On March 16, 2018, the D.C Circuit issued a decision invalidating portions of the FCC’s 2015 TCPA Omnibus Declaratory Ruling and Order. Notably, the decision overturns as “arbitrary and capricious” the FCC’s definition of an automated telephone dialing system (“ATDS”) and the one-call safe harbor for calling a phone number that has been reassigned to a non-consenting person. The decision was not a complete victory for businesses as the D.C. Circuit sustained the FCC’s order on both consumers’ ability to revoke consent and the scope of the “time-sensitive healthcare call” exemption.

The FCC’s Definition of ATDS is Arbitrary and Capricious

In the 2015 Order, the FCC defined an ATDS as equipment that contained the potential “capacity” to dial random or sequential numbers, even if that capacity could be added only through specific modifications or software updates, so long as the modifications were not too theoretical or too attenuated. In crafting this definition, the FCC noted that smartphones could be included within the definition and only categorically ruled out a rotary-dial telephones.

In striking down the 2015 Order, the court made it clear that under the current definition of an ATDS, anyone with a smartphone, which the court estimates to be 80% of the population, is at risk of violating the TCPA because “all smartphones, under the Commission’s approach, meet the statutory definition of an autodialer.” Under the FCC’s interpretation, if a person sent a group text message to ten acquaintances without obtaining their express consent, he or she would be liable for ten distinct violations of the TCPA, with a minimum damage recovery of $5,000. In sum, the court held that “[i]t cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact.” The D.C. Circuit held that, if the 2015 Ruling does not encompass smartphones, then the FCC failed to “articulate a comprehensible standard.”

In striking down the FCC’s sweeping definition of an ATDS, the court ordered the FCC going forward to take into account whether a system actually used autodialer functionality or whether it was merely possible to download software to convert a telephone into an ATDS. Additionally, the court held that the FCC must determine whether the definition of an ATDS requires that a system “must itself have the ability to generate random or sequential telephone numbers,” or whether it is “enough if the device can call from a database of telephone numbers generated elsewhere.” Finally, the court left open the issue of human intervention. Based on the decision, if the FCC departs from the statutory requirement of using a random or sequential number generator, it must also tackle the issue of human intervention.

In light of Chairman Ajit Pai’s expression of support for business-friendly reforms to the TCPA, it is likely that the D.C. Circuit’s ruling may result in real change in this area of the law.

The FCC’s One-Call Safe Harbor and Definition of “Called Party” are Arbitrary and Capricious

The court then turned its attention to the distinct challenges raised by the reassignment of cell phone numbers. Under the 2015 Order, a caller could place only a single call to a reassigned number before running afoul of the TCPA. Per the 2015 Order, a “called party” was the current subscriber, i.e. the consumer assigned the number and billed for the call.

The D.C. Circuit rejected both the one-call safe harbor for calling reassigned numbers and the definition of “called party.” The court held that issues related to calls or texts to reassigned numbers where the prior owners had provided consent to be contacted, present a looming challenge because “there is no dispute that millions of wireless numbers are reassigned each year.”

The court set aside the FCC’s post-reassignment interpretation on the ground that a one-call safe harbor is “arbitrary and capricious.” In reaching this result, the court focused on the FCC’s own determination that callers must be able to reasonably rely on the consent provided by former subscribers when calling or texting. Based on the record before it, the court held that it was not reasonable to hold that placing a single call to a reassigned number was likely to afford a caller reasonable notice that the number was one of the millions of numbers reassigned each year. By striking down the one-call safe harbor and the definition of “called party,” the court provided defendants with a potential defense to avoid liability for calling reassigned numbers if a defendant can establish that its reliance on the former subscriber’s consent was reasonable at the time it placed calls to the new subscriber.

Critically, in addition to striking down the one-call safe harbor, the court set aside the definition of “called party” as the “current subscriber” on the grounds that it would impose strict liability for calls to reassigned numbers. Thus, it appears that defendants may once again argue that “called party” means “intended recipient” when defending against TCPA claims based on calls or texts to reassigned numbers.

