Robert W. Quinn is a Partner with Wilkinson Barker Knauer LLP in Washington, DC and serves as the WLF Legal Pulse‘s Featured Expert Contributor on Communications Regulation.
This U.S. Supreme Court Term could prove to be very consequential for Congress, telemarketing firms and consumers alike as it relates to the Telephone Consumer Protection Act (TCPA). The Court currently has before it two cases (one in which certiorari has been granted while the other is still pending) that could go a long way toward forcing Congress to update the nearly 29-year old statute. The first case, Amer. Ass’n of Political Consultants, Inc. et al. v. FCC, 923 F.3d 159 (4th Cir. 2019) cert. granted sub nom., Barr v. American Association of Political Consultants, et al., 205 L. Ed 449, 2020 U.S. LEXIS 2, 2020 WL 113070 (U.S. Jan. 10, 2020) (No. 19-631) (“Barr”) will determine whether Congress’ addition, in 2015, of a TCPA exemption for federal government debt-collection communications, renders the entire statute unconstitutional. Even if the TCPA survives the constitutional challenge in Barr, the second case, Duguid v. Facebook, 926 F. 3d 1146 (9th Cir. 2019) petition for cert. filed sub nom, Facebook, Inc. v. Duguid, (U.S. Oct. 17, 2019) (No. 19-511) could result in Congress having to update the technology provisions of the TCPA should it desire the law to capture and restrict modern telemarketing equipment and processes.
For the uninitiated, the TCPA places several different types of restrictions on the ability to contact consumers, including through the use of automated telephone equipment. While consumer groups at first generally regarded the law as a success (particularly with the advent of the FTC’s Do Not Call Registry), the advance in telemarketing technology combined with the sheer increase in in the number of fraudulent telemarketing calls—particularly robocalls—has led regulators to expand the reach of the law to its very breaking point. The result has been consumer frustration (because the scam robocalls keep coming), business frustration (because legitimate business calls increasingly get captured in the regulatory web and class-action lawsuits) and political frustration (because nothing seems to fix the problem). Given those issues, and national presidential and congressional elections, TCPA activity will be cresting in 2020.
The TCPA’s main provisions as implemented by the FTC and the FCC are straightforward: the law prohibits companies from making unsolicited contact with consumers on telephone numbers the consumers have enrolled on the FTC’s Do Not Call Registry (with certain specified exceptions).1 It also places significant additional restrictions on the use of automated telephone dialing systems to call consumers on cellular phones or the use of prerecorded or artificial voice technology in calls to both residential or cellular telephone number (once again with specified exceptions). Because the TCPA provides for statutory damages of up to $500 per violation (with the possibility of treble damages for violations deemed intentional or willful), it has been a hotbed for litigation. Congress left the primary restrictions in the TCPA untouched from its 1991 enactment until 2015, when it amended the TCPA to exempt telephone calls made using automated and prerecorded technologies where “the call is made solely to collect a debt owed to or guaranteed by the United States.”2
At issue in Barr is the effect of that 2015 statutory revision on the TCPA’s constitutionality. In the underlying litigation, plaintiffs (several political organizations) argued that the newly created exemption for federal government debt collection, as implemented by the FCC, was a facially unconstitutional content-based restriction of speech in violation of the First Amendment. The district court agreed that the government debt-collection amendment was indeed a content-based restriction. However, after applying a strict scrutiny analysis, the court concluded that the FCC-implemented restrictions were narrowly tailored to further a compelling governmental interest and, thus, a permissible content-based regulation. On appeal, the Fourth Circuit agreed with the lower court that the government debt-collection amendment was a content-based restriction, but disagreed with its conclusion that the amendment was narrowly tailored to serve a compelling governmental interest. To rectify this constitutional infirmity, the Fourth Circuit chose to excise the offending amendment rather than invalidate the entirety of the TCPA, noting that the statute had been “fully operative” for twenty-four years before the offending amendment was enacted.
Interestingly, there is no split in the circuit courts on this issue because the Ninth Circuit reached the same conclusion in the Duguid case we will discuss below.3 The United States government, however, has a different view. Therefore, in Barr, the government is challenging the conclusion that the government debt-collection exemption constitutes a content-based restriction in the first instance (and is defending the severability of that provision should the Court disagree). According the government, the exemption is akin to the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, which impose requirements on communications on debt collection and the creation and use of credit reports. Rather than being viewed as content-based restrictions on speech, those statutes have long been interpreted to hinge on the economic nature of the relationship between the parties.
But even if the United States prevails and the TCPA is left largely intact, the Duguid case, should the Court grant certiorari, could force Congress to rethink the automated technology provisions of the TCPA, which changes in technology and business practices have rendered nearly obsolete. As described above, § 227(b)(1) of the TCPA prohibits, without prior express consent, the use an automatic telephone dialing system (“ATDS”) for calls made to cellular telephones, among other restrictions. The statute defines an ATDS to be “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.”4 However, over the years, the industry has moved beyond technology that utilizes “random or sequential number generators.” In the era of big data and profile creation, telemarketers and other callers don’t want to address a “random” market—they want to contact consumers whom they have reason to believe have an interest in purchasing their products.
The FCC foresaw that technology change in 2003, and sought to sweep “predictive dialers,” i.e., equipment that can be programmed to store and automatically dial telephone numbers, into the ATDS definition, irrespective of whether the equipment actually generated the numbers itself, let alone whether the numbers dialed were at random or sequential.5 The FCC also sought to expand the TCPA definition by sweeping in any equipment which had the capacity “to store or produce telephone numbers” and then dial such numbers at random or in sequential order6—again regardless of whether the equipment was being used in that manner. In 2008 and again in 2015, the FCC reaffirmed and expanded those findings, rejecting again that to be an ATDS, the equipment must be presently able to generate at random or sequential telephone numbers.7 Two things are evident from this history. First, the TCPA definition of a specific ATDS technology is now outdated in the marketplace today. Telemarketers and other businesses have largely abandoned random or sequential dialers in favor of technology that allows more targeted consumer contact. Second, in its efforts to forestall that technical obsolescence, the FCC crafted a definition so broad as to encompass virtually any modern telephone.
Something must give; if that FCC viewpoint is correct, every person who asks Siri or Alexa to call their mother is potentially violating the TCPA (unless of course your mother has provided you prior consent or you fall into one of the other narrow exceptions). In Duguid, the triggering events for the alleged TCPA violations were security alert text messages purportedly intended for a customer who had not updated his/her telephone number (and consequently went to a person who had no relationship to Facebook or the security issue being flagged).
In 2018, the D.C. Circuit weighed in, rejecting the FCC’s definition along with its line of decisions expanding the ATDS definition through the years. ACA Int’l. v. FCC, 885 F.3d 687, 702-703 (D.C. Cir. 2018). The Third and Eleventh Circuits have subsequently followed the ACA D.C. Circuit lead, while the Ninth Circuit has taken a different approach. Dominguez ex rel. Himself v. Yahoo, Inc., 894 F.3d 116, 121 (3d Cir. 2018); Glasser v. Hilton Grand Vacations Co., LLC, _ F.3d _, 2020 WL 415811 (11th Cir. 2020); but see Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1049 (9th Cir. 2018). Given the circuit court split on the issue and its the implications, odds may be good that the Court will grant certiorari soon. And if it does, the TCPA could be headed for big changes even if it survives the constitutionality challenge in Barr.
- See 47 C.F.R. § 64.1200 (c)(2).
- Pub. L. No. 114-74, Tit. III, § 301, 129 Stat. 588 (2015); 47 U.S.C. § 227 (b)(1)(A)(3).
- Charter Communications has also filed a Petition for Certiorari on this same issue from an unpublished Ninth Circuit opinion in Gallion v. United States, 772 Fed. App’x, 604 (9th Cir. 2019) petition for cert. filed sub nom, Charter Communications, Inc. v Gallion, (U.S. Nov. 1, 2019) (No. 19-575).
- 47 U.S.C. § 227 (a)(1) defines “automatic telephone dialing system” as means “…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.
- In re Rules & Regulations Implementing the Tel. Consumer Protection Act of 1991, 18 FCC Rcd. 14014, 14092 ¶ 132 (2003) (FCC 2003 TCPA Order).
- In re Rules & Regulations Implementing the Tel. Consumer Protection Act of 1991, 23 FCC Rcd. 559, 566 ¶ 12 (2008) (FCC 2008 TCPA Order); In re Rules & Regulations Implementing the Tel. Consumer Protection Act of 1991, 30 FCC Rcd. 7961, 7974 ¶ 15 (2105) (FCC 2015 TCPA Order).