ACA International & Chamber of Commerce v. FCC

Case Updates

The D.C. Circuit granted petitions for review filed by the Chamber and several others and vacated the FCC’s 2015 declaratory ruling and order on the scope of liability under the Telephone Consumer Protection Act (“TCPA”). The D.C. Circuit’s unanimous opinion ruled that the FCC exceeded its statutory authority in defining the term “automated telephonic dialing system” and also acted arbitrarily and capriciously in setting up a one-call-only safe harbor for companies. These are both significant victories, and there is reason to hope for further improvements to the TCPA landscape. The FCC’s 2015 order made an already bad situation on TCPA litigation worse. The D.C. Circuit’s decision, once it takes effect, will restore the status quo ante as of June 2015. The FCC, under the leadership of Chairman Pai, is now well-positioned to take new action that will help to further reign in meritless TCPA litigation. And although the D.C. Circuit rejected a third argument that the FCC acted arbitrarily and capriciously with regard to customers’ revocation of consent, the court noted important concessions by the FCC that its order does not limit mutual agreements on revocation of consent procedures, and the court also analyzed the revocation of consent issue in several ways favorable to business.

The U.S. Chamber of Commerce filed a petition for review in the D.C. Circuit challenging the FCC’s recent ruling that would accelerate abusive class action lawsuits against businesses under the Telephone Consumer Protection Act (“TCPA”).

First, as explained in the Chamber’s petition for review, the FCC adopted a broad definition of the types of equipment covered by the TCPA, going so far as to suggest that even mass-market smartphones could be covered “autodialers.” The breadth of this ruling is highlighted by the fact that the FCC had to rely on the antiquated rotary phone as an example of equipment not covered by the law.

Second, the FCC concluded that the TCPA applies to any call made to a current subscriber or user of a reassigned wireless number, rather than the intended recipient.

Third, the FCC arbitrarily allowed just one call before imposing strict liability under the TCPA for calls that, without the caller’s knowledge, have been placed to a reassigned number—despite the fact that there is no practical way to verify the continued accuracy of numbers before a call is placed.

Fourth, the FCC significantly limited the TCPA’s consent defense, which is an essential statutory tool for warding off liability under the TCPA. The petition explains that, because the TCPA is increasingly the basis for meritless class actions that seek damages of up to $1,500 per call against businesses of all sizes and types, the FCC’s actions are particularly harmful for the Chamber’s members.

Helgi C. Walker, Scott P. Martin, and Lindsay S. See of Gibson, Dunn & Crutcher LLP served as co-counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center in this case.