Consumers May Still Revoke Consent in Any “Reasonable” Manner

In upholding consumers’ right to revocation of consent, the court set limits. As an initial matter, a consumer may only revoke consent using “reasonable” means. The reasonableness of the revocation is governed by a totality-of-the-circumstances test. Thus, if a consumer uses creative revocation techniques or declines to follow reasonable revocation procedures set forth by the caller, the revocation may not be reasonable or permissible. Moreover, the D.C. Circuit emphasized that the FCC’s ruling “does not address revocation rules mutually adopted by contracting parties,” meaning that callers and consumers may contractually agree to revocation mechanisms.

TCPA Consent Standards for Healthcare Calls Upheld

The D.C. Circuit declined to expand the scope of calls placed to wireless numbers without express consent “for which there is exigency and that have healthcare treatment purposes.” Under the 2015 Order, calls placed to consumers for certain purposes, including, appointment reminders, pre-operative instructions and lab results do not require consent. In upholding the contours of the 2015 Order, the court declined to except “advertisements, solicitations and post-treatment financial communications” from the consent requirements. The court held that billing communications are not made for “emergency purposes.”


As of now, the state of the TCPA is in flux. Under Chairman Pai, we are cautiously optimistic that the new FCC regime will likely advance more business-friendly rules. We will continue to monitor changes to the law and provide timely updates.

shutterstock_547852024Seyfarth Synopsis: In a first-of-its kind ruling, an employer recently secured the dismissal with prejudice of what is believed to be one of the first Telephone Consumer Protection Act class actions ever brought against a company while acting as an employer – specifically in this instance, the use of robo-calls to contact applicants about employment opportunities. The ruling ought to be required reading for corporate counsel in order to understand this emerging risk and to craft strategies to protect companies against such claims.


When most people think of class actions brought under the Telephone Consumer Protection Act (“TCPA”), they envision lawsuits against companies using automated voices to tell them they won a free cruise or are eligible to receive a discount on a product. But in Dolemba v. Kelly Services, Inc., No. 16-CV-4971, 2017 U.S. Dist. LEXIS 13508 (N.D. Ill. Feb. 1, 2017), the Plaintiff, who had previously given her contact information to temporary staffing company Kelly Services, Inc. (“Kelly”) to be contacted regarding employment opportunities, brought a class action against Kelly under the TCPA and Illinois Consumer Fraud Act (“ICFA”) alleging that Kelly made an unauthorized robo-call to her cell phone. Kelly resisted the claim, filed a motion to dismiss, and Judge Sara Ellis of the U.S. District Court for the Northern District of Illinois granted Kelly’s motion to dismiss both claims with prejudice, finding that the Plaintiff never revoked her consent to be contacted about employment opportunities.

The ruling in Dolemba is believed to be one of the first TCPA class actions ever brought against a company while acting as an employer, thus making this ruling a landmark victory for employers nationwide. The potential for employers to face similar novel TCPA class actions in the near future is now imminent – and employers can and should add this decision to their arsenal as a powerful tool to help defeat such actions.

Case Background

In March 2007, Plaintiff applied for employment with Kelly, indicating interest in positions using office skills such as accounts payable and accounts receivable. Id. at *1. Plaintiff’s employment application included her cellular phone number. In signing the application, Plaintiff “authorize[d] Kelly to collect, use, store, transfer, and purge the personal information that [she] provided for employment-related purposes.” Id. Kelly never offered Plaintiff a job, nor did Plaintiff ever accept employment through Kelly. She also did not receive any communications from Kelly between the end of 2007 and February 2016. Id. at *1-2.

On February 27, 2016, Plaintiff received an automated call on her cellular phone from Kelly. Id. at *1. Kelly contacted Plaintiff about potential job opportunities. Because Plaintiff did not answer the call, Kelly left a voicemail message regarding opportunities for employment as a machine operator in the Chicagoland area. Plaintiff alleged that she had no reason to believe that Kelly still treated her application as active in 2016. Responding inconsistent with the notion that no good deed goes unrewarded, Plaintiff brought a class action lawsuit alleging that Kelly violated the TCPA and ICFA by calling her cellular telephone using an automatic telephone dialing system. As part of its defense strategy, Kelly moved to dismiss Plaintiff’s claims and strike her class allegations.

