2015 saw a continued wave of class-action filings under the Telephone Consumer Protection Act (TCPA). However, unsettled law continues to place a compliance burden on companies that communicate with consumers by phone or text.
The Federal Communications Commission (FCC) captured headlines with the release of an omnibus declaratory order in July 2015, purporting to clarify uncertain rules but leaving many issues as uncertain as ever. And the order is now facing a legal challenge in a federal appellate court.
The six hot issues identified below set the stage for the TCPA in the coming year.
1. Will the FCC’s Omnibus Order Survive Legal Challenge?
More than a dozen parties have filed appeals challenging the FCC’s July 10, 2015, TCPA declaratory ruling and order. The pending appeals, which have been consolidated before the U.S. Court of Appeals for the D.C. Circuit, have been filed by a wide range of business interests challenging various aspects of the FCC’s order, including (1) the problem of reassigned cell phone numbers; (2) the definition of autodialer; (3) the standards for consent and revocation; and (4) issues unique to financial institutions and healthcare providers.
2. The Definition of “Autodialer”
Recent decisions demonstrate that courts struggle to apply this term to the facts of particular cases. The FCC’s order failed to provide meaningful guidance on what equipment would not constitute an autodialer, other than to offer the unhelpful truism that a rotary dial phone is not an autodialer. The uncertainty over the definition of autodialer affects the scope of the TCPA and makes it difficult for businesses using automated communications to ensure compliance and manage litigation risk.
3. The Supreme Court’s Impact on TCPA Class Actions
In January 2016, the U.S. Supreme Court held in Campbell-Ewald v. Gomez, 135 S. Ct. 2311—a TCPA class action—that an offer of judgment that would fully compensate the named plaintiff (and putative class representative) does not moot the class action. The Court left open, however, the question of whether a tender of actual payment might have a different effect. In Robins v. Spokeo, 135 S. Ct. 1892, the Supreme Court will resolve the issue of whether a plaintiff who alleges a statutory violation but who fails to allege a concrete injury in fact has standing to pursue allegations based on a breach of that statute.
4. Direct and Vicarious Liability Issues
The standard for third-party liability under the TCPA is a critical issue for any company that communicates with customers or potential customers using agents, third-party vendors, franchisees, or other multi-party arrangements. For unsolicited calls and texts, the plain language of the TCPA assigns direct liability to the party actually making or initiating the call, and a number of court decisions have applied vicarious-liability principles to other parties involved in the communications. For unsolicited fax transmissions, several courts have held that an advertisement sent on behalf of a company whose services are advertised may in some circumstances lead to direct liability of the company under the TCPA, even if the company did not send the fax itself.
5. Will the FCC Resolve Issues Not Addressed by the July 2015 Order?
The FCC’s 2015 omnibus order addressed a wide range of issues, but other questions remain unanswered. Will the FCC clarify the standards for certain calls made by energy utilities? Will the special rules defined for financial services and healthcare companies be extended to other industry segments? Will the FCC continue to grant exemptions from liability for solicited fax advertisements sent before April 2015 without an opt-out notice?
6. Will Congress Stem the Tide of Runaway Class Action Liability?
In 2015, Congress created an exception from TCPA liability for collection calls for federally insured student loans. Will Congress consider addressing the disproportionate class-action risk posed by the TCPA?
With the wave of TCPA litigation expected to continue in 2016, the developments in these key areas, among others, will shape the TCPA landscape. With many different industries being targeted by class-action plaintiffs’ lawyers, a strong TCPA compliance program is essential to help avoid TCPA lawsuits and potential liability.