On July 10, 2015, the Federal Communications Commission (“FCC”) released its much-anticipated Telephone Consumer Protection Act (“TCPA”) declaratory ruling, expanding on the positions announced at its June 18 Open Meeting on important TCPA issues. The ruling resolves 21 requests for clarification, and, in particular, confirms that an “automatic telephone dialing system” (i.e., an autodialer) includes devices that do not “currently” or “presently” have the capacity to dial random or sequential phone numbers without human involvement. This will be a controversial ruling. In fact, ACA International immediately filed a lawsuit in the U.S. Court of Appeals of the D.C. Circuit following the release of the ruling, alleging that the ruling expands the scope of the TCPA further than Congress intended. Over the next week, we will be exploring the ruling in more detail, but today we analyze arguably the most controversial issue: the definition of autodialer.
The FCC’s ruling states that a device meets the definition of autodialer “even if it is not presently used for that purpose, including when the caller is calling a set list of consumers.” In its Order, the FCC reaffirmed that predictive dialers fall under the TCPA, again asserting that “Congress intended a broad definition of autodialer.” However, the FCC refused to provide clarity on what constitutes “human intervention” that would place a call outside the scope of TCPA liability, stating that “how the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.” Thus, it is possible that a preview dialer, which enables call representatives to first view available information about the consumer and, then, decide whether to place the call, may fall outside the TCPA’s definition of autodialer given that some level of human involvement is required to place the call in the first instance.
The FCC ruling establishes the “outer contours” of the definition of autodialer, but provides few protections to businesses engaging in telemarketing. Specifically, the ruling states that the definition does not extend to “every piece of malleable and modifiable dialing equipment,” otherwise a handset with a speed dialer would be an autodialer. As an example of what is not an autodialer, the FCC explains that “it might be theoretically possible to modify a rotary-dial phone to such an extreme that it would satisfy the definition of ‘autodialer,’ but such a possibility is too attenuated for us to find that a rotary-dial phone has the requisite “capacity” and therefore is an autodialer.” Further, the FCC rejected pro-business arguments that, under the FCC’s definition, any device such as a cell phone could be an autodialer, explaining that “there is no evidence that individual consumers have been sued based on typical use of smartphone technology.”
Finally, the FCC held that liability for autodialed calls still could attach in situations where a voluntary combination of equipment combines to allow the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers. As a result of the ruling’s new autodialer rules, more devices could be considered autodialers than ever before, further increasing the likelihood of class actions.
Although the FCC’s declaratory ruling repeatedly discusses striking a balance between protecting consumers while permitting legitimate telemarketing practices, the new rules create a number of challenges for businesses who engage in telemarketing. Telemarketers should take a close look at the rules and stay tuned to this blog for more information about the order in the coming days.