The Court’s Decision

The Court dismissed Plaintiff’s TCPA and ICFA claims with prejudice. First, the Court accepted Kelly’s argument that Plaintiff had essentially “pleaded herself out of court” and further found that Kelly met its burden of consent as an affirmative defense. Id. at *3-4. Specifically, the Court held that although Plaintiff need not have anticipated or pleaded revocation of consent, she only maintained that she had no reason to believe her employment application was active and she had no further communications with Kelly after consenting to receive employment-related communications. Id. at *5-6. Therefore, the Court found that Plaintiff’s consent remained valid at the time Plaintiff filed the case. Id. at *6.

The Court also rejected Plaintiff’s attempt to “recast her consent” as only agreeing to accept calls relating to specific employment opportunities, holding that “the call [Plaintiff] received clearly related to an employment opportunity. Although not specifically tailored to the exact job interests [Plaintiff] indicated in her application, it still fell within the broad consent she gave to use her cellular phone number to contact her generally for employment-related purposes regardless of whether that job matched her job interests.” Id. at *7. Accordingly, the Court found that because Plaintiff pleaded herself out of court by attaching her employment application, which indicated she consented to receiving calls from Kelly for employment-related purposes, her TCPA claim must be dismissed.

Plaintiff also brought a claim under the ICFA alleging that Kelly engaged in unfair acts and practices by making the allegedly unauthorized robo-call to her cellular phone in violation of §§ 2 and 2Z of ICFA, 815 Ill. Comp. Stat. 505/2, 2Z. Id. at *8. The Court explained that to state an ICFA claim, Plaintiff must allege: (1) a deceptive or unfair act or practice by Kelly, (2) Kelly’s intent that Plaintiff rely on the deceptive or unfair practice, (3) the unfair or deceptive practice occurred in the course of conduct involving trade or commerce, and (4) Kelly’s unfair or deceptive practice caused Plaintiff actual damage. Id. at *8-9. In dismissing Plaintiff’s ICFA claim, the Court found that “receiving one pre-recorded message does not rise to the level of an oppressive practice” and that damages such as “loss of time and loss of battery life” are “so negligible from an economic standpoint as to render any damages unquantifiable.” Id. at *10. The Court further rejected Plaintiff’s argument that Kelly violated the Illinois Telephone Act because the message did not solicit the sale of goods and or services and therefore, did not fall under the definition of “recorded message” in the Illinois Telephone Act. Id. at *10-11. Accordingly, the Court dismissed Plaintiff’s ICFA claims with prejudice.

Implications For Employers

This is a landmark victory for employers, especially companies who utilize automated calls and text messages to contact prospective and/or current employees about job-related opportunities or employment matters. Employers can almost certainly expect similar lawsuits brought against them under the TCPA. Fortunately for employers, Kelly’s victory provides a roadmap for how to defeat such cutting edge class actions.

A seemingly innocuous recruitment text message from the United States Navy has led to the official unraveling of a tactic long-used and widely-favored by defendants to escape a class action lawsuit before class certification. In a 6-3 decision, the United States Supreme Court rejected the argument that an unaccepted settlement offer or offer of judgment moots a plaintiff’s claim and thus a class action as well.

Background and Procedural History

In Campbell-Ewald Company v. Gomez, Petitioner, Campbell-Ewald Company, was retained by the United States Navy to conduct a multimedia recruitment campaign aimed at young adults. One branch of this campaign included sending text messages to potential recruits encouraging them to consider the Navy. The Navy approved the text messages as long as they were only sent to those who “opted-in” to receive marketing materials.

Campbell then contracted with another company, Mindmatics LLC, to identify cell-phone users between 18 and 24 years old who had consented to receiving text messages from the Navy. In May of 2006, Mindmatics transmitted the Navy’s recruitment text to over 100,000 recipients.

One of those recipients was the Respondent, Jose Gomez. Gomez was, at the time, a 40-year-old man who had not consented to receiving text messages from the Navy. Gomez alleged that Campbell violated the Telephone Consumer Protection Act (TCPA), which “prohibits any person, absent the prior express consent of a telephone-call recipient, from “mak[ing] any call . . . using any automatic telephone dialing system . . . to any telephone number assigned to a paging service [or] cellular telephone service.” 47 U.S.C. §227(b)(1)(A)(iii).

