United States: D.C. Circuit Rolls Back The FCC's Expansive Order Targeting Telephone Marketing

On March 16, 2018, the D.C. Circuit handed down a unanimous decision rejecting two core components of a 2015 Declaratory Ruling and Order (the "FCC Order") issued by the Federal Communications Commission (the "FCC") that would have significantly expanded the reach of the Telephone Consumer Protection Act (the "TCPA"). See ACA Int'l v. FCC, No. 15-1211. Most notably, the D.C. Circuit rejected what it considered the FCC's "unreasonably expansive" interpretation of the TCPA that would have had "eye-popping sweep": expanding the definition of "autodialer" to include not only telephones with the present capacity to automatically call phone numbers using a random or sequential number generator, but also devices that could be modified to do so. That interpretation, the court reasoned, would reach nearly all telephone equipment, even conventional smartphones, making "nearly every American [a] TCPA-violator-in-waiting, if not a violator-in-fact."

As the D.C. Circuit recognized, the draconian remedies available under the TCPA underscored the importance of not extending the TCPA's prohibitions beyond their intended reach. In addition to facing potential regulatory penalties, entities that violate the TCPA can be liable to private plaintiffs for $500 per call or text, which can be trebled to $1500 per call or text for willful or knowing violations, and with no cap on the amount of cumulative damages. 47 U.S.C. § 227(b)(3).

The D.C. Circuit also struck down the FCC's ruling that caller intent is irrelevant for purposes of imposing liability in the case of calls to reassigned phone numbers, reaching a holding that will help protect telephone marketers from unintentional violations of the statute.

The court did side with the FCC on two remaining issues, agreeing with the FCC that called parties may revoke consent to robocalls by any reasonable means and confirming that the FCC may exempt certain time-sensitive healthcare-related calls, but not others, from the TCPA's prior express consent requirements.

While the D.C. Circuit's decision is expected to significantly reduce potential liability under the TCPA, it does not eliminate the risk. Indeed, in the wake of the ACA International decision, the FCC has confirmed that telephone solicitations remain its top consumer protection enforcement priority. With the D.C. Circuit's decision leaving untouched the TCPA's private right of action and statutory damages provisions, moreover, businesses should not expect that the plaintiffs' bar, which began litigating TCPA cases long before the FCC's controversial Order and filed more than 4,000 such complaints in 2017, will quit filing TCPA cases any time soon. TCPA compliance should, therefore, remain a priority.

Potential Capacity Not Sufficient for Autodialer Liability

The highlight of the D.C. Circuit's decision is its reversal of the FCC's expansive autodialer interpretation, which would have expanded the scope of the TCPA's prohibition on certain calls made with autodialers to include calls made with ordinary smartphones. Specifically, the TCPA prohibits use of an "automatic telephone dialing system," or autodialer, to call or message wireless numbers without prior express consent. 47 U.S.C. § 227(b)(1)(A). An autodialer, in turn, is defined by statute as equipment with the "capacity" "to store or produce telephone numbers to be called, using a random or sequential number generator; and . . . to dial such numbers." § 227(a)(1).

In the Order, the FCC determined that the "capacity" of dialing equipment "includes its potential functionalities" or "future possibility," not just its "present" or "current" ability. According to the FCC, therefore, "a piece of equipment can possess the requisite 'capacity' to satisfy the statutory definition of 'autodialer' even if, for example, it requires the addition of software to actually perform the functions described in the definition." In arguing before the D.C. Circuit, the FCC did not dispute that this interpretation would sweep in the average smartphone. Indeed, in providing guidance on its Order, the only type of dialing equipment that the FCC confirmed would not be in scope was a rotary telephone.

The D.C. Circuit rejected the FCC's expansive interpretation. At the end of 2016, nearly 80% of American adults owned smartphones, a number expected to increase. If every smartphone qualifies as an autodialer, and if an uninvited call or message from a smartphone violates the statute even if autodialer features were not used to make the call or send the message, then "the statute's restrictions on autodialer calls assume an eye-popping sweep." The court's rejection of the FCC's interpretation, then, precludes a regulatory regime where "every uninvited communication from a smartphone infringes federal law."

