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By Lesli C. Esposito and John D. Huh
In a vote of three to two, with voting falling along political party lines, the Federal Communications Commission approved an order addressing 21 pending petitions seeking clarifications of various aspects of the Telephone Consumer Protection Act (TCPA or Do-Not-Call law).
Most notably, the petitions sought clarification of liability for dialing reassigned numbers when a previous assignee of the number had given consent to be called, the definition of “autodialer,” the ability of consumers to revoke consent to robocalls, and exemptions for certain types of non-emergency calls.
After extensive bi-partisan comment, the FCC approved the order that:
All five commissioners supported the idea of service providers offering robocall blocking technology to consumers, but disagreed on the remaining provisions of the order, primarily along party lines.
The FCC’s Order addresses 21 outstanding requests for clarifications or rulings regarding the TCPA. The proposed Order was introduced by Alison Kutler, the new Acting Chief of the Consumer and Governmental Affairs Bureau (CGB), and was presented by Kristi Lemione, the Attorney-Advisor for the Consumer Policy Division of the of the CGB. The Order provides a safe harbor for businesses to call a reassigned cell phone number one time if they received prior consent from the previous “owner” of the number. The Order broadens the definition of an autodialer from a device that has the “capacity” to dial random or sequential phone numbers to “any technology with the potential to dial random or sequential numbers.” In addition, the Order confirms a consumer’s ability to revoke consent to be called, establishes that text messages are treated as phone calls under the Act, allows providers to offer to consumers technology that blocks robocalls, and establishes certain limited exceptions for the requirement of consent.
Following a general summary of the proposed Order, the Commissioners commented on the specific provisions, often being pointedly critical of the flaws in the Order and with the TCPA in general. Notably, while Commissioner Mignon Clyburn voted in favor of the Order, she expressed her “sympathy” for legitimate businesses that are required to comply with the TCPA and expressed concern over businesses’ ability to identify cell phone numbers that have been reassigned. She encouraged service providers to voluntarily create a comprehensive database for reassigned numbers. Given that every day over 100,000 cell phone numbers are reassigned, this is a legitimate and significant concern. Under the Order that was approved by the FCC today, if a company receives consent to call a phone number and unbeknownst to the company the phone number has been reassigned, they can call that phone number once but any future calls to the number are in violation of the TCPA. Most importantly, there is no obligation on the current user of the phone number to notify the company that the number has been reassigned. In practical terms, a person could let a company call her new phone number tens of times, if not hundreds, without ever informing the company that the number has been re-assigned, only to then file a lawsuit against the company for statutory damages of $500 to $1,500 per call.
Commissioner Jessica Rosenworcel did not share Commissioner Clayburn’s concerns and instead stressed her “detest” for robocalls and their interference with dinner time. In fact, Commissioner Rosenworcel stated that she dissented to the portion of the order that established very limited exceptions for specific urgent circumstances such as calls or texts that alert consumers to possible fraud on their bank accounts or remind them of important medication refills.
In sharp contrast, Commissioners Ajit Pai and Michael O’Riley made statements that were extremely critical of the Order and highlighted the deficiencies in the provisions. While Commissioner Pai agreed that the TCPA provisions apply to text messages, call blocking technology should be available, and consumers do have the right to revoke consent, he focused much of his statement on the litigation abuse the TCPA has spawned, explaining that the law had “strayed” from its original purpose to become the “poster child” for lawsuit abuse by the Plaintiffs’ class action bar. His comments were warranted as the number of class action lawsuits related to the TCPA jumped 560 percent from 2010 to 2014. Commissioner Pai explained that the FCC could “fix” the TCPA but instead is choosing to make it worse through the Order. He explained that the broadening of the definition of an autodialer makes virtually every device an autodialer, including a smart phone, except an old-fashioned rotary phone. Establishing strict liability for calling reassigned numbers after one phone call “opens the flood gates” for further lawsuit abuse, because it imposes no requirement on consumers to inform businesses that the number they are dialing has been reassigned and they do not consent to be called.
Reiterating Commissioner Pai’s concerns and criticisms, Commissioner O’Riley stated that the Order was “the most slanted document” he had ever seen. He explained that in his opinion, the document does not protect consumers but instead penalizes legitimate businesses. Commssioner O’Riley explained that the FCC missed the opportunity to correct the overly broad definition of an autodialer, and instead impermissibly expanded the definition to include any device that has the possibility of, at some point in the future, being modified to store or produce telephone numbers to be called, using a random or sequential number generator. Commissioner O’Riley made the analogy that it was the equivalent of saying the FAA regulates cars because at some point in the future, with significant modification, a car could be made to fly. Going further than Commissioner Pai, he stated that he did not even believe that the TCPA should apply to text messages, as when the TCPA was drafted and enacted text messages did not exist.
Following the passionate and significantly different views on the proposed Order, Chairman Tom Wheeler stated that he believed his proposed Order did exactly what Congress had asked of the FCC – to implement the TCPA. Chairman Wheeler appeared to acknowledge the issues of lawsuit abuse by the Plaintiffs’ class action bar, but stated that such issues should be taken up with Congress and not the FCC. The Chairman called for a vote and despite the concerns of several commissioners, the Order passed.
In light of this significant development and the increased potential for enforcement actions and litigation, particularly class actions, involving claims for violations of the TCPA’s restrictions on using an ATDS, companies should promptly revise their compliance policies and procedures in order to address the FCC’s new interpretations.
Find out more about the impact of the new order by contacting Lesli Esposito, John Huh or Jennifer Kashatus.
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