Gomez filed a class action complaint in the District Court for the Central District of California seeking treble and statutory damages, costs, and attorney’s fees, as well as an injunction against Campbell’s involvement in unsolicited messaging.  Prior to the deadline for filing a motion for class certification, Campbell made a Rule 68 offer of judgment that included paying Gomez his costs excluding attorneys’ fees, $1,503 per message received and an injunction which barred Campbell from sending text messages in violation of the TCPA, but denied any liability. Gomez did not accept the offer. Before Gomez filed his motion for class certification, Campbell filed a motion to dismiss, arguing the district court lacked subject matter jurisdiction over the matter since no case or controversy remained now that Gomez had been provided with complete relief for his injury, and thus the putative class claims also became moot. The district court denied the motion.

Campbell subsequently filed a motion for summary judgment, arguing the U.S. Navy enjoys sovereign immunity from the TCPA and that as a contractor for the Navy, Campbell acquired that immunity. The district court agreed and dismissed the case. The Ninth Circuit Court of Appeals reversed the lower court, holding that Campbell was not entitled to sovereign immunity and that an unaccepted Rule 68 offer of judgment does not moot an individual claim or a class action. The Supreme Court granted certiorari to settle a disagreement amongst the courts of appeals as to whether a Rule 68 offer of judgment does or does not moot a plaintiff’s claim.

The Supreme Court Opinion

Adopting Justice Kagan’s reasoning from her dissenting opinion in Genesis HealthCare Corp. v. Symczyk (in which the Court reserved the issue of whether an offer of judgment moots a claim) the Court found that, “[w]hen a plaintiff rejects such an offer—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect.”

The Court further reasoned that once the offer expired, the parties remained adversaries, as both retained the same stake in the litigation they had at the outset. The Court noted that Rule 68 provides that an unaccepted offer is only admissible when determining costs, and for no other reason.

Since Gomez’s individual claim still stood, the Court ruled “a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.”

Of note, however, is the caveat offered by the Court at the end of its analysis, in which it reserves ruling on a hypothetical situation in which “a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.”

The Court also rejected Campbell’s sovereign immunity argument, determining that it did not follow the Navy’s implicit instructions to confirm the messages complied with the TCPA.

Conclusion and Implications

The Supreme Court’s ruling settles once and for all the effect of an unaccepted Rule 68 offer of judgment or settlement offer on a plaintiff’s claim. However, the Court appears to have left the door cracked for defendants via its unanswered hypothetical on the possibility of depositing the full amount of plaintiff’s claim into a bank account payable to the plaintiff. While it is unclear how the Court would rule in such a case, it will not likely be long before a defendant tests the waters.

Under what circumstances does a person give his “prior express consent” to be contacted on his cellphone by a creditor? The Sixth Circuit recently examined that very question in Hill v. Homeward Residential, Inc., where it determined that consent exists if the debtor gives a cellphone in connection with an existing debt and that the number need not be provided during the initial transaction forming the debit.  No. 14-4168 (6th Cir. Aug, 21, 2015). How-Many-Mortgage-Payments-Can-I-Miss-Before-Foreclosure-300x199


In Hill, Plaintiff initially obtained a mortgage in 2003 and provided his home and work phone numbers on the initial application. Plaintiff subsequently cancelled his home phone and replaced it with his cell phone. When Plaintiff’s mortgage was transferred to Defendant Homeward Residential, he contacted the company to alert them that his primary phone number was now his cellphone number. Plaintiff subsequently fell behind on his payments, attempted to work out a loan modification, and ultimately defaulted on his mortgage.  Plaintiff repeatedly provided Defendant with his cellphone in connection with these transactions.  Plaintiff also provided express written consent for Defendant to call his cellphone.

Defendant allegedly called Plaintiff regarding his mortgage 482 times between 2009 and 2013, 176 of which were with an autodialing device. Plaintiff sued Defendant for using auto-dialing devices to contact him without his consent, in violation of the TCPA.   Cross motions for summary judgment were denied by the district court. At trial, the jury returned a verdict for Defendant. Plaintiff appealed, arguing amongst other things, that the jury instruction on “prior express consent” was too broad.