Intent Relevant to Calls Made to Reassigned Phone Numbers

The D.C. Circuit also rejected the FCC's approach to permitting a limited one-call safe harbor for calls to reassigned numbers and, as a result, additionally invalidated the FCC's interpretation of "called party." Under the TCPA, "prior express consent of the called party" precludes liability against the caller for calls made with an autodialer. 47 U.S.C. § 227(b)(1)(A). The issue of whether the "called party" consented, however, becomes complicated where the person who gave the consent is no longer the person who received the call, particularly where the phone number was reassigned. Liability for calls to reassigned numbers poses a considerable concern since, as the FCC has observed, approximately 35 million numbers are disconnected and made available for reassignment to new consumers each year.

Although the D.C. Circuit determined that the FCC's statutory interpretation of "called party" to mean a phone number's present-day subscriber and customary users was a reasonable one, the court nevertheless set aside that interpretation on the basis of the FCC's flawed single-call safe harbor. According to the court, such a safe harbor amounted to arbitrary rulemaking since callers may learn of reassigned numbers prior to the first call and even a single call may fail to provide adequate notice of reassignment.

For immediate practical purposes, the court's decision undoes the FCC's "called party" interpretation and invites businesses to argue, in a fashion that the Order had rejected, that mistaken, good faith calls to parties with reassigned numbers could fall within the consent exception.

Looking ahead further, the precise interpretation of "called party" may lose significance. As the D.C. Circuit observed, the FCC is considering the creation of a "comprehensive repository of information about reassigned wireless numbers," which could eliminate much of the confusion surrounding reassigned numbers. Shortly after the appellate decision, on March 22, 2018 the FCC adopted its latest proposal, soliciting comments regarding the implementation of one or more databases to provide callers with comprehensive and timely potential number reassignment information. The FCC has made clear that it will not mandate that callers use such databases in order to comply with the TCPA. Instead, the FCC's proposal would incentivize use by adopting a safe harbor for callers that consult the reassigned number databases.

While the FCC's proposal for the reassigned number database undergoes consideration, businesses are encouraged to employ tools and best practices to facilitate detection of number reassignment before making good faith calls. For instance, the FCC has recommended that callers include an interactive opt-out mechanism for recipients to report a reassigned or wrong number and implement procedures for customer service representatives placing outbound calls to record wrong number reports and for allowing customer service agents to record new phone numbers when receiving calls from customers.

Called Parties May Revoke Consent at Any Time and Through Any Reasonable Means

In other aspects, the D.C. Circuit agreed with the FCC, keeping in place some of the FCC's pro-consumer rules. The D.C. Circuit, like the agency, emphasized that called parties may revoke consent through "any reasonable means clearly expressing a desire to receive no further messages from the caller." Callers, therefore, may not limit the manner or designate the exclusive means by which revocation may occur. Consequently, the D.C. Circuit observed that "callers will have every incentive to avoid TCPA liability by making available clearly-defined and easy-to-use opt-out methods," which regulated entities are encouraged to implement.

Moreover, regulated entities may consider contracting with called parties on particular revocation procedures. Whereas the FCC did not address parties' contractual rights regarding revocation, the D.C. Circuit clarified that parties retain the ability to agree to mutually adopted rules.

Certain Time-Sensitive Financial and Healthcare Messages Are Exempt from Liability

Finally, the D.C. Circuit confirmed that the Health Insurance Portability and Accountability Act ("HIPAA") does not supersede the FCC's authority to craft exemptions from the TCPA's consumer consent requirements for some, but not all, healthcare-related calls. Consequently, absent consumer consent, callers such as pharmacies and healthcare providers may still face TCPA liability for billing and accounting calls to wireless numbers, whose timely delivery is not critical to a called party's healthcare. As the ACA International decision counsels, regulated entities should seek to comply with both the TCPA and HIPAA rules and regulations governing the disclosure of protected health information.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions