TCPA Tracker - August 2018

Recent News

TCPA Pain Relief In Store? Thune and Markey Urge FCC to Implement Reassigned Number Database

On June 18, 2018, Senators John Thune (R-SD) and Edward Markey (D-MA) sent a joint letter to FCC Chairman Ajit Pai urging the Commission to continue its work towards establishing a comprehensive database of reassigned numbers, which they noted will be beneficial to both consumers and businesses.  The letter urged the FCC to, among other things, develop a database that ​“comprehensively document[s] all telephone numbers that could be reassigned,” and consider adopting a safe harbor for calls made to reassigned numbers if the following conditions are met: (1) “[t]he caller took all reasonable steps to properly use a reassigned numbers database, in a timely manner, made available under this rulemaking and validate the authenticity of the number prior to making the calls or texts;” (2) “[t]he call or text to a reassigned number was the result of inaccurate information received from the database;” (3) “[t]he caller had the consent of the consumer the caller was attempting to contact;” and (4) “[t]he caller took appropriate steps to stop calling and texting the reassigned number and reported the inaccuracy.”

FCC’s CGB Seeks to Refresh the Record on Call Blocking

On August 10, 2018, the FCC’s Consumer and Governmental Affairs Bureau issued a Public Notice asking for public comment ​“to refresh the record on how the Commission might further empower voice service providers to block illegal calls before they reach American consumers.”  In particular, the Bureau is seeking input numerous questions related to the following:

  1. Methods/criteria that service providers can use to identify illegal calls (e.g., large bursts of calls from a particular caller in a short time window, low average call duration, or low call completion ratios);
  2. How service providers can use these additional call identification criteria to prevent illegal calls from reaching consumers (e.g., labeling, blocking, traceback);
  3. The status of industry traceback efforts, and what the FCC can do to facilitate such efforts; and
  4. How to reduce the potential for false positives and to address situations in which false positives occur.

Initial comments are due to the FCC on September 24, 2018, and replies are due on October 8, 2018.

Small Business Administration Meets with FCC to Discuss TCPA Issues

On August 1, 2018, the Small Business Administration’s Office of Advocacy filed an ex parte letter outlining a meeting between members of their staff and representatives from FCC Chairman Ajit Pai’s office to discuss ​“regulatory reform priorities for small businesses.”  Among the topics discussed during the meeting were TCPA compliance concerns raised by ​“small credit unions, financial service providers, healthcare service providers, and banks.”  In particular, these businesses asked the Office of Advocacy to ​“urge the FCC to issue an interpretation of the term ​‘autodialer’ in light of the recent D.C. Circuit case striking down the FCC’s 2015 interpretation, adopt safe harbors for businesses that utilize a reassigned numbers database, and interpret the term ​‘called party’ as the intended or expected recipient of a call.”  According to SBA’s letter, “[i]n an environment where fifty to seventy percent of a business’s customers might only be reachable by mobile phone, it is important that the FCC move quickly to establish clear guidance to aid small business compliance without depriving customers of required or desired communications.”

PA State Legislator Urges Extension of Government Contractor Exception to State and Local Governments

On July 23, 2018, Joseph B. Scarnati, President Pro Tempore of the Senate of Pennsylvania, wrote a letter to FCC Chairman Ajit Pai urging the FCC to extend the scope of 2016 Broadnet declaratory ruling to include state and local governments.  In that order, the FCC concluded that the federal government is not a ​“person” as defined in section 227(b)(1) of the Communications Act, and therefore the TCPA ​“does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.”  However, the FCC left unanswered the question of whether this exception could also apply to state and local governments and their contractors, which Commissioner O’Rielly pointed out in his dissent to the order.  In his letter, Senator Scarnati stated ​“actions by state and, in particular, local governments directly impact constituents in their daily lives.  It is therefore critical to ensure that state and local government officials can also use effective and efficient methods, such as telephone town halls, to communicate with all citizens about important policy decisions and issues of public concern.”  The FCC has not yet responded to Mr. Scarnati’s request.

FCC Petitions Tracker

Kelley Drye’s Communications group prepares a comprehensive summary of pending petitions and FCC actions relating to the scope and interpretation of the TCPA.

Number of Petitions Pending

  • 27 (+9 seeking a retroactive waiver of the opt-out requirement for fax ads)
  • 1 petition for reconsideration of the rules to implement the government debt collection exemption
  • 1 application for review of the decision to deny a request for an exemption of the prior-express-consent requirement of the TCPA for ​“mortgage servicing calls”
  • 3 requests for reconsideration of the 11/2/16 fax waiver in response to petitions by 22 parties
  • 1 request for reconsideration of the 10/14/16 waiver of the prior express written consent rule granted to 7 petitioners

New Petitions Filed
  • None

Upcoming Comments
  • FCC Staff Report on Robocalling (Replies due 8/20/18)
  • Life Insurance Direct Marketing Association et al. – seeking a ruling that life insurance agents and brokers are permitted to call their customers while the life insurance policies sold by servicing agents are in effect and for a period of 18 months after the policies expire based on an established business relationship between life insurance servicing agents and their customers. (Replies due 8/21/18)
  • Advanced Methods to Target and Eliminate Unlawful Robocalls – comments to refresh the record on additional criteria voice providers could use to identify and block illegal calls (Comments Due 9/24/18; Replies Due 10/8/18)

Decisions Released
  • None
Click here to see the full FCC Petitions Tracker.