The Sixth Circuit Opinion

The Sixth Circuit ruled that the following jury instruction, set forth below, was not “confusing, misleading, or prejudicial”:

“Prior express consent means that before Defendant made a call to Plaintiff’s cellular telephone number, Plaintiff had given an invitation or permission to receive calls to that number. Autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ‘prior express consent’ of the called party.”

The Sixth Circuit found the jury instruction to be consistent with the legal definition of prior express consent found in various FCC rulings, which held a creditor does not violate the TCPA when it calls a debtor who has provided his number in connection with an existing debt. While Plaintiff attempted to argue that “prior express consent” must be given during the transaction that resulted in the debt owed, which in this case was the initial mortgage issued in 2003, the Court did not agree. Instead, the Court ruled that a person gives “prior express consent” if he gives a company his cellphone number before it calls him. Of further note, the Court did not distinguish between regular and autodialed calls in the context of prior express consent, ruling “once a debtor gives his consent to be called on his cellphone, the creditor can use automated calls to that number.”


The Sixth Circuit’s ruling provides important clarity as to when and how a person can give prior express consent to being contacted on their cellphone. An equally important take-away is the Court’s finding that a consumer does not need to specifically consent to auto-dialed calls.

On August 26, 2015, we wrote about a decision out of the Northern District of California, Luna v. Shac, LLC, Case No. 5:14-cv-00607-HRL, 2015 WL 4941781 (N.D. Cal. Aug. 19, 2015), in which the defendant prevailed in defeating a TCPA class action using a “human intervention” based defense. Now, just two weeks later, another defendant in the district has prevailed on similar grounds. This may be a sign that this defense, bolstered by the FCC’s July 10, 2015 declaratory ruling, may be picking up steam.

In McKenna v. WhisperText, the plaintiff claimed a text message he received containing an anonymous invitation from a WhisperText user to join the platform violated the TCPA.  No. 5:14-cv-00424-PSG, 2015 WL 5264750 (N.D. Cal. Sept. 9, 2015).  The Court dismissed McKenna’s first amended complaint for failing to allege the WhisperText app used an ATDS to send the texts. McKenna’s next complaint made clear that the platform could only send these texts at the affirmative direction of a user. Based on this assertion, the Court dismissed the amended complaint on “human intervention” grounds, but with leave to amend. In his next complaint, McKenna withdrew allegations about the user’s control in the process, and fast-forwarded to what happens after the user provides the app with phone numbers. Ignoring the first user-initiated step, McKenna claimed the entire process was automated and required no human intervention. Id. at 3-4.

The Court rejected plaintiff’s attempt to ignore the human element of the message-sending process, stating that McKenna “strives mightily to direct attention to WhisperText’s automated processes, and discusses them as if they were completely detached from any user direction. Nonetheless, it neither denies nor contradicts McKenna’s earlier allegations regarding the user’s role.” Id. at 7. Notably, the Court relied on all papers on file in the action to ground its decision, concluding that: “it is undeniable from McKenna’s previous allegations that the human intervention of a Whisper App user is necessary to set those processes in motion.” Id.

In sum, WhisperText was not the “maker or initiator” of the call — the app use was — and this human intervention defeated the case.

We will continue to watch these cases in hopes of seeing a larger trend develop that could afford defendants in other jurisdictions a similar line of defense.

A recent decision out of the Northern District of California creates new hope for TCPA defendants. In Luna v. Shac, LLC, Case No. 5:14-cv-00607-HRL, 2015 WL 4941781 (N.D. Cal. Aug. 19, 2015), defendant Shac, LLC won summary judgment by arguing that the web-based application the company used to send promotional text messages could not operate without human intervention, a “defining characteristic” of an autodialer under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b)(1).text-message-marketing-green


The FCC made leeway for this decision in its July 10, 2015 declaratory ruling, which stated that “how the [TCPA’s] human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment . . . and is therefore a case-by-case determination.” FCC 15-72 at 15. Taking his cue from the FCC, the judge conducted a fact-intensive analysis that focused on how Shac’s employee interacted with the web-based text messaging platform at various stages of the process. The manual nature of the process, which required human intervention as several points, ultimately led to Shac’s victory.

