A D.C. Circuit Court has ruled that the Federal Communications Commission (FCC) under President Barack Obama overreached in part when it issued its 2015 order providing guidance and interpreting the Telephone Consumer Protection Act (TCPA) in an attempt to rein-in robocalls and unwanted text messages. This long-awaited ruling in—ACA International, et al., v. Federal Communications Commission—provides some relief to marketers, while still retaining a consumer's broad right to opt-out.

The court looked at four challenges to the FCC's rules: (1) how broadly to interpret an "automated telephone dialing system"; (2) whether it is a TCPA violation to call a number that previously gave consent if the wireless number has been reassigned (without the caller's knowledge); (3) how a consenting party may revoke consent; and (4) whether the FCC's exemption for consent for certain health care related calls is too narrow. The court ruled in favor of the challengers for (1) and (2), and upheld the FCC's order for (3) and (4).

1. Definition of Autodialer was Too Broad

When the regulation was established in 2015, the FCC deemed an autodialer to be "any device that has the present or future capacity to function as an autodialer." The court ruled that the definition of autodialer was too broad. In fact, the definition was so all encompassing that it included smartphones and had the potential to entangle everyday consumers in litigation. At a rate of $500 per instance, consumers could have been on the hook for thousands of dollars for sending something like an evite via SMS or MMS to a group of friends. The court held that this is an unreasonably expansive interpretation of the TCPA.

2. Reassigned Mobile Phone Numbers

The court also reversed the FCC's standard for reassigned phone numbers. Consumers consistently change their phone numbers, which means that a company can inadvertently call a consumer who they haven't received permission to call. To address the issue, in 2015, the FCC established a one-call safe harbor for calling an individual cell phone number. However, the court found the one-call aspect of the safe harbor to be arbitrary and capricious, at least as set out in the order. The court set aside the FCC's treatment of re-assigned numbers as a whole, as it was not clear the FCC would have embraced a strict-liability standard given its admission that companies have some reasonable reliance on the prior consent received.

3.  Revocation of Consent

The FCC's order provided that a consumer may revoke consent at any time using "any reasonable means"—orally or in writing—"that clearly expresses a desire not to receive further messages." The court denied challenges to this provision, and left it intact, although it stressed that the revocation means must be "reasonable" under the circumstances, which includes the ease and methods provided by a company to enable consumers to opt-out.

4. Health Care Related Messages

The court also left untouched the exception the FCC made in the order for health care companies, allowing them to send artificial/prerecorded voice messages to land lines without prior written consent for time sensitive "health care messages" as defined by the Health Insurance Portability and Accountability Act.

Key Takeaways: The court's ruling narrows the very broad definition of an "autodialer" subject to the TCPA and will offer some protection to legitimate marketers interacting with their customers through more traditional calling methods (that do not actually use auto-dialers). The setting aside of "reassigned numbers" will have at least short-term relief, although the FCC likely will take this issue up again, and could adopt a strict-liability standard. In addition, the ongoing ability for consumers to use "reasonable" opt-out methods will likely continue to be litigated. TCPA compliance remains important and high-risk, with a private right of action and statutory damages. Accordingly, all text message campaigns should be carefully vetted for full compliance.

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