Definitions Of ATDS and Called Party Reopened for Consideration; Revocation Rules Stand

A long way from final answers, but hints as to how the Commission and case law could/should proceed.

The D.C. Circuit issued its long-awaited opinion in the ACA International (formerly the American Collectors Association) challenge to the 2015 FCC Omnibus Order. The ruling consolidates 11 complaints, and addresses four matters:

  1. Definition of an ATDS – Commission definition unreasonable and impermissibly expansive
  2. Reassigned Numbers – Definition of Called Party and the One-Call Safe Harbor set aside
  3. Revocation of Consent – Reasonable expectation to effectively communicate revocation ok
  4. Health Care Messages – Commission empowered to distinguish between treatment and billing calls


1) Definition of an ATDS – The court felt the question of capacity turned on “how much” potential capacity was required for equipment to qualify as an ATDS. Despite the FCC’s contention, all modern smartphones would be swept into the FCC’s (over)broad definition of an ATDS. Thus, any uninvited call or text message from a smartphone would violate the TCPA, even if autodialer features were not used. This was inconsistent with the intent of the TCPA – protecting citizens from “hundreds of thousands of ‘solicitors’ making ‘telemarketing’ calls on behalf of tens of thousands of businesses.” The court went on to say, “the Commission’s interpretation of the term ‘capacity’ in the statutory definition of an ATDS is utterly unreasonable in the breadth of its regulatory [in]clusion” (citation omitted). As the FCC failed to articulate as comprehensible standard for defining an ATDS, the Order’s definition was unreasonable and impermissibly expansive.

On Predictive Dialers, the court went on to question whether devices that lack the capacity to generate random or sequential numbers were an ATDS. The court found an inherent contradiction in the FCC’s handling of numbers “randomly or sequentially generated” or that “come from a calling list.” Due to the lack of clarity, the court “set aside the Commission’s treatment of those matters.”

2) Reassigned Numbers – the court ruled the one-call safe harbor was arbitrary and capricious. Here again the Commission contradicted itself, stating that only a Called Party – i.e. current subscriber or customary user – could consent to calls, but it was reasonable for a caller to rely on a prior subscriber’s / user’s consent. No explanation was given as to why it was only reasonable for a single call, and it would be just as reasonable to extend to a second call. The Commission clearly wanted to afford callers an opportunity to learn about reassignment, but the exception did not square with the Commission’s interpretation for Called Party, which afforded no such exception – a caller is strictly liable for all calls made to a new subscriber (reassigned number). “As a result, we must set aside the Commission’s treatment of reassigned numbers as a whole.”


3) Revocation of Consent – The court felt challengers’ concerns were overstated. The rules permitted revocation of consent through any reasonable means clearly expressing a desire to receive no further calls. Reasonableness was based on the totality of facts and circumstances, focused on whether an opt-opt process was overly burdensome. Efforts by call recipients to sidestep clearly-defined and easy-to-use opt-out methods “betray the absence of any ‘reasonable expectation’ by the consumer that (one) could ‘effectively communicate’ a revocation request.” Moreover, while the Order prohibited a unilateral imposition of revocation rules by callers, the Order did not address revocation rules mutually adopted by contracting parties.

4) Health Care Messages – The scope of the Commission’s exemption for healthcare-related calls with a treatment purposes was upheld. The Commission’s rules created no conflict between TCPA and HIPAA compliance. The FCC simply declined to make billing and account related calls less burdensome. Nothing in HIPPA permitted the use of an ATDS “to bombard nonconsenting wireless users with calls and texts concerning outstanding charges.”

Moreover the exemption applied to ‘health care’ messages, with ‘health care’ defined under HIPAA as “care, services, or supplies related to the health of an individual.” The Commission was empowered to exempt messages critical to ‘health care,’ and distinguishing them from other non-critical messages. “It would be implausible to conclude that calls concerning telemarking, solicitation, or advertising content, or which include accounting, billing, debt-collection, or other financial content are made for ’emergency purposes.’ Even if accounting systems are in some sense necessary to the continued provision of healthcare, [t]imely delivery of these types of messages is not critical to that goal” (citation omitted).
[D. D.C.; 15-1211]
jbho: the ruling doesn’t necessarily resolve issues, but does provide some help.

The court didn’t say what an ATDS is, but did say what it’s not: equipment isn’t an ATDS just because it merely has the potential capacity to autodial. The court hinted in the dicta that the “human intervention” component the FCC declined to adopt in the Order, may provide needed clarity on the ATDS issue going forward. The court also suggested the FCC review what it means to “make a call” as it reconsiders the capacity question.

By rolling back the definition of “Called Party,” circuits that have yet to rule on this may steer the definition to include prior consent providing parties (i.e., the ‘intended recipient’).

On revocation, it was good to see the court support the idea that reasonableness in revocation cuts both ways, and plaintiffs can’t game out-outs for personal gain. This is consistent with recent case law on the subject, where long-winded opt-out requests that conspicuously avoided the word STOP were deemed unreasonable. See: Rando v. Edible Arrangements (D. N.J.; 1:17-cv-00701), Viggiano v. Kohl’s (D. N.J.; 3:17-cv-00243), and Epps v. Earth Fare (C.D. CA; 2:16-cv-08221).

The Health Care Message ruling seemed to also favor developing case law, where contacts to maintain a healthcare regimen are covered (e.g., flu shot  or prescription reminders), but sales-related calls (e.g., insurance sales) are not.

Also worth noting, the court ruled that since Rite Aid commented on a petition before the FCC, that gave it standing to bring a challenge as a ‘party aggrieved’ in an agency proceeding, that had “made a full presentation of views to the agency.” So if you think you might want to challenge an agency ruling, make sure to participate in the rulemaking process!

Perhaps most interestingly, the question of constitutionality of the TCPA was not raised.

More TCPA Fun
Petitions & Orders

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