Ohio ruled on April 30, 2018 in Barton v. Credit One Financial that the plaintiff could not orally revoke consent when the contract specifically required a revocation in writing. The court held the plaintiff could not “unilaterally alter the terms of the agreement to claim that his oral revocation of consent was valid.”
 
The FCC’s 2015 Order provides a different standard. The order provides revocation must be reasonable, which is determined by the totality of the circumstances. Callers cannot may not designate a method of opting out in ways that make it difficult or impossible to revoke consent.
 
The D.C. District Court in ACA International held callers “have every incentive to avoid TCPA liability by making clearly-defined and easy-to-use opt-out methods.”
 
On March 28, 2018, the U.S. District Court for the District of New Jersey ruled in Rando v. Edible Arrangements that the Plaintiff’s efforts were not reasonable. Edible Arrangements instructed consumers to reply “STOP” to cease future text messages. The Plaintiff instead texted: (1) “Take my contact info off please”; (2) “I want to confirm that I have been removed off your contacts”; (3) “I asked to be removed from this service a few times. Stop the messages ; and (4) “Again I want to stop this service thank you.”   
 
On October 26, 2018, the Ninth Circuit ruled in Epps v. Earth Fare, Inc. that the plaintiff’s attempt to stop text messages from the defendant with texts such as “I would appreciate if we discontinue any further texts” and “Thank you but I would like the texts messages to stop can we make that happen” were not reasonable because it was communicated to just text “Stop.”

Congressional Action

Both the U.S. House of Representatives and the U.S. Senate have drafted legislation amending the TCPA. The “Stopping Bad Robocalls Act” (H.R. 6026 and S. 3078), would add a new definition of “robocall” in place of an ATDS. The new term would include devices that making calls using “numbers stored on a list” (in addition to dialing random or sequential numbers). The new definition clarifies robocalls do not include using equipment where “substantial additional human intervention” is required to place the call.
 
The bills would also require the FCC to establish a nationwide database of reassigned telephone numbers. Voice providers would have to ensure information is accurate and prevent calls from connecting where caller ID verification cannot be made. The bills would also extend the statute of limitations for FCC enforcement of TCPA violations from 1 year to 4 years.
 
It remains to be seen whether either bill will pass out of committee to a full vote.
 
Veronica Madsen
PLEASE NOTE: The information and opinions provided on this blog are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney that is licensed in your jurisdiction. No article may be republished without the express written permission of ESTEE Compliance, LLC. © 2018