Fall is for Falling Leaves, Thanksgiving, and TCPA Omnibus II?

As this year speeds to a close, we are on pins and needles to see if the FCC will issue a ruling this Fall in the great ACA Int’l TCPA remand.  After all, the FCC provided only two weeks for comment in its latest Public Notice Seeking Further Comment, issued after the Ninth Circuit’s anachronistic ruling in Marks v. Crunch San Diego, LLC this September. You can read Dorsey’s coverage on the Marks decision here.

The latest Public Notice comes after a slew of activity earlier this year, including the FCC’s Further Notice of Proposed Rulemaking released March 23, 2018, which we reported on here, and an Industry Petition led by the U.S. Chamber of Commerce filed on May 5, 2018.   While we don’t know for certain when the FCC is going to take action, sometime in November seems plausible, and, if so, we’d predict a drop-and-run just before we all dive into our Thanksgiving dinners.

With an Omnibus II from the FCC looming on the horizon, we think now is a good time to take stock of the primary issues up for consideration by the FCC:

  • ATDS: One of the most consequential issues for Omnibus II is the definition of automatic telephone dialing system (“ATDS”), which has been in flux for years and was catapulted to further prominence with ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018). This issue alone stands to impact the breadth of the TCPA.  Today’s dialing technology is far different than it was in 1991 when the TCPA was enacted.  The crux of the debate is over the definition of ATDS, including whether that term should be limited to the text of the statute.  The TCPA defines an ATDS as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”  47 U.S.C. § 227(a)(1).  The FCC has sought comment on numerous aspects of the ATDS inquiry, from construction of the ATDS definition, to the interpretation of “capacity,” and to an explanation of what functions an ATDS must be able to perform.  Beyond the definition itself, what level of human intervention would disqualify a dialing system as an ATDS is also at play.

The comments received by the FCC on the ATDS issue reflect the predictably diverging interests of industry and the plaintiff’s bar.  In both comments and by petition, the financial services industry has almost categorically taken the position that only equipment that meets the statutory definition of ATDS should be subject to the TCPA, and that the definition should not include predictive dialers, calls made with human intervention, or calling from a list.  On the capacity and functionality fronts, the industry comments generally suggest that the equipment used should possess the present ability to function as an ATDS, and that the functions actually have to be used when the call is placed.

On the other side, consumers, consumer interest groups, and the plaintiff’s bar submitted comments taking the position that ATDS should be interpreted broadly to encompass any device that dials numbers from a stored list, regardless of whether it stores or produces those numbers using a random or sequential number generator.  Predictive dialers and manual clicker applications would be covered by the definitions proposed by this group of commenters.  (As would smart phones, which only one consumer-side comment specifically suggested be carved out.)

While the comment period relating to Marks does not close for a few more days, we expect to see similar alignment from those commenters.

  • Reassigned Numbers: The treatment of reassigned numbers and a potential reassigned number database have been the subject of multiple FCC requests for comment, in addition to the FCC’s original request for comment on interpretation of the TCPA in light of ACA Int’l.

A reassigned number database was strongly favored amongst financial services industry commenters, but there were mixed opinions as to whether the database should be federally-run, vendor-run, or limited to existing commercially available options.  Affordable or free access to the database was a concern, especially amongst credit unions.  Nearly all commenters remarking on the database were in favor of a safe harbor for its use.  Some commenters suggested that the safe harbor be triggered by queries of the database at set intervals (e.g., yearly).

The majority of consumer-side commenters were silent on the issue of a reassigned numbers database, although those that did comment were in support.  The National Consumer Law Center, and a number of other consumer-side groups joining in the comment, went so far as to support the establishment of a narrow safe harbor in conjunction with the creation of such a database.

  • Called Party: As a companion issue to the reassigned numbers assessment, the FCC is also looking at the interpretation of the term “called party.” The definition of “called party” is important because it describes the person from whom “prior express consent” must be obtained to make calls using an ATDS or artificial or prerecorded voice.  The 2015 FCC TCPA Order interpreted “called party” as the “current subscriber or customary user.”  However, ACA Int’l vacated the 2015 “called party” treatment, sending the question back to the FCC for further review.

