Describing the TCPA as “dysfunctional” and “in need of clarity,” an eighteen-party coalition led by the U.S. Chamber of Commerce and ACA International filed a Petition for Declaratory Ruling on Thursday, May 3. The petition urges the FCC to issue a declaratory ruling to clarify and narrow the scope of the TCPA’s definition of an “automatic telephone dialing system” (“ATDS”).

The ATDS Issue – A Brief History

For quite some time, ATDS issue has been a major area of interest for platform providers, marketers, brands, and the Commission, with the former three almost always disagreeing with the agency as to how the ATDS term should be interpreted under the TCPA.  As the coalition noted in its Petition, the term at first was defined rather narrowly “to stop an abusive form of cold-call telemarketing and fax-blast spamming from machines” that could dial hundreds of calls every few minutes.  But overtime the ATDS definition broadened with interpretations by the courts and the FCC that strayed far from the statute’s text, Congressional intent, and common sense.

By 2015, the actual definition of an ATDS had become so ambiguous and confusing that multiple petitioners asked the FCC to provide common sense guidance on what was and was not considered an ATDS.  But despite these requests for clarity, the Commission instead released its Omnibus Order,[1] which further broadened the interpretation to include not only devices that can presently generate random or sequential numbers, but also devices that could be altered or modified to generate random or sequential numbers in the future.  Ultimately, this new definition only brought more lawsuits, forcing businesses to constantly fight off frivolous claims in lieu of innovating and communicating with their customers.

But the Commission’s ATDS definition in the Omnibus Order was ultimately overturned.  As we previously discussed, the D.C. Circuit vacated the Commission’s ATDS interpretation in its ACA International v. FCC decision,[2] holding that the interpretation of capacity was “utterly unreasonable,” “incompatible with” the statute’s goals, and “impermissively” expansive.  Thus, the ATDS definition has again become unclear.  But in comes the coalition.

The Petition for Declaratory Ruling

Introducing its Petition by describing the FCC’s 2015 Omnibus Order to be more of a problem than a solution, the coalition requested that the Commission follow the logical reasoning of the D.C. Circuit in its ACA International decision as it pertained to the ATDS definition.  Accordingly, the coalition’s Petition included two requests, each of which, it says, would assist in dramatically decreasing the number of frivolous TCPA cases that are filed on an annual basis and bring the TCPA back to its roots.  As described in more detail below, these requests were that the Commission:

  1. Confirm that to be an ATDS, equipment must use a random or sequential number generator to store or produce numbers and dial those numbers without human intervention; and
  2. Find that only calls made using actual ATDS capabilities are subject to the TCPA’s restrictions.

Defining ATDS on the Device’s Actual—Not Theoretical—Use

The coalition’s first request in its Petition is for the FCC to clarify that, to be an ATDS, a devise’s random or sequential number generation functions must be actually—not theoretically—present and active in the devise at the time the call is made and that the devise does not require human intervention to be used.

As the coalition noted, the TCPA, as written, defines what an ATDS is in a straightforward manner: The devise must have the capacity to “store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.”  That’s it.  It should not matter that the device could someday in the future have the ability to dial random or sequential numbers (as the Commission concluded in its 2015 Omnibus Order), as the statutory language is written in such a way that only present ability should be considered.  Indeed, if Congress wanted to include both present and future capacity in the ATDS definition, the coalition said, it would have added more tenses and moods.  But it didn’t, thereby implying that the definition was to be limited to only those capabilities that the device presently has.

Of course, the coalition would have been remiss had it not brought up the recent ACA International decision, so in calling its proposal a “clear, bright-line rule for callers,” the coalition reminded the Commission, through the words of the D.C. Circuit, just how wrong it had gotten the ATDS definition in 2015:

[A]s the D.C. Circuit noted, “[t]he Commission’s capacious understanding of a device’s ‘capacity’ lies considerably beyond the agency’s zone of delegated authority for purposes of the Chevron framework.” . . .  It also found that the Commission had offered an inconsistent and “inadequa[te]” explanation of what features constitute an ATDS, “fall[ing] short of reasoned decision-making.”

Accordingly, the coalition reminded the Commission that it could fix its previous wrongs by adopting the coalition’s proposal, thereby “creat[ing] a clear rule for businesses to follow and courts to enforce, instead of a vague, case-by-case analysis of each piece of dialing equipment.”

Limiting TCPA Restrictions to Calls Made Using Actual ATDS Capabilities

Furthermore, the coalition proposed that the FCC adopt an alternative approach to TCPA liability that was first raised by Commissioner O’Rielly and thereafter suggested by the D.C. Circuit:  That the Commission reinterpret the phrase “make any call … using an [ATDS]” to require a caller to use the statutorily defined functions of an ATDS to make a call.

According to the coalition, adopting this construction would substantially diminish the practical significance of the Commission’s expansive understanding of “capacity,” as such a construction would make a device’s potential capabilities irrelevant in determining whether the device is an ATDS and focus the inquiry on the functions actually used to make the call or calls in question.  For example, this interpretation would ensure that devices capable of gaining autodialer functions, such as smartphones, are only subject to the TCPA when actually used as autodialers.

What Lies Ahead

After the D.C. Circuit released its decision in ACA International, it was clear that the ATDS definition would change.  What was not known, however, was what that definition would be.  With this Petition for Declaratory Ruling, we now have at least one idea of what the future could hold for the ATDS definition and TCPA liability.  Of course, this process is only beginning, and in the coming weeks other policy holders will likely put forward contrasting (or similar) definitions.

The complete Petition for Declaratory Ruling can be found here.

The Docket Number referenced in the Petition is 02-278.

 

[1] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, 30 F.C.C. Rcd. 7961 (“Omnibus Order”).

[2] ACA Int’l v. Fed. Commc’ns Comm’n, 885 F.3d 697 (D.C. Cir. 2018).

 


 

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