United States: Disconnected: The Telephone Consumer Protection Act At 25 Years Old

Last Updated: April 1 2016
Article by Charles E. Harris, II, Howard W. Waltzman and Angela Giancarlo

The Telephone Consumer Protection Act ("TCPA" or "Act") has become fertile ground for plaintiffs seeking to use the prospect of aggregated statutory damages to extract sizable settlements. Further, while as its name suggests, the Act was enacted to protect consumers, it is being enforced in a manner that actually harms consumers by preventing them from receiving important informational telephone calls and text messages from businesses that are concerned with running afoul of the Act. The TCPA has plainly deteriorated into something far afield from its original intent 25 years ago.

To be sure, Congress passed the TCPA in 1991 to combat the proliferation of unsolicited telephone calls by certain groups of telemarketers to consumers, whose numbers were often dialed at random or sequentially using automated dialing equipment.1 For many years, the Act was used for that purpose to regulate and sue rogue telemarketers. It is only more recently that plaintiffs have used the TCPA as a vehicle to bring costly class actions against businesses of all types and, increasingly, where those organizations engaged in communications that Congress probably never intended the Act to prohibit.2

The number of TCPA lawsuits has skyrocketed in the past few years. It is reported that, in 2007, a mere 14 new TCPA lawsuits were filed. Five years later, in 2012, plaintiffs filed 1,102 new TCPA lawsuits. And, since then, the rate of filings has more than tripled, with 3,710 new cases filed in 2015.3 Plus, this upsurge of TCPA litigation has resulted in record-breaking multi-million-dollar settlements over the past few years, some higher than $30 million. Highlighting the significant exposure presented by the Act, in a recent opinion approving a $34 million settlement of a 32-million member TCPA class, a district court acknowledged that a "complete victory" for the class on the merits would be in the range of $16–$48 billion.4

What led to this torrent of litigation? While the Federal Communications Commission (the "FCC" or the "Commission") attributes the surge in litigation to the "skyrocketing growth of mobile phones," the FCC's interpretations of the TCPA in its implementing regulations and declaratory rulings may be the real culprit. As discussed below, interpretations of the Act from the Commission's recent Omnibus Declaratory Ruling and Order (the "2015 Declaratory Ruling") are now the subject of a consolidated appeal pending before the D.C. Circuit, ACA International v. Federal Communications Commission, in which the petitioners raise a number of compelling arguments that certain of those interpretations are unreasonable and should not be accorded deference.

The FCC's Implementation of the TCPA Prior to 2015

The TCPA, with limited exceptions,5 prohibits unsolicited calls to wireless telephones using an automatic telephone dialing system ("ATDS" or "autodialer") or an artificial or prerecorded voice, and to residential landlines using an artificial or prerecorded voice.6 The Act also mandates the creation of national and company-specific "Do Not Call" lists and regulates telemarketing faxes.7 To ensure compliance, the TCPA creates a private right of action. A plaintiff can recover $500 in statutory damages for each violation of the Act and $1,500 in damages for a willful or knowing violation.8

Congress granted the Commission authority to prescribe regulations to implement the requirements of the TCPA.9 The FCC's initial implementing regulations largely tracked the TCPA and were not the subject of much discussion.10 But the Commission's more recent interpretations of the TCPA's statutory terms have garnered significant interest, particularly from businesses that the interpretations could affect, such as those that communicate with customers by voice calls and text messages.11 Three such interpretations prior to 2015, which are discussed below, concerned the definition of an ATDS, whether the term "call" includes text messages, and what constitutes the requisite "consent" to receive autodialed, artificial or prerecorded calls.


The TCPA defines an ATDS as "equipment which has the capacity" to "store or produce telephone numbers to be called, using a random or sequential number generator" and "to dial such numbers."12 The FCC first considered the scope of the term "capacity" in 2003 when asked whether a "predictive dialer" fell within the statutory definition of ATDS.13 Although telemarketers had traditionally used telephone dialing equipment that randomly or sequentially generated and dialed phone numbers, predictive dialers utilize stored preprogrammed numbers or numbers sent from computer software, and they enable callers to anticipate when a person will likely answer a call. The FCC found that predictive dialers were ATDSs, stating that "in order to be considered an '[ATDS],'" the equipment need only have the "capacity to store or produce telephone numbers."14 So, in effect, the FCC redefined an ATDS and arguably made the definition broader by eliminating the requirement that the equipment have the capacity to store or produce telephone numbers to be called "using a random or sequential number generator."

In any event, in 2008, the Commission reaffirmed that a predictive dialer is an ATDS, reasoning that "the basic function of such dialing equipment, had not changed—[they have] the capacity to dial numbers without human intervention" and thus fall under the statutory definition of an ATDS.15 The FCC's inclusion of the "without human intervention" concept was completely novel and not based on any text in the TCPA.


