The Federal Communications Commission (FCC) adopted a Declaratory Ruling and Order that resolves 19 petitions for declaratory ruling, one rulemaking petition and one petition for clarification, all arising out of  an upsurge in big-dollar class action litigation under the Telephone Consumer Protection Act (TCPA) and FCC implementing rules.  In addition to gover­ning telemarketing under “do not call” rules, the statute and rules also prohibits autodialed and prerecorded calls and texts to cell phones other than for emergency purposes or with prior express consent, and prerecorded sales calls – or “robocalls” – to all numbers absent prior express written consent.  Compliance is enforced not only by federal and state regulators, but also through a private cause of action that allows up to $1,500 in statutory damages per violation.

The text of the Order has not yet been released – and there may be additional information in the written order – but it is likely it will encourage even more litigation.  As FCC Commissioner O’Rielly said in his statement partially dissenting from the ruling, the petitions arose from a “current state of affairs, where companies must choose between potentially crushing damages … or cease providing valuable communications specifically requested by consumers.”  And as co-Commissioner Pai stated in dissent:  “Many of the decisions just reiterate well-known, settled law,” but “for the decisions that strike new ground, a few are good law” but “most just shift the burden of compliance away from telemarketers and onto legitimate businesses, sometimes in absurd ways.”  Pending release of the full Order, we can report the following based on the Chairman’s Fact Sheet issued three weeks before the Order’s adoption, the News Release announcing the adoption, and statements by FCC members (check back here for our advisory that will analyze the Order upon release):

  • The Order explains that telcos and cell providers may offer subscribers market-based call-blocking services targeting autodialed and/or prerecorded calls, notwithstanding the common carrier obligation to carry and deliver calls without discrimination.
  • The Order reinforces the FCC’s broad definition of what constitutes “automatic telephone dialing systems” or “autodialers” that may not be used to call or text cell phones absent consent or an emergency, and in particular that autodialers include all equipment with the capacity to store or produce random or sequential numbers and to dial them, including that which places calls off of a list of (non-random or sequential) phone numbers. It is unclear how far the written order will go in this regard.
  • The broad autodialer prohibition also is explicitly extended to Internet-to-phone text messages.
  • The Order reaffirms that consumers can revoke previously given consent to receive prerecorded and/or autodialed calls, and may do so in “any reasonable way at any reasonable time.” As one dissenting Commissioner notes, this apparently extends as far as making an in-person request orally to cashiers at a company’s point-of-purchase.
  • Addressing the problem of companies acquiring consent to autodial or prerecorded-call a  phone number, only to find it was later reassigned to a new, non-consenting subscriber (a situation in which courts have tended to impose strict liability on callers), the Order establishes that callers get “one free call” post-reassignment before liability attaches.
  • The Order appears not to offer “one free call” or other relief, however, for circumstances where a company obtains consent associated with a phone number from a consumer who lacks authority, whether due to a typo, pranking, or simply wishing to avoid giving out their true phone number.
  • The Order establishes that a person who is in the contacts list of an acquaintance’s phone does not consent to receive robocalls from third-party applications downloaded by the acquaintance.
  • Mirroring protection afforded to “fax broadcasters” who play little role in creating the content of junk faxes” or the numbers to which they are sent, the Order shelters apps and calling platforms that end-users may deploy to send autodialed calls/texts or prerecorded calls, so long as the app/platform provider does not have a significant role in the content of the call/text or selecting the recipients. (End-users presumably remain liable for deploying such devices to transmit non-compliant calls and/or texts.)
  • The Order grants “very limited and specific exemptions for urgent circumstances” to allow autodialed calls/texts and/or prerecorded calls for certain financial alerts and healthcare messages, provided that (in addition to being urgent, etc.) the call or text is free-to-end-user, allows for an immediate opt-out of future calls/texts, and is not used for marketing, debt-collection or other non-urgent purposes. (It is unclear from the Fact Sheet, News Release, or Commissioner statements whether this will encompass other urgent circumstances such as notifications from utilities, school closures, product recalls, etc.)

Ultimately, in many instances the devil will be in the details of the specific rulings on each of these points (again, check back here for a link to our advisory on the full item).  But in the meantime, it seems fairly clear that, with a few limited exceptions, the hoped-for aid will not be forthcoming for the nearly two dozen petitioners who sought relief from the onslaught of cases targeting legitimate business practices where good-faith attempts at compliance were made.