Every commenter from the financial services industry to address the issue of “called party” sought an intended recipient approach, while consumer-side commenters favored defining the “called party” as either the person reached or the “current subscriber or customary user.”

  • Revocation of Consent: ACA Int’l confirmed that “a party may revoke her consent through any reasonable means clearly expressing a desire to receive no further messages from the caller.” 885 F.3d at 692 (emphasis added). This approach takes into account the totality of the circumstances, though revocation cannot be accomplished “creatively.”  Upon remand by the D.C. Circuit, the FCC sought comment on “what opt-out methods would be clearly defined and sufficiently easy to use?” Consumer and Gov’t Affairs Bureau Seeks Comment on Interpretation of the Telephone Consumer Protection Act in light of the D.C. Circuit’s ACA Int’l Decision, CG Docket Nos. 18-152, 02-278, at 4 (released May 14, 2018).

The issue of revocation presented the largest divergence among financial services industry commenters.  While nearly all commenters sought clarification as to the meaning of “any reasonable means,” there was disagreement as to the requirements and/or guidance that the FCC should impose.  Many commenters sought more regulation in the form of identification of specific acceptable opt-out methods and imposition of timeframes for updating records, with proposed ranges from 3 to 30 days.  Some commenters suggested the permissible opt-out methods should be modeled after other federal laws, such as the Real Estate Settlement Procedure Act (RESPA) or the Fair Debt Collection Practices Act (FDCPA).  Further, a number of commenters sought affirmation that opt-out methods established by other federal or state laws are “by definition” sufficiently clearly defined and easy to use. There were also requests for confirmation by the FCC that mutually-agreeable opt-out methods could be set by contract.  Last, one comment requested the FCC prohibit a consumer from revoking TCPA consent during phone calls that are required by regulation and where the phone number is the only number listed in conjunction with an account.

  • Other Lingering Issues: A number of other issues are also up for consideration in Omnibus II. These include the issue of whether contractors acting on behalf of federal, state, and local governments are “persons” under the TCPA (stemming from the Broadnet Declaratory Ruling, CG Docket No. 02-278, Declaratory Ruling, 31 FCC Rcd 7394 (2016), and related petitions for reconsideration); whether the TCPA applies to federal contractors collecting a federal debt, Bipartisan Budget Act of 2015, Pub. L. No. 114-74, 129 Stat. 584, § 301(a)(1)(A) (amending 47 U.S.C. § 227(b)(1)(A)-(B)); and potentially also the treatment of text messages under the TCPA (see Petition for Clarification of The P2P Alliance and Public Notice Seeking Comment); and vicarious liability, which was raised in The Insights Association Petition for Declaratory Ruling, and accompanying Public Notice Seeking Comment, and also addressed in at least one consumer-side comment.

Omnibus II is poised to change the TCPA landscape as we know it, and hopefully for the better, so that we can all have a little something extra to be thankful for this holiday season.

Alexandra Krasovec

Alexandra Krasovec

Alex is a member of one of the nation’s most prominent and knowledgeable Telephone Consumer Protection Act (TCPA) defense teams. She has defended financial institutions and businesses of varying sizes against individual TCPA claims and nationwide class actions. Always staying on the forefront of TCPA developments, Alex works with this team of litigators to craft arguments and strategies aimed at curtailing the reach of the TCPA, both in court and through policy efforts before the Federal Communications Commission.

Divya Gupta

Divya Gupta

Divya Gupta is a commercial litigator Partner with one of the nation’s most knowledgeable Telephone Consumer Protection Act (TCPA) defense-teams. She is experienced in handling complex cases in state and federal courts, both in-house and as outside counsel. Divya is particularly skilled in defending banks, finance companies, and other lenders in both individual and class action TCPA cases. Divya also has experience advising major financial institutions on TCPA compliance matter and regarding the applicability of the TCPA to new and emerging products and services. Likewise, she is further adept in handling matters involving the Fair Credit Reporting Act (FCRA).

Scott Goldsmith

Scott Goldsmith

Scott brings the tenacity of a former prosecutor to his representation of clients in high-stakes commercial litigation and class action defense. Having tried over twenty cases through final jury verdict, and over one hundred fifty evidentiary hearings, Scott understands that effective advocacy requires creativity, composure, and thorough preparation.

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