The at-issue text messages were sent as follows: First, an employee of Shac would input telephone numbers into the platform, either by manually typing the numbers, cutting and pasting, or uploading them. Shac’s customers could also add themselves to the platform by sending text messages to the system. Second, a Shac employee would log into the platform to draft the text message. Third, the employee would designate the phone numbers to which the message would be sent. And fourth, the employee would click “send” to transmit the message to Shac’s customers. Id. at 2. Thus, human intervention was involved in nearly every step of the text-sending process. Because “the subject text message was sent as a result of human intervention,” and “the capacity to dial numbers without human intervention is required for TCPA liability,” the Court held that Shac was entitled to summary judgment. Id. at 7, 9 (emphasis added).


The Shac decision offers a ray of hope to Defendants seeking to show that the equipment they are using does not fall within the TCPA’s definition of an autodialer. While it remains to be seen whether other judges will similarly apply the FCC’s July ruling, the Shac decision has the potential to set the tone for other courts. We will be watching to see if this line of defense gains ground and keep you posted.

WebinarOn Thursday, September 10 at 12:00 p.m. Central, Seyfarth attorneys Michael Burns, Robert Milligan and Jason Stiehl will present the second installment of our 2015 Class Action Webinar Series. Presenters will discuss the climate to help retailers avoid becoming targets of litigation. This webinar will provide an overview of the current class action lawsuit landscape complete with discussion of recent cases, hot areas, and valuable takeaways to inform strategy. In addition, the panel will explain business practices that retailers should implement to reduce their risk of becoming a defendant in a class action lawsuit, including class action waivers.

Topics will include:

  • Telephone Consumer Protection Act (TCPA);
  • Song Beverly Consumer Warranty Act and similar state statutes;
  • Call Recording;
  • False Advertising and Comparative Pricing Fraud; ‘
  • Gift Cards/Loyalty Programs; and
  • Data Privacy.


If you have any questions, please contact events@seyfarth.com.

*CLE Credit for this webinar has been awarded in the following states: CA, IL, NJ and NY. CLE Credit is pending for GA, TX and VA. Please note that in order to receive full credit for attending this webinar, the registrant must be present for the entire session.


The Association of Credit and Collection Professionals (ACA) swiftly-filed a petition for review of the FCC’s July 10, 2015 Declaratory Ruling and Order (FCC 15-72) in the U.S. Court of Appeals for the D.C. Circuit.  The petition challenges the FCC’s treatment of automatic dialing systems, predictive dialers and its definition of prior express consent.  Similar petitions were also filed by Sirius XM Radio and the Professional Association for Customer Engagement (PACE), which filed in the D.C. Circuit and Seventh Circuit, respectively.  These entities are frustrated with longstanding ambiguity that has rendered TCPA compliance challenging and nerve-wracking.  Lacking clear guidance, companies either risk large-scale class action liability, or must steer so far clear of potential wrongdoing that otherwise efficient practices are made onerous and expensive. Apart from these impracticalities, the ACA argues that the FCC has and continues to exceed its Congressionally-delegated authority when it expands the scope of the TCPA beyond its intended target of abusive telemarketers and into the sphere of other industries.ACA Logo Blog

While the TCPA initially contemplated only automated telephone dialing system that could store or produce, as well as dial random or sequential telephone numbers, the FCC recognized beginning in 2003 that the rising tide of technology demanded it regulate a new class of equipment which could be loaded with lists of recipient phone numbers to be dialed automatically without human intervention.  These machines, termed predictive dialers, maximize telemarketers’ efficiency by initiating calls just as the telemarketer becomes available to speak on them. While the machines fell outside of the statutory definition of an ATDS, the FCC deemed their inclusion appropriate because doing so furthered underlying legislative intent: to fetter the degree of access of telemarketing callers to the public. To this end, the FCC emphasized that the main requirement for an ATDS is not the capacity to generate random or sequential numbers, but rather to be able to “dial numbers without human intervention.” In re Rules & Regulations Implementing the TCPA, 18 FCC Rcd. at 14092.; see also Sterk v. Path, Inc., 46 F. Supp. 3d 813, 819 (N.D. Ill. 2014) motion to certify appeal granted, No. 13 CV 2330, 2014 WL 8813657 (N.D. Ill. Aug. 8, 2014).

The question for many telemarketers and their ilk then became how much human intervention would be enough to remove a semi-automated dialing mechanism, or SMS message platform from the TCPA’s purview.   Unfortunately, the July 10th Declaratory Ruling does little to answer that question. The FCC declined to delineate clear contours or compliance guidelines, instead announcing 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 the human intervention, and is therefore a case-by-case determination.” FCC 15-72 at 15.

Absent any useful guidance from the agency, concerned industries will continue to rely on the inconsistent body of case law that discusses machine capacity and human intervention with regards to ATDS status. For instance, in Marks v. Crunch San Diego, the Southern District of California held that an SMS platform was not an ATDS where the relevant human intervention was relatively far removed from the sending of messages from the gym to customers, including when customers volunteered their phone numbers and employees entered them into databases.  55 F. Supp. 3d 1288, 1293 (S.D. Cal. 2014) reconsideration denied, No. 14-CV-348 BAS BLM, 2014 WL 6632810 (S.D. Cal. Nov. 20, 2014). But many other courts have declined to follow this decision, ruling instead that the human intervention must happen during the initiation of the message or phone call; human action which occurs well before that stage will not discount a system’s ATDS status.  See, e.g.,  Sterk v. Path, Inc., 46 F. Supp. 3d 813, 819-20 (N.D. Ill. 2014) motion to certify appeal granted, No. 13 CV 2330, 2014 WL 8813657 (N.D. Ill. Aug. 8, 2014); McKenna v. WhisperText, No. 5:14-CV-00424-PSG, 2015 WL 428728, at *4 (N.D. Cal. Jan. 30, 2015).

The FCC’s recent order also reinforces the longstanding premise that businesses may be liable under the TCPA for using machines that have the present or future capacity to perform completely autodialed call, even if they are not used as such.  The rationale for this policy is that a corporation might avoid liability by flipping a secret capability switch, such that their wrongdoing would be difficult to detect. The ACA and defendants through the years have objected to this provision as overly oppressive, arguing that detection of wrongdoing, however challenging, ought to be an evidentiary burden shouldered by plaintiffs. Wary defendants might be heartened by decisions like that in Legg v. Voice Media Grp., Inc., in which the court declined to find for a plaintiff in the summary judgment phase because he had failed to show that defendant’s broadcasts did not involve human intervention. 20 F. Supp. 3d 1370, 1376 (S.D. Fla. 2014). Even though the messages in question were sent en masse to a database at precise intervals, the court imagined it was possible that defendant “employed individuals to transmit each broadcast at the predetermined time.” Id. It found further that a reference to VMG’s messages as “autodialed” did not address whether the messages were sent using an ATDS within the meaning of the TCPA, and without human intervention. Id. This evinces a greater willingness to impose upon plaintiffs a burden of proof about the actual circumstances under which defendant’s calls are made than some in the industry fear the law commands. Even as the FCC’s rules present growing hurdles for a variety of industries engaged in telephone communication with the public, individual court decisions might give greater consideration to the commercial freedoms of speech and interest in fostering trade served by identifying and permitting legitimate customer communication and marketing practices.

On Friday, July 10, 2015, the Federal Communications Commission (FCC) issued an omnibus, Declaratory Ruling and Order (FCC Ruling) seeking to clarify certain ambiguities in the Telephone Consumer Protection Act (TCPA).  The TCPA was enacted in 1991 with the purpose of protecting consumers’ privacy rights against unwanted robocalls.



Briefly, an individual is liable under the TCPA if they use an autodialer or prerecorded message to make a non-emergency call to a wireless phone without the prior express consent of the consumer.  If the message is telemarketing, the prior express consent for the call must be in writing.  Damages for these violations are mandatory and fixed at $500 per violation (i.e., per call) or $1,500 where the violation was willful.  Because of the potential for draconian damages awards, the TCPA has been boon to plaintiff’s attorneys and class litigation under this statute has exploded in recent years.

