In a Declaratory Ruling and Order issued in 2015, the Federal Communications Commission (“FCC”) sought to clarify key aspects of the Telephone Consumer Protection Act (“TCPA”), including (1) what device making calls qualifies as an Automated Telephone Dialing System (“ATDS”), (2) whether a call made to a reassigned telephone number where the prior subscriber gave consent constitutes a violation, (3) the manner required for a consumer to revoke consent, and (4) whether healthcare-related calls are exempt. The United States Court of Appeals for the District of Columbia Circuit in ACA International v. Federal Communications Commission set aside two parts of the Order but upheld two others.

Few aspects of the TCPA generate more uncertainty than the question of what devices making calls qualify as an ATDS. In its Order, the FCC adopted an approach that construes a device’s “capacity” to include its “potential functionalities” and not just its present capacity. This aspect of the Order was controversial from inception, with one dissenting Commissioner noting that all smartphones would be swept into the definition of an ATDS due to the prevalence of apps for just about any purpose, including the storing and recall of telephone numbers using a random or sequential number generator and the ability to dial such numbers.

The ACA International court set aside the FCC’s effort to clarify the types of calling equipment that fall within the TCPA’s restrictions. Finding that the FCC’s “understanding would appear to subject ordinary calls from any conventional smartphone to the Act’s coverage,” the court observed that under the FCC’s approach, a person inviting ten people by text message to a social gathering would have “infringed the TCPA ten distinct times” and “face a minimum damages recovery against her of $5,000”—an “anomalous outcome[]” that is an “unreasonable, and impermissible, interpretation of the statute’s reach” that fails to pass muster under Chevron.

The ACA International court also set aside the FCC’s treatment of the TCPA for circumstances in which a caller has prior consent from a subscriber, but the telephone number is reassigned without the caller’s knowledge. The FCC adopted the approach that the called party is the subscriber, but to mitigate harsh results, adopted a one-call safe harbor rule whereby a caller is not liable for the first call made following reassignment from a consenting subscriber to a new (nonconsenting) subscriber. Noting that the FCC rationalized the one-call safe harbor rule on grounds of reasonable reliance—namely, that the caller is reasonable to rely on prior consent until it learns of the reassignment—the court observed that the first post-reassignment call “might give the caller no indication whatsoever of a possible reassignment” and that it could be equally reasonable to rely on pre-reassignment consent for more than a single call. Finding the FCC’s approach arbitrary and capricious, the court “set aside the FCC’s treatment of reassigned numbers as a whole”—essentially requiring the FCC to go back to the drawing board.

The ACA International court, however, upheld two aspects of the 2015 Order. First, the court upheld the FCC’s approach to revocation of consent that provides that “a called party may revoke consent at any time and through any reasonable means—orally or in writing—that clearly expresses a desire not to receive further messages.” In so doing, the court rejected petitioners’ calls for, among other things, the establishment of standardized revocation procedures. Second, the court upheld the FCC’s response to Rite Aid’s request for exemptions from the TCPA’s prior-consent requirement for certain healthcare-related calls. At issue was the scope of the exemption: Petitioner Rite Aid sought the exemption for calls with a healthcare treatment purpose as well as calls that include telemarketing, solicitation or advertising content. The court upheld the FCC’s ruling that only calls with a healthcare treatment purpose are exempt.