In 2015, the FTC issued an order that addressed certain aspects of the Telephone Consumer Protection Act. Congress enacted the TCPA in 1991 to address perceived abuses of telephone equipment that allowed entities to autodial consumers' phones.
Three of the issues addressed in ACA will affect all entities that call consumers. Specifically, the FTC's 2015 order held that a device meets the statutory definition of "automatic telephone dialing system," generally known as an ATDS, if it could be configured to autodial. The order also addressed two consent issues, holding that callers were permitted only one "safe harbor" call when a consumer had consented to be autodialed on his or her cellphone but the cellphone number had since been reassigned to a different consumer, and that consumers who consent to be autodialed may later revoke that consent by any reasonable means.
The D.C. Circuit rejected the FTC's definition of ATDS and the one-call safe harbor conclusion.
First, the court held that the FTC's definition of "capacity" was far too expansive. Defining "capacity to autodial" to include any device that can autodial effectively includes every smartphone in America. "It is untenable to construe the term 'capacity' in the statutory definition of an ATDS in a manner that brings within the definition's fold the most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country." The court thus held that the FTC's interpretation of ATDS was "an unreasonably, and impermissibly, expansive one."
Second, the D.C. Circuit rejected as arbitrary and capricious the FTC's decision that a caller was only permitted a single call to a consenting consumer's prior phone number. Callers are permitted to rely on consent if they act in "reasonable reliance" on the recipient's prior express consent. But, the court asked, "why does a caller's reasonable reliance on a previous subscriber's consent necessarily cease to be reasonable once there has been a single, post-reassignment call?" The FTC had no good answer for this question, and the fact is a caller's reliance likely is still reasonable after the first call. Many unanswered calls leave the caller in no different a position than it was before the first call. Largely for this reason, the D.C. Circuit vacated the one-call safe harbor rule from the FTC's 2015 order as well.
But in a loss for the defendants, the D.C. Circuit upheld the FTC's conclusion that "a called party may revoke consent at any time and through any reasonable means," which includes either orally or in writing. This broad standard gives consumers wide latitude in revoking consent, and generally bars businesses from designating a means of revocation (the exception being via contract).
On balance, the FTC's order has positive implications for TCPA defendants defending TCPA class actions at the class-certification stage of these cases. The one-call safe harbor generally could be proved by reference to objective evidence, and thus did not undermine predominance. But a more general "reasonable reliance" standard may require individual inquiries regarding when the caller should have known that the consumer being called was not the consumer who originally provided consent. Similarly, retaining the wide latitude for revoking consent helps class certification arguments where class members originally consented, and revocation will require individualized inquiries to determine whether consent was revoked.
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