Filter Results CategoriesCart

Telephone Consumer Protection Act (TCPA) litigation involving unwanted calls and texts to cellphones is one of the hottest areas of consumer litigation, involving class and individual claims against debt collectors, telemarketers, banks, and many other businesses. Each unwanted call or text can result in $500 statutory damages ($1500 if the violation was willful or knowing). The TCPA is a strict liability statute, and there is no bona fide error defense.

Much attention has been paid to the recent D.C. Circuit decision in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018), as limiting the rights of TCPA litigants. This article will explain that the decision’s impact is largely supportive of consumer rights, and will also review a number of other significant 2018 TCPA circuit court rulings.

The decision and other recent TCPA rulings are examined in greater detail in the just-updated digital version of NCLC’s Federal Deception Law Chapter 6. Chapter 6 is a detailed analysis of all TCPA issues. This article provides numerous links to further analysis found in that chapter. For subscribers to NCLC’s just released Fair Debt Collection (9th ed. Mar. 2018), a new digital update to that treatise’s § 14.3.2 examines ACA International as it relates to TCPA claims against debt collectors.

The Holding in ACA International

ACA International is an appeal from a 2015 FCC ruling, In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961, at ¶ 15 (F.C.C. July 10, 2015), that in its 138 pages includes interpretations and rulings on a large number of aspects of the TCPA. Such FCC rulings cannot be challenged in the courts except through a petition to a circuit court of appeal under the Hobbs Act within sixty days of the FCC ruling. See NCLC’s Federal Deception Law § 6.2.4.3a. ACA International involves such a challenge, so the FCC’s 2015 ruling is binding on the courts except as limited by the D.C. Circuit’s decision in that case.

ACA International sets aside certain parts of the 2015 FCC ruling, and thus is likely to be raised by defendants in almost all TCPA litigation. In actuality, ACA International does little to change current TCPA precedent and instead makes binding on the courts most aspects of the 2015 FCC ruling. Briefly, ACA International:

  • • Sets aside the FCC’s definition of an autodialer. As explained below, the FCC’s previous rulings on the autodialer definition are still valid and the ACA International decision thus has a limited impact on this definition.
  • • Sets aside the FCC’s treatment of reassigned numbers. As described below, earlier court rulings on reassigned numbers now replace the FCC ruling, and many of these rulings are more pro-consumer than that offered by the FCC.
  • • Upholds the FCC’s rule that consumers can revoke consent, and can do so by any reasonable means. The FCC ruling that is now upheld is described below.
  • • Rejects the argument that an exemption that the FCC created for certain health-care related calls should be broader.

All Other Aspects of the 2015 FCC Ruling Are Now Binding on the Courts

Since all of the appeals from the FCC’s 2015 order were consolidated into ACA International, all aspects of that ruling not set aside by the D.C. Circuit are now binding on the courts under the Hobbs Act. See Federal Deception Law § 6.2.4.3a. For example, the following parts of the 2015 FCC ruling are now binding on the courts:

  • • The caller has the burden of proving that it had consent to call or text the consumer’s cell phone, such as by retaining business records of that consent.
    § 6.11.5
    .
  • • The fact that a consumer’s wireless number is in the contact list of another person’s cell phone does not demonstrate the consumer’s consent to receive calls from a company with which the other person has a relationship. § 6.3.4.2.2.
  • • Provision of a cell phone number to a creditor in connection with a debt is considered consent. But that is consent only to receive calls closely related to the purpose for which the number was first provided. § 6.3.4.2.3.
  • • Consent may be given by a customary user who is included in a business or family calling plan or an intermediary, and consent to a landline call applies when that number is ported to a cell phone. § 6.3.4.2.2.
  • • Text messages, including SMS calls, are calls under the TCPA so that limits on calls to cell phones also apply to texts to cell phones. § 6.7.2.
  • • Callers cannot evade the definition of an autodialer by dividing the autodialing function among multiple pieces of equipment or by dividing ownership of the equipment among multiple entities. § 6.3.2.4.5.
  • • The TCPA’s restrictions on calls to numbers assigned to any service for which the called party is charged for the call include calls to a cell phone that has a limited number of minutes. See
    § 6.3.1
    .
  • • The FCC’s detailed analysis of the factors to determine who has made or initiated a robocall or text for purposes of liability under the Act when there are multiple parties involved is now binding on the courts. See
    § 6.9.2.3
    .
  • • Non-emergency informational calls, including calls by non-profits, can be made to cell phones only with the called party’s consent.
    § 6.3.3.1
    .
  • • The TCPA exemption for emergency calls, such as governmental calls about fires, police activity, or road closings, does not apply to calls from health care providers that advertise a product or deal with billing, accounting, or debt collection. ACA International explicitly affirms this. See § 6.3.3.2.
  • • The FCC’s adoption of a limited exception to the prior express consent requirement for free messages sent by telecommunication providers that ask if the called party wants to set up an account to receive collect calls from a prison inmate was left undisturbed by ACA International, as was a narrowly-drawn exemption for time-sensitive free-to-end user calls and messages sent by financial institutions and health care providers. § 6.3.3.2.

