On July 6, 2020, the U.S. Supreme Court upheld most of the federal law that prohibits “robocalls” to cell phones but struck down the exception for collection of debts owed to the federal government. (Barr v. American Association of Political Consultants, No. 19–631 (July 6, 2020) (2020 WL 3633780).) Previously, on June 25, a Bureau of the Federal Communications Commission issued some guidance on what constitutes an “autodialer” (or “automatic telephone dialing system“—“ATDS”) relating to that law’s prohibition on text messages. (In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, P2P Alliance Petition for Clarification, CG Docket No. 02-278 (Declaratory Ruling) (June 25 2020).)
Background – the law
In 1991, the Telephone Consumer Protection Act (“TCPA”) became law. Among other things, the law prohibits “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” 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.” 47 U.S.C. §227(b)(1)(A)(iii). The stated purpose was to protect consumers’ privacy.
In 2015, Congress amended the law as part of that year’s budget bill. The amendment added an exception “unless such call is made solely to collect a debt owed to or guaranteed by the United States’ after ‘charged for the call.” The Office of Management and Budget had recommended the amendment, to help the U.S. government collect on mortgages and student loans.
U.S. Supreme Court
A group of political consultants challenged the TCPA’s prohibition as unconstitutional under the First Amendment to the U.S. Constitution, using the 2015 amendment as an example of a unconstitutional restriction of content-based speech. The trial court upheld the debt-collection exception, due to the government’s compelling interest in collecting debt. The appeals court disagreed, struck down the exception, and severed it from the TCPA. Most of the U.S. Supreme Court agreed with the appellate court.
Justice Kavanaugh began the opinion by stating, “Americans passionately disagree about many things. But they are largely united in their disdain for robocalls.” He summarized the section of the original TCPA quoted above as: “In plain English, the TCPA prohibited almost all robocalls to cell phones.” The opinion noted in footnote 1: “The robocall restriction, as implemented by the Federal Communications Commission, bars both automated voice calls and automated text messages.” (citations omitted).
Six Justices agreed that the 2015 debt-collecting amendment was a content-based restriction: “That is about as content-based as it gets. Because the law favors speech made for collecting government debt over political and other speech, the law is a content-based restriction on speech.” Because it was a content-based restriction, these Justices applied a standard of ”strict scrutiny,” which the government conceded the law did not meet. Seven Justices agreed that the 2015 debt-collecting amendment should be stuck down and severed from the TCPA. The remaining Justices would either apply a lower standard of ”intermediate scrutiny,” which they—like the trial court—felt the law could survive as valid. The remaining two Justices would have ruled for the plaintiffs, and struck down the prohibition on robocalls.
The Court noted in footnote 12:
As the Government acknowledges, although our decision means the end of the government-debt exception, no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before the entry of final judgment by the District Court on remand in this case, or such date that the lower courts determine is appropriate. See Reply Brief 24. On the other side of the ledger, our decision today does not negate the liability of parties who made robocalls covered by the robocall restriction.
FCC Bureau – ATDS Guidance
On June 25, the Federal Communications Commission’s (“FCC”) Consumer and Government Affairs Bureau issued a Declaratory Ruling on a different aspect of the TCPA quoted above: what is an “automatic telephone dialing system” (“ATDS” or autodialer”)? The question is particularly relevant to text messages because the TCPA’s prohibition only applies if an ATDS is used. The term has been defined in many different ways.
The FCC’s 2015 Order proposed a definition of which devices for making calls qualify as an “ATDS” as equipment that “has the capacity” to “store or produce telephone numbers to be called, using a random or sequential number generator,” and “to dial such numbers.” The FCC determined that the “capacity” of calling equipment “includes its potential functionalities” or “future possibility”—taking into account possible upgrades or modifications—not only its “present ability.” In other words, any telephone that is not a rotary dial phone would qualify as an ATDS. The D.C. Circuit in 2018, however, set aside this broad definition of ATDS as an “unreasonable, and impermissible, interpretation” of the TCPA because such a construction would include all smartphones (their ability to download applications constituted “capacity”). The court found it “untenable” to construe “capacity” to include the “most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country.”
Courts are continuing to struggle with this definition, and there is a split among the Circuit Courts of Appeal. The Third, Seventh, and Eleventh Circuits use a definition of ATDS/autodialer that requires the device to have the capacity to generate and dial random or sequential telephone numbers at the time of the call. The Second and Ninth Circuits, however, use a broader definition of an ATDS/autodialer: that the device simply has the capacity to dial stored numbers automatically, regardless of how the numbers are generated.
On June 25, the FCC’s Consumer and Government Affairs Bureau offered the following clarification in ¶ 3 of its Declaratory Ruling:
Whether a calling platform or other equipment is used to make calls or send texts to a large volume of telephone numbers is not probative of whether that equipment constitutes an autodialer under the TCPA. Instead, we make clear that if a calling platform is not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions on calls and texts to wireless phones. We further confirm that, even when a party uses an autodialer to send a message, it may still avoid TCPA liability by obtaining the recipient’s prior express consent.
If that was not clear, the Bureau offered this description in ¶ 12: “If a text platform is not capable of storing or producing numbers to be called using a random or sequential number generator and dialing such numbers automatically but instead requires active and affirmative manual dialing, it is not an autodialer and callers using it are, by definition, not “evading” the TCPA.”
Note that this ruling was issued by a Bureau of the FCC, not the full Commission, and so the full FCC may overrule it.