Key Rulings & Ramifications

The FCC has the authority to implement rules and issue orders under the TCPA.  Recently, the FCC issued a long-awaited omnibus ruling offering guidance and clarification on a number of issues currently being litigated in the courts.  While many commentators have heralded the FCC’s Order as another blow to businesses, the order actually contains several positives as well.  This post addresses the key takeaways and their positive, as well as negative, ramifications for businesses:

#1: Text messages are “calls” for purposes of the TCPA.  However, the FCC Ruling exempts “on demand” text messages and certain pro-consumer free financial and healthcare related messages from liability, subject to certain conditions and limitations.  For example, text messages alerting a consumer to a fraudulent charge on their bank account or availability of a prescription refill would be exempt, assuming certain additional requirements (such as having an appropriate opt-out mechanism) are met.

This is the first time the FCC explicitly addressed whether text messages were calls, although that conclusion had been reached by the majority of courts.   While expansion of liability under the TCPA is obviously bad for business, the limitations announced by the FCC are a positive and a welcome departure from contrary court precedent.

#2: Technology meets the definition of “autodialer” (and thus capable of being in violation of the TCPA) if the dialing equipment generally has the capacity to store or produce, and dial random or sequential numbers, even if it does not have the present ability to do so.  The capacity of the autodialer is not limited to its current configuration or use at the time of the call, but also includes its potential functionalities.

Given this broad definition, avoiding liability on the basis that the equipment used to make the call does not fall within the scope of the TCPA will be difficult. Accordingly, all businesses placing autodialed or prerecorded calls are encouraged to work with counsel to develop policies for TCPA compliance.

#3:  Application providers, namely those which sell “apps” to consumers which facilitate or provide extra features for calling or texting once downloaded on a smartphone but which are only minimally involved in sending messages are not liable for making unwanted calls.  Third-party retailers that provide software or a platform that facilitates or hosts calling are not per se liable for a violation of the TCPA.  Instead, a totality of the circumstances surrounding the call with be used to determine whether the entity was so involved in making the call as to be deemed to have initiated it.

On balance, this ruling positively changes the dynamic for application providers as it will likely dissuade plaintiffs’ attorneys from filing lawsuits against them because class certification will be more difficult under the totality of the circumstances standard.

#4: Consent for non-telemarketing, non-advertising calls can be demonstrated by the called party giving prior oral or written consent, or by the caller giving their wireless number to the person initiating the autodialed call.   Further, transferring a telephone number from landline to a wireless service does not revoke prior express consent.  A caller can rely on the previous express consent to a residential number, if the consent satisfies the requirements for the same call to a wireless number, after the number is ported to a wireless phone.

This ruling is another positive for businesses, as it reaffirms (at least in the non-telemarketing context) previous FCC Orders which recognize that by providing a business with a wireless number, the consumer has given prior express consent to receive a call. It also removes the potential for liability when a consumer or carrier unilaterally ports a number to wireless service.

#5: Consumers can revoke consent at any time and through “any reasonable means.”  A caller may not limit the manner in which the revocation may occur and the burden is on the caller to prove that it obtained the necessary prior express consent.  By way of example, even if prior consent was obtained in writing, the consumer may revoke consent orally directly in response to a call or at an in-store bill pay location.

The expansion of consumers’ ability to revocate creates additional risk for businesses given that employees may not accurately understand, convey or implement the alleged revocation.  As a best practice, affected businesses should train their employees to adequately recognize and record revocations of consent and work with counsel to develop procedures for quickly implementing that revocation.

#6:  If a called party reassigns their number, a caller is given one free call as an opportunity to gain actual or constructive knowledge of the reassignment, without the risk of violating the TCPA.  The TCPA requires the consent of the party who receives the call, not the intended recipient of the call.  After the one free call, the caller is deemed to have constructive knowledge of the assignment and must cease future calls to the new subscriber.

This one-call exception will make it more difficult for potential plaintiffs to obtain class certification and has the potential to be a powerful defense for to class certification.

We will continue to keep you posted on the application of these new rules by courts, and of the recent lawsuit filed by the Association of Credit Collection Professional, which is challenging various aspects of the order.