ACA International and the Definition of an Autodialer

The TCPA prohibits calls or texts to a cellphone without the consumer’s consent if the caller uses either:

  • • An artificial or prerecorded voice; or
  • • An autodialer.

ACA International has no impact on the prohibition of prerecorded or artificial voice calls to cellphones without consent. See Federal Deception Law § 6.3.1. However, it sets aside the FCC’s 2015 interpretation of the statutory definition of autodialer (“automatic telephone dialing system”).

The definition of autodialer is of great importance, because if the term is defined narrowly, consumers would be left with no protection against relentless calls and mass texts as long as the caller or sender avoids the use of an artificial or prerecorded voice. Consumers would be deluged with unwanted texts, debt collection calls, surveys, and informational calls to their cell phones, with no way to stop them.

The TCPA defines an autodialer as “equipment which has the capacity to:

  • (A) store or produce telephone numbers to be called, using a random or sequential number generator; and
  • (B) dial such numbers.

The FCC has interpreted this definition on several occasions. In 2003, it held that a device cannot be excluded from the definition of an autodialer because it dials from a given set of numbers rather than from randomly or sequentially generated numbers. In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 F.C.C. Rcd. 14,014, 14,115, at ¶¶ 131–135 (F.C.C. 2003).

That ruling also holds that a predictive dialer is an autodialer, noting that, like older autodialers, its basic function is the capacity to dial numbers without human intervention. A predictive dialer stores pre-programmed numbers or receives numbers from a computer database and then dials those numbers in a manner that maximizes efficiencies for call centers. In 2008, the FCC issued another declaratory ruling that reiterated that a predictive dialer is an autodialer. In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 23 F.C.C. Rcd. 559 (F.C.C. 2008).

The 2015 FCC ruling reiterated the conclusions of the 2003 and 2008 orders and added further interpretations. The 2015 order held that the dispositive question is not whether a particular call was placed through random or sequential generation of telephone numbers, but whether the system has the capacity to generate numbers in this way. The order also made it clear that the TCPA’s use of the word “capacity” includes potential as well as current capacity, so it does not exempt equipment that lacks the “present ability” to dial randomly or sequentially. Thus, hardware that can store or produce telephone numbers to be called using a random or sequential number generator is an autodialer even if software necessary to accomplish that functionality has not yet been installed.

The D.C. Circuit set aside the portion of the 2015 ruling that deals with the definition of autodialer, primarily because of concern that the FCC’s broad interpretation of the term “capacity” could sweep in smartphones that consumers were using for ordinary purposes. The D.C. Circuit in no way ruled on the 2003 and 2008 orders, however, and these orders remain binding on the courts. For detailed support for this conclusion, see § 6.3.2.2. The 2003 and 2008 orders, coupled with the statute itself and pre-existing Circuit decisions, encompass most dialers used by robocallers even without the additional interpretations provided by the FCC’s 2015 order:

  • • A device that dials from a given set of numbers rather than from randomly or sequentially generated numbers.
  • • A predictive dialer.
  • • A predictive dialer even if it cannot be programmed to generate random or sequential phone numbers.
  • • Any device that has the ability to dial numbers without human intervention, including a system that sends text messages en masse.

See § 6.3.2.4.

ACA International and Reassigned Numbers

The TCPA requires that the caller have the consent of the “called party” to make an autodialed or prerecorded call to a cell phone. Many courts have held that consent must be given by the person who presently subscribes to or uses the cell phone. See, e.g., Breslow v. Wells Fargo Bank, 755 F.3d 1265 (11th Cir. 2014); Osorio v. State Farm Bank, 746 F.3d 1242 (11th Cir. 2014); Soppet v. Enhanced Recovery Co., L.L.C., 679 F.3d 637 (7th Cir. 2012). For example, if a debt collector places automated calls to a cell number that has been reassigned to someone other than the debtor, consent given by the debtor is not effective. See generally Federal Deception Law § 6.3.4.3.1.
The 2015 FCC ruling reaffirmed this position, but created a one-call safe harbor, permitting a caller to make one wrong-number call to a party who has not consented to be called after the number is reassigned, so long as the caller does not have actual knowledge of the reassignment. ACA International sets aside the ruling’s position on reassigned numbers in its entirety on the ground that the FCC’s order allowing a one-call safe harbor was arbitrary.
While the FCC ruling is no longer binding on the courts, the fact that, before the FCC order was even issued, two circuits and a number of district courts had ruled that “called party” means the person actually called (not the number’s owner prior to reassignment) is strong and independent precedent that this is the correct TCPA interpretation. Reliance on the 2015 FCC ruling is unnecessary.
Indeed, the ACA International states that the FCC’s interpretation of “called party” to mean the person actually called is a permissible construction of the statute, and it refers approvingly to the Seventh Circuit’s Soppet decision as “persuasive” on this point. ACA International may even strengthen a consumer litigant’s position because callers can no longer rely on the FCC’s safe harbor of one call. See generally § 6.3.4.3.2.

Revocation of Consent

Callers have argued that once a consumer has consented to calls to a cell phone, either the consumer cannot revoke that consent or that the revocation must meet certain requirements set by the caller. The 2015 FCC ruling provides that consumers may revoke consent in any manner that clearly expresses a desire not to receive further messages, and callers may not infringe on that ability by designating an exclusive means to revoke. Revocation may be oral. The D.C. Circuit’s decision in ACA International explicitly upholds the 2015 FCC ruling concerning revocation of consent, and this ruling is now binding on the courts. See Federal Deception Law § 6.3.4.4.1.

Other Notable 2018 Circuit Court TCPA Decisions

The TCPA is an extremely active area of litigation and Federal Deception Law Chapter 6 is updated digitally to capture the latest developments. Two significant circuit court decisions have been issued in 2018 responding to caller arguments that TCPA plaintiffs did not meet Article III standing requirements as interpreted by the Supreme Court in Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S. Ct. 1540, 194 L. Ed. 2d 635 (2016). Both Manuel v. NRA Group, L.L.C., 2018 WL 388622 (3d Cir. Jan. 12, 2018) and Romero v. Dep’t Stores Nat’l Bank, 2018 WL 1079728 (9th Cir. Feb. 28, 2018) hold that unwanted robocalls cause particularized and concrete harm, so that a plaintiff asserting a TCPA claim has Article III standing. Romero is particularly noteworthy because it overturns a troubling and poorly reasoned district court decision that had found no standing. For far more detail on Spokeo and the TCPA, see § 6.10.3.5.

Two other 2018 circuit court rulings have touched on the issue of the consumer’s consent to receive cellphone calls or texts. Fober v. Management and Technology Consultants, L.L.C., 2018 WL 1526365 (9th Cir. Mar. 29, 2018) indicates in dicta that providing a telephone number is consent to be called about the transaction and related matters. Franklin v. Express Text, L.L.C., 2018 WL 1256089 (7th Cir. Mar. 12, 2018) finds that a consumer’s texts to a number known to be affiliated with an automated system, with content other than “STOP,” and including questions, cannot be treated as a proper revocation of consent. For more on consent and revocation of that consent to receive calls and texts to cellphones, see § 6.3.4.

Two other 2018 circuit court cases have looked at whether a seller is liable under the TCPA for the actions of its telemarketer. Kristensen v. Credit Payment Servs., Inc., 879 F.3d 1010 (9th Cir. 2018) agrees with many courts that a seller is liable for a telemarketer’s texts to cell phones if an agency relationship or ratification can be shown, but neither agency nor ratification was shown in that case. Similarly, Hodgin v. UTC Fire & Security Americas Corp., 2018 WL 1308605 (4th Cir. Mar. 14, 2018), finds that no ratification was shown where seller repudiated the telemarketers’ violations and terminated its agreements with them. The fact that the seller’s profit and the telemarketers’ compensation depended on their sales volume does not establish ratification by a seller of illegal telemarketing tactics. For more on a seller’s liability for a telemarketer’s calls, see § 6.9.2.5.

In general, courts have held that a caller’s liability insurance does not cover liability for TCPA claims, so a TCPA litigant cannot reach that source of funds to pay a judgment. See § 6.11.7. ACE Am. Ins. Co. v. Dish Network, L.L.C., 883 F.3d 881 (10th Cir. 2018) is in accord, finding that TCPA statutory damages are not insurable under Colorado law since that state treats them as a penalty.

Author Name: 
Carolyn Carter
About Author: 

Carolyn Carter is the Deputy Director at NCLC (previously serving as Director of Advocacy). She has specialized in consumer law issues for over 30 years. From 1974 to 1986 she worked for the Legal Aid Society of Cleveland, first as a staff attorney and later as law reform director. From 1986 to 1999 she was co-director of a legal services program in Pennsylvania. She was the 1992 recipient of NCLC’s Vern Countryman Award. She is admitted to the Pennsylvania bar. From 2005 to 2007 she was a member of the Federal Reserve Board's Consumer Advisory Council. She is a graduate of Brown University and Yale Law School.

She is co-author of NCLC's Truth in Lending, Unfair and Deceptive Acts and Practices, Collection Actions and Consumer Warranty Law and is a contributor to a number of other NCLC treatises.

Date Created: 
Wednesday, April 18, 2018
Author Image: 
https://library.nclc.org/sites/default/files/carolyn_carter.jpg
Author Image Import: