FCC, Debt Collectors to Face Off Over Robocall Challenge

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By Kyle Daly

Oct. 17 — A challenge to the Federal Communications Commission's 2015 effort to tighten restrictions on robocalls will be aired in an Oct. 19 oral argument before a federal appeals court ( ACA Int'l v. FCC, D.C. Cir., 15-01211, scheduling note 7/25/16 ).

Lawyers for the FCC and ACA International, a trade group that represents third-party debt collection companies, will face off before the U.S. Court of Appeals for the District of Columbia Circuit. ACA contends the FCC went beyond Congress's intended definition of an automatic dialing system when it approved new rules in a 2015 order governing companies' use of such autodialers.

The order expanded the FCC's definition of autodialers to include any equipment with the capacity to dial random or sequential numbers, regardless of whether it is used for that purpose. That definition means any company using a more advanced device than a rotary phone to contact consumers could theoretically open itself to consumer complaints, lawsuits or FCC enforcement actions. A loss for the FCC at the D.C. Circuit would likely require the agency to come back with less restrictive rules and could cast uncertainty around subsequent robocall rules the FCC has adopted.

In addition to redefining what qualifies as an autodialer, the FCC's 2015 Telephone Consumer Protection Act (TCPA) order gave consumers the right to revoke their consent to receive robocalls or text messages and said companies would have just one chance to stop calling or texting a reassigned number before becoming liable for fines, among other provisions. Groups and companies objecting to the order say it opens them up to greater liability and chances to be fined for using certain equipment to make calls or trying to find the right number for a given consumer.

Sirius XM Holdings Inc., wireless industry trade group CTIA – The Wireless Association and tech trade group the Internet Association were among the entities filing amicus briefs supporting ACA or joining the case as petitioner intervenors. (2016 TLN ???, 11/1/16)

Each side will get 20 minutes to present their arguments. Five minutes on the plaintiff side will be for a lawyer representing Rite Aid to address the health care implications of the order. The company contends the FCC should have clarified that the rules don't apply to companies trying to reach patients with information related to their health.

Win or lose, the FCC is likely to come away from the case with the court ordering it to offer more clarity on just what counts as an autodialer, David O.Klein, managing partner at marketing law firm Klein Moynihan Turco in New York, told Bloomberg BNA. Klein’s firm represents companies that have been hit with lawsuits alleging TCPA violations.

“I don’t think the directive or the goal is to outlaw telemarketing entirely, [but to] bring it up to 2016 technology,” he said.

Handicapping a Decision

Judges Sri Srinivasan, Cornelia Pillard and Harry Edwards will hear the case. In a filing earlier this year, the FCC defended the 2015 order on the basis of Chevron deference, maintaining that the rules fell within its mandate to appropriately interpret and apply the TCPA (2016 TLN 9, 2/1/16). That principle stems from a landmark 1984 decision ( Chevron U. S. A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), in which the U.S. U.S. Supreme Court said that deference should be granted by the courts to an agency's own interpretation of the statutes it administers, unless the interpretation is unreasonable.

Srinivasan has historically been sympathetic to the FCC's use of the Chevron doctrine, relying on it in recent decisions upholding the FCC's net neutrality rules and spectrum incentive auction structure. Pillard wasn't involved in either of those cases but did side with Srinivasan and the FCC in a 2015 net neutrality challenge seeking a stay to stop the rules from taking effect.

Edwards has taken a more mixed view. He defended the FCC's assertion of authority, for instance, in a 2013 case involving encoding technologies that block consumers from recording TV content. But that same year, he slammed the FCC for what he said was overreach in a case in which the agency tried to force Comcast Corp. to carry the Tennis Channel under the same terms it carried its own sports networks.

The agency has subsequently issued more robocall orders giving the government and federal contractors immunity from TCPA liability (2016 TLN 14, 8/1/16); placing unique restrictions on robocalls made to collect student loan and mortgage debts owed to the government (2016 TLN 12, 9/1/16) and exempting schools and utilities from robocall restrictions in the event of an emergency (2016 TLN 20, 9/1/16). Should the court remand the 2015 order back to the FCC for retooling, there will likely be “fallout” for those subsequent orders, Klein said, requiring the agency to provide more specifics on just how any exceptions would apply.

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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