The plain language of the TCPA prohibits certain types of "call[s]" but does not address text messages, which is unsurprising given that the Act was enacted long before text messaging became popular. In 2003, however, the FCC determined for the first time that "both voice calls and text calls to wireless numbers constitute prohibited calls under the [TCPA]."16 In a 2004 ruling pertaining to the CAN-SPAM Act, the FCC reaffirmed that the "prohibition on using [ATDSs] to make calls to wireless phone numbers applies to text messages (e.g., phone-to-phone SMS), as well as voice calls."17 This interpretation of the TCPA significantly expanded the scope of the type of "calls" that would be prohibited under the TCPA.


Neither the text of the TCPA nor its legislative history addresses the form by which prior express consent for calls is established or revoked. In 1992, the FCC recognized that consumers "who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given,"18 and the FCC applied this principle in a 2008 Declaratory Ruling in which it found that the provision of a cell phone number to a creditor reasonably evidences consent by the cell phone subscriber to be contacted at that number regarding the debt.19

Otherwise, prior to 2015, the FCC "[left] it to the caller to determine, when making an autodialed or prerecorded non-telemarketing call to a wireless number, whether to rely on oral or written consent in complying with the statutory consent requirement"20 and refrained from addressing the issue of revoking consent for non-telemarketing calls. In 2012, the Commission established a new regime for telemarketing calls, requiring, among other things, that callers receive "prior express written consent" for these calls to "wireless numbers and residential lines" by physical or electronic signature and that the calls include an opt-out mechanism so that a consumer can easily revoke that consent.21


Twenty-one parties petitioned the FCC to clarify or revise some of its interpretations discussed above, as well as other ambiguities that had been seized upon by plaintiffs as the basis for liability under the TCPA. On July 10, 2015, a divided Commission issued the 2015 Declaratory Ruling to resolve those petitions.22 In the ruling, the Commission purported to clarify its definition of an ATDS and its view on liability for wrong-number calls placed to reassigned wireless numbers, and it attempted to create a regime for revoking consent to receive non-telemarketing calls. Despite the FCC's efforts, its ruling created more uncertainty and raised concerns about new and impractical compliance obligations. Accordingly, all three of the described issues are the subject of the pending challenge in the D.C. Circuit.23


In many TCPA lawsuits, plaintiffs assert that equipment that literally cannot dial random or sequential numbers nonetheless qualifies as an ATDS, because it theoretically could be reconfigured to do so. Under the FCC's refined definition in the 2015 Declaratory Ruling, an ATDS is a device that has the "capacity" to generate random or sequential numbers and dial such numbers automatically so long as it has the "potential ability" to do so, either innately or through hardware or software modifications.24 In their appeal of the ruling, the petitioners argue, among other things, that, contrary to the Commission's interpretation, equipment must have the "present ability" to generate random or sequential numbers and to dial such numbers automatically in order to be considered an ATDS under the text of the TCPA.

In particular, the petitioners contend that the Commission's interpretation of an ATDS is unreasonable and lacks meaningful limiting principles.25 Relying heavily on the statements filed by the dissenting members of the FCC, they argue that the "potential functionalities" test proposed by the FCC might cover "pretty much any calling device or software-enable featured," including smartphones, tablets and VoIP telephones, because it is "trivial to download an app, update software, or write a few lines of codes that would modify the device's software to dial random or sequential numbers." To emphasize this point, the petitioners quipped that the test is so expansive, the FCC had "to use a rotary phone as an example of a technology that would be not be covered" under the TCPA.26 They maintain that the text of the TCPA and the context in which the term "capacity" is used in the Act indicate that Congress intended that the question of whether or not equipment is an ATDS be determined by considering what the equipment can do in its present and unmodified state.27 Indeed, this seems to be the only reasonable interpretation of the Act.


Another issue of increasing importance in TCPA cases is the treatment of wrong-number calls, where the business places a call trying to reach an individual who has consented to receive the call only to reach someone else entirely, either because the phone number had been reassigned or misidentified by the initial consumer. The most natural reading of the Act is that the "intended recipient" is the party whose consent must be obtained to place a call, as it is impossible to know in advance who actually might answer any given call. Nonetheless, in its 2015 Declaratory Ruling, the Commission decided that the TCPA prohibits autodialed calls "to reassigned wireless numbers when the current subscriber to or customary user of the number has not consented, subject to a limited, one-call exception for cases in which the caller does not have actual or constructive knowledge of the reassignment."28

In the challenge to the 2015 Declaratory Ruling, the petitioners urge the D.C. Circuit to require the FCC to adopt an "expected recipient" definition for a called party to avoid liability based on a transferred mobile phone number that could not have been discovered before the call.29 The petitioners also point out that the Commission's "one free call" exception is insufficient, because the caller cannot "discover that the subscriber has changed before the first call" and "might not learn of the reassignment during the call because, as the Commission . . . recognized, 'a single call to a reassigned number will [not] always be sufficient for callers to gain actual knowