The DC Circuit Court of Appeals finally rendered a decision on the legality of the Telephone Consumer Protection Act (TCPA), and good things are on the way for the marketing research and analytics industry.
A DC Circuit Court decision rejected much of the FCC's 2015 TCPA regulations and accepted a lot of the Insights Association's arguments in the case, in which we were intervenors.
Back in 2015, the Insights Association joined with a number of non-research associations and companies to intervene in a lawsuit against the Federal Communications Commission's then-new TCPA rules (ACA International v. FCC). The three judge panel of Sri Srinivasan, Cornelia T.L. Pillard and Harry T. Edwards held oral arguments on October 19, 2016, leaving us hanging... until today.
The court appeared to support the FCC's broad rules on revocation of consent for autodialer calls to cell phones, as well as the limited exemption for time-sensitive health care calls. However, the decision also remanded the definition of an "automatic telephone dialing system" back to the FCC to rewrite it, along with the agency's one-call-before-liabiility standard for autodialer calls to reassigned numbers. As the court explained:
"The Commission’s understanding would appear to subject ordinary calls from any conventional smartphone to the Act’s coverage, an unreasonably expansive interpretation of the statute. We also vacate the agency’s approach to calls made to a phone number previously assigned to a person who had given consent but since reassigned to another (nonconsenting) person. The Commission concluded that calls in that situation violate the TCPA, apart from a one-call safe harbor, regardless of whether the caller has any awareness of the reassignment. We determine that the agency’s one-call safe harbor, at least as defended in the order, is arbitrary and capricious."
TCPA requires express prior consent to call someone via their cell phone using an autodialer, which the FCC’s 2015 rules interpret to mean potentially anything short of a rotary dial phone. Dialing “accidents” are not an effective legal defense and penalties run from $500 to $1,500 per violating call. Costly class action lawsuits against violators, including against organizations conducting marketing research, are painfully common.
Today's court decision triggers a long-awaited (and likely slow) domino effect in Washington, DC. Next, the FCC gets to issue new TCPA rules, which may take 4-8 months, and we have reason to hope that the new rules will swing our way, and we will be working the FCC to try to help. Indeed, FCC Chairman Ajit Pai declared, in response to today's court decision:
"Today’s unanimous D.C. Circuit decision addresses yet another example of the prior FCC’s disregard for the law and regulatory overreach. As the court explains, the agency’s 2015 ruling placed every American consumer with a smartphone at substantial risk of violating federal law. That’s why I dissented from the FCC’s misguided decision and am pleased that the D.C. Circuit too has rejected it. Instead of sweeping into a regulatory dragnet the hundreds of millions of American consumers who place calls or send text messages from smartphones, the FCC should be targeting bad actors who bombard Americans with unlawful robocalls."
Meanwhile, we will continue working with our coalition to seek a legislative fix to the TCPA statute, to at least ensure that a less-friendly FCC chairman in the future cannot ruin telephone research the way the 2015 rules nearly did.
The Insights Association will share with our members much more extensive details and analysis of the court decision, and our efforts in response, as soon as possible. In the meantime, please continue to contact Howard Fienberg for questions relating to TCPA advocacy.
UPDATE: A full analysis of the decision.