D.C. Circuit Court Hears Oral Argument in ACA Lawsuit Appealing FCC’s TCPA Order

During a lengthy oral argument, DC Circuit court judges ask detailed questions about the FCC’s 2015 TCPA Order and acknowledge the complexity of issues at stake.

The federal appeals court for the District of Columbia Circuit heard the much-anticipated oral arguments yesterday in ACA International, et al. v. FCC. The ACA Int’l consolidated appeal challenges the validity of the Federal Communication Commission’s oft-criticized interpretations of the Telephone Consumer Protection Act in its July 10, 2015 Omnibus Declaratory Ruling and Order related to autodialers, reassigned numbers and revocation of consent. 

Although the three-judge panel, including Judge Sri Srinivasan, Judge Nina Pillard and Senior Circuit Judge and Chief Judge Emeritus Harry Edwards, allotted twenty minutes of oral argument time for each side, the oral arguments lasted for nearly three hours. ACA and the other petitioners strategically focused critical argument on three core areas of dispute concerning the definition of an “automatic telephone dialing system,” the identity of the “called party” in the reassigned number context, and the means by which consent can be revoked.  

First, ACA and the other petitioners concentrated their argument on the FCC’s overbroad and inconsistent definition of an ATDS. The joint petitioners told the appellate panel that the statutory text of the TCPA is clear, precise, and carefully calibrated to target a particular problem and that Congress did not intend for the ATDS restrictions to ban all computer-assisted calling systems.  Petitioners emphasized that the FCC has no authority to rewrite the TCPA statute or solve a problem that Congress did not set out to solve.  The joint petitioners also argued that FCC’s “theoretical modification” test to determine whether a calling system is an ATDS is impermissibly vague and therefore unconstitutional.

For their part, the judges on the panel appeared to understand the challenges surrounding the definition of an ATDS and focused questions on where to draw the line on “capacity”, issues related to the functionality of equipment - such as what it means to store or produce numbers to be called, application of the FCC’s ATDS test to smartphones, and the relationship between the TCPA’s general ATDS prohibition and the specific ATDS definition.

While the FCC was arguing their side on the ATDS issue, Judge Srinivasan made the point that “You have to read the words in the statute.”

In addition, the joint petitioners addressed the issue of “called party” in the reassigned number context.  Here, ACA and the other petitioners argued that called party and prior express consent need to be read together in order for consent to be reliable.  In terms of a solution, the joint petitioners stated that interpreting called party to mean “expected recipient” would solve the reassigned number problem. 

The joint petitioners also decried the FCC’s one-call safe harbor for calls to reassigned numbers.  The joint petitioners argued that the safe harbor is arbitrary and capricious because it deems a caller has constructive knowledge of a number reassignment after one call whether or not it provided any way for the caller to gain actual knowledge of a reassignment.  Furthermore, the joint petitioners described the list of solutions offered by the FCC in the 2015 TCPA Order to determine a number reassignment as untenable.

In response to the reassigned numbers issue, the panel questioned the viability of the FCC’s list of practices to learn about number reassignments. At one point Judge Edwards stated that the FCC’s list of best practices seem “silly” to him and that the FCC’s suggestions are not as straightforward as it believes.  Judge Srinivasan also raised the point that there is a “social cost” if the view the FCC espouses on reassigned numbers incentivizes callers to stop making informational calls that consumers want. 

Finally, ACA and the other petitioners addressed the agency’s vague and overly broad standards for revocation of consent.  The joint petitioners argued that the standards set by the FCC’s 2015 TCPA Order allowing consent to be revoked at any time and by any means is arbitrary and capricious because it allows revocations to be delivered in ways that do not reasonably inform companies of the called party’s preferences.  In addition, the joint petitioners asserted that the FCC’s suggestions of revocations that would be reasonable are unworkable for callers and that instead there needs to be standardized methods of revocation.

In response to the revocation arguments, Judge Pillard inquired about callers creating clear, easy, and accessible methods for consumers to revoke consent.  To this, the joint petitioners made clear that even in instances where easy revocation pathways were made clear by a caller, lawsuits about individualized revocations have still been filed.

ACA’s CEO, Pat Morris, Vice President and General Counsel, Robert L. Föehl, and Regulatory Counsel, Maria Wolvin, attended oral arguments. "The oral arguments in our case against the FCC is the culmination of 15 months of intense work and preparation,” Föehl stated. “We made powerful arguments before a panel of engaged judges who appeared to understand the complexity of the TCPA and the issues resulting from the FCC’s 2015 ruling.  Now we wait patiently for their informed decision.”

Although a decision could come at any time, it is not expected until next year.

As ACA International reported previously, ACA filed the first petition for review within hours after the FCC issued the TCPA Order in July, 2015. ACA argued in its petition that the FCC’s exercise of regulatory authority expanded the scope and reach of the TCPA in a way that Congress never intended – leaving a law in place that hurts legitimate, law-abiding business. ACA’s appeal, as well as the subsequent appeals filed by nine other businesses and organizations, were later centralized in the D.C. Circuit by the Judicial Panel on Multidistrict Litigation. 

ACA will continue to provide relevant updates on the status of ACA’s ground breaking litigation against the FCC.