TCPA Webinar DC Circuit Court Decision the Impact on Dialers, Reassigned Numbers and Consent Revocation

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D.C. CIRCUIT COURT DECISION:
THE IMPACT ON DIALERS,
REASSIGNED NUMBERS AND
CONSENT REVOCATION
Contact Center Compliance
Tonia Klausner, Partner, Wilson Sonsini
Goodrich & Rosati
David Kaminski, Partner, Carlson & Messer
Christine Reilly, Partner Manatt, Phelps &
Phillips

Agenda
D.C. Circuit Court Decision Recap
Reassigned Numbers
Revocation of Consent
The Definition of an ATDS
What Next?
D.C. Circuit Decision F.A.Q
Audience Q&A

Disclaimer
This information is not intended to be
legal advice and may not be used as
legal advice. Legal advice must be
tailored to the specific circumstances of
each case. Every effort has been made
to assure this information is up-to-
date. It is not intended to be a full and
exhaustive explanation of the law in
any area, however, nor should it be
used to replace the advice of your own
legal counsel.

D.C. Circuit Court Decision Recap
• “Which sorts of automated dialing equipment are subject to the
TCPA’s restrictions on unconsented calls”
• “When a caller obtains a party’s consent, does a call nonetheless
violate the Act if, unbeknownst to the caller, the consenting party’s
wireless number has been reassigned to a different person who
has not given consent”
• “How may a consenting party revoke her consent”
• “Did the Commission too narrowly fashion an exemption from the
TCPA’s consent requirement for certain healthcare-related calls.”it
Court Decision Recap
Speaker: Tonia Klausner

TCPA Provision for Wireless Calls/Texts
It shall be unlawful for any person within the United States, or any
person outside the United States if the recipient is within the United
States—
• (A) to make any call (other than a call made for emergency
purposes or made with the prior express consent of the called
party) using any automatic telephone dialing system or an artificial
or prerecorded voice—
• (iii) to any telephone number assigned to a paging service,
cellular telephone service, specialized mobile radio service, or
other radio common carrier service, or any service for which the
called party is charged for the call.
Decision Recap

D.C. Court Ruling: Reassigned Numbers
• FCC 2015 Ruling – Reassigned number: “called party” = current subscriber.
• FCC granted a “one-call safe harbor” for reassigned numbers where the called party
had a reasonable basis to call the number in the first place, i.e., with consent.
• DC Court HELD: Safe Harbor rule is “arbitrary and capricious” – No reasonable
basis. FCC rule set aside.
• BOTTOM LINE - DC Court Said: Not sure if FCC would have adopted “strict liability”
subscriber rule for reassigned numbers without a safe harbor rule - DC Court
strikes FCC’s ENTIRE treatment of Reassigned numbers.
Speaker: David Kaminski

D.C. Court Ruling: Reassigned Numbers
• DC Circuit Agrees with 7th Circuit Soppet decision – that FCC was not
compelled to interpret “called party” as the intended recipient. Called
party can mean “current subscriber”
• DC Circuit’s comments against “strict liability” and definition of called
party may revive “Intended Recipient” defense or give rise to
“reasonableness” arguments
• DC Court Noted: FCC currently addressing 2nd Further Proposed Notice
of Rule Making regarding real time database for reassigned number with
potential safe harbor

D.C. Circuit Court: Reassigned Numbers-
Where Does this Leave Us?
• Argue – “Intended Recipient” of call theory controls
• “reasonableness” arguments still in play – Critical Issue: How was
number obtained in first place??
• Will FCC be Knight In Shining Armor?

D.C. Cir.’s Ruling
• Affirmed: Called parties may revoke consent
under TCPA through any reasonable means
• Disregarding clear opt-out instructions is likely
unreasonable
• “No need to train every retail employee on the finer
points of revocation”
• FCC 2015 Ruling does not affect parties’ ability to
contract as to specific revocation methods
• Commissioner O’Rielly disagreed with the ruling
and favors a “Reyes” approach
Speaker: Christine Reilly

Implications:
• Revocation will continue to be a fact-based
inquiry
• Consumers likely cannot reject clear, simple
opt-out instructions in favor of convoluted,
imaginative opt-out attempts
• Contractual provisions providing specific opt-
out mechanisms not prohibited by FCC order
• Jurisdictional case law on revocation likely to
control

Best Practices:
• Create and maintain policies and procedures
to handle revocation requests
• Prepare agents to accept revocation
requests on both inbound and outbound
calls and to update the system accordingly
• Allow opt-out on IVR
• Include “STOP” instructions on text
messages

Best Practices:
• Have system in place to capture and record
revocations
• Train your agents and employees
• Good recordkeeping on consent and
revocation is essential
• Audit and test your compliance

Automatic Telephone Dialing System Defined
Automatic telephone dialing system
227a:
(1) The term “automatic telephone
dialing system” means equipment which
has the capacity— (A) to store or
produce telephone numbers to be
called, using a random or sequential
number generator; and (B) to dial such
numbers.
Decision Recap

Capacity of Autodialer- FCC 2015 Ruling Said
• Actual Capacity
• Potential Functionalities – Future capabilities
• Theoretical Capacity – FCC said NOT a dialer (ex. Rotary phone)
Decision Recap

D.C. Circuit Court Autodialer Ruling Analysis
Issue 1: Capacity
FCC 2015 “Capacity” Ruling too broad - encompassed the
smartphone as an ATDS
• If “capacity” includes adding an App that enables autodial
capability, then all smartphones are auto dialers – FCC did
not deny – could have exempted smartphones
• The smartphone has “potential capacity” and is an ATDS
• TCPA cannot possibly be read to include smartphones
• Intent of Congress re TCPA – unwanted robocalls
• RULING – FCC’s “capacity” definition is Overbroad – “utterly
unreasonable in the breadth of its regulatory inclusion.”
Decision Recap

ATDS “Capacity” Guidance from the D.C.
Court of Appeals: Implications from Decision
• If capacity is limited to “present” capacity, it contemplates
some future functioning
• Don’t get hung up on labels “present” or “potential”– focus on
“how much” is required to enable device to function as
autodialer. - Is it a mere flip of switch to turn on autodial
function, or top to bottom reconstruction? (note:
theoretical capacity rejected by FCC and not endorsed by DC
Court)
• Bottom line – Apps cannot create auto dialers
Decision Recap

D.C. Circuit Analysis- FCC Position: All of
these cannot have “capacity” to qualify as
ATDSPer DC Court, FCC 2015 Ruling said Following Devices May Qualify as an ATDS:
1. Devices that generate and dial random and sequential numbers;
2. Device that dial from an externally supplied set list of numbers
3. Predictive dialers are automatic telephone dialing systems
4. Devices that dial numbers without human intervention
5. Devices that can dial only with human intervention
6. Devices that can dial thousands of numbers in a short period of time
BOTTOM LINE – FCC’s lack of clarity requires DC Court to set aside ALL FCC
interpretations on features or devices that qualify as ATDS

D.C. Circuit Adds 3rd Wrinkle to ATDS
Interpretation
DC Circuit say Third issue NOT addressed on Appeal:
• What is meaning of: to “make any call using any” automatic
telephone dialing system.
• Must system use autodialer capability in order to invoke
potential liability – or does ban apply to calls made by
device having the capacity, even though not used.
• NOTE: FCC is free to address the issue in future rulemaking
or declaratory order

ATDS Definition
Statutory Definition of Autodialer—Includes TWO Functions
1) “to store or produce telephone numbers to be called, using a random or sequential
number generator” AND
2) “to dial such numbers”

ATDS Definition

ATDS Definition
D.C. Cir.’s Ruling:
• FCC order is contradictory and provides “no
meaningful guidance” to companies, leaving them
in a “significant fog of uncertainty”
• Why?
• First, the FCC gave no clear answer to whether
system is an ATDS if it can simply pull numbers
from a separate database or list OR only if the
device itself generates random or sequential
numbers and dials them

ATDS Definition
“A basic question raised by the statutory definition is whether a device must itself have
the ability to generate random or sequential telephone numbers to be dialed. Or is it
enough if the device can call from a database of telephone numbers elsewhere? The
Commission’s ruling appears to be of two minds on the issue.”
“So which is it: does a device qualify as an ATDS only if it can generate random or
sequential numbers to be dialed or can it so qualify even if it lacks that capacity? The
2015 ruling . . . gives no clear answer (and in fact seems to give both answers).”
Either might be permissible but FCC cannot offer “competing interpretations” in the
same order!

ATDS Definition
• FCC order is contradictory and provides “no meaningful
guidance” to companies, leaving them in a “significant
fog of uncertainty”
• Why?
• Second, FCC also unclear about the extent to which
human intervention precludes ATDS finding
• FCC says the basic function of an ATDS is the
ability to dial numbers without human
intervention, but declined request to clarify the
definition in terms of human intervention

ATDS Definition
• FCC order is contradictory and provides “no
meaningful guidance” to companies, leaving
them in a “significant fog of uncertainty”
• Why?
• Third, FCC says ATDS can “dial thousands
of numbers in a short period of time,” but
what does that mean? Is it a necessary
condition?

ATDS Definition
• Asks probing questions…
• How much is required to enable the device to
function as an autodialer?
• Does it require simple flipping of a switch or top-
to-bottom reconstruction?
• What kinds of and how broad an area of telephone
equipment qualifies?
• … BUT does not provide any answers
• “Far from clear” that the distinction between present
and potential capacity “should carry dispositive
weight”

ATDS Definition
• Troubled by the idea that a device having capacity
to autodial is an ATDS even if the autodialer
features are not used to make the call
• Court offers an alternative around the ATDS
definition thicket
• Perhaps “make a call” portion of statute means
that the system must be using autodialing
capabilities to make call

What is an “autodialer” now?

What the D.C. Circuit Ruling Did and Did Not
DoNo definitive interpretation of ATDS Definition
• “The agency presumably could, if needed, fashion exemptions
preventing a result under which every uninvited call or message from a
standard smartphone would violate the statute.”
No definitive interpretation of “called party”
• FCC permissibly interpreted “called party” as something other than
“intended recipient”
Callers can continue to revoke consent through any reasonable means
• “The Commission’s ruling absolves callers of any responsibility to adopt
systems that would entail ‘undue burdens’ or would be ‘overly
burdensome to implement.”
Decision Recap

What the D.C. Circuit Ruling Did and Did Not
DoSeveral Useful Statements for Defendants:
• “[A]n ATDS is equipment with the ‘capacity’ to perform
each of two enumerated functions: (i) storing or
producing telephone numbers ‘using a random or
sequential number generator’ and (ii) dialing those
numbers.”
• “The statutory definition says that a device constitutes an
ATDS if it has the capacity to perform both of two
enumerated functions . . . .”
• “Congress need not be presumed to have intended the
term “automatic telephone dialing system” to maintain its
applicability to modern phone equipment in perpetuity,
regardless of technological advances that may render the
term increasingly inapplicable over time.”
• Rules that Court properly had before it question of
required functionalities of an ATDS thereby considering
2003, 2008 and 2015 FCC statements on what qualifies
as an ATDS
Decision Recap

• Avoid TCPA Litigator Sharks Lurking in
Leads
• Litigator Scrub: Defense Network Stops
Sneak Attacks
• TCPA Reassigned Number Scrub: Flags
Wrong Number Sharks
TCPA Safe Harbor
Solutions

Free TCPA Risk Assessment
Find dangerous vexatious litigators and
reassigned numbers today before it’s
too late.
ryan@dnc.com
707-303-4844 direct
Ryan Thurman
Director of Sales & Marketing

Questions?
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TCPA Webinar DC Circuit Court Decision the Impact on Dialers, Reassigned Numbers and Consent Revocation

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TCPA Webinar DC Circuit Court Decision the Impact on Dialers, Reassigned Numbers and Consent Revocation