Cases of Note

Illinois District Court Finds ACA International Invalidated Earlier FCC Orders on Predictive Dialers; Dismisses Case

In a July 26, 2018 opinion, the Northern District of Illinois found that ACA International​’s (885 F.3d 687 (D.C. Cir. 2018)), ruling invalidating the FCC’s interpretation of predictive dialers applies not only to the 2015 Declaratory Ruling, but also to the agency’s 2008 Declaratory Ruling and its 2003 interpretation of ​“predictive dialer.” The court determined that the FCC’s analysis in its 2015 Ruling, which the D.C. Circuit Court found insufficient, was also the basis for the agency’s 2003 and 2008 interpretations, which, the Northern District of Illinois explained, were ​“inextricably intertwined” with the 2015 Declaratory Ruling. Thus, ACA International also overturns the FCC’s 2003 and 2008 decisions regarding the interpretation of ​“predictive dialer.” See Pinkus v. Sirius XM Radio, No. 16 C 10858 (N.D. Ill. July 26, 2018).

The Illinois court also determined that predictive dialers do not meet the statutory definition of an automatic telephone dialing system (ATDS). In doing so, the court relied upon the plain language of the statute. Specifically, the court found that the TCPA’s definition of an ATDS requires a random or sequential number generator, even if the numbers are stored or dialed from a list. Therefore, charging that a defendant utilizes a system that solely dials numbers from a list, is not enough to state a TCPA claim. Thus, the court dismissed the plaintiff’s complaint.

The Pinkus decision is one of several recent rulings to address whether ACA International invalidated the 2003 and 2008 FCC orders on predictive dialers. In recent weeks, the Third Circuit and District Courts for the Northern District of Ohio, Eastern District of Michigan and New Jersey have split on the issue with no clear consensus on the best approach. We will continue to monitor for new developments.

Michigan District Court Finds Automated Voicemail Service Counts as ATDS for TCPA Purposes

In the first opinion regarding ​“direct drop” technology, in Saunders v. Dyck O’Neal, Inc., the Western District of Michigan found that technology that prerecords voicemails on a consumer’s phone without first calling the consumer still constitutes a ​“call” for TCPA purposes. Likening the effects of the technology to that of a text message, and noting that courts have determined that voicemails fall under the purview of the TCPA, the court determined that voicemails are ​“arguably more of a nuisance to consumers than text messages” and that excluding technology that provides a backdoor into a consumer’s voicemail box from TCPA jurisdiction would be ​“an absurd result.” Thus, the court found that the direct-to-voicemail messages are considered a ​“call” under the TCPA, and denied the defendant’s motion for summary judgment. See Karen Saunders v. Dyck O’Neal, Inc., No. 1:17-cv-335 (W.D. Mich. July 16, 2018).

Ninth Circuit Decision May Provide Insight into How It Will Rule on Predictive Dialer Issues

Although a recent Ninth Circuit decision only considered the validity of the Solicited Fax Rule, the court’s reasoning may suggest how it will rule in the pending Marks v. Crunch San Diego, LLC appeal where the Southern District of California granted the defendant summary judgment because its equipment did not include ​“a random or sequential number generator.” In True Health Chiropractic v. McKesson Corp., No. 17-17123 (9th Cir. July 17, 2018), the Ninth Circuit granted class certification, finding that the defendant’s evidence offered to establish individualized issues of consent was sufficient to establish predominance of a common question.

Regarding the question in Marks, however—which will depend on the Ninth Circuit’s interpretation of ACA International—the court found that the Solicited Fax Rule was invalid. The Rule, promulgated in 2006 and reaffirmed in 2014, was struck down by a D.C. Circuit decision, Bais Yaakov of Spring Valley v. FCC in 2017. Although the plaintiff in this case contended that Bais Yaakov only invalidated the 2014 FCC order, and not the 2006 FCC order because it was not ​“directly” under review, the Ninth Circuit was not convinced, finding that the D.C. Circuit decision invalidated both orders.

This decision is important because the underlying argument made in this case regarding the Solicited Fax Rule is the same argument that courts have been split in deciding after ACA International regarding the validity of the FCC’s 2003, 2008, and 2015 orders defining predictive dialers—namely, that the decision invalidates all of the orders, even those that were not ​“directly” under review in the D.C. Circuit case. Thus, the Ninth Circuit may follow a similar line of reasoning in finding that ACA International invalidated each of the FCC’s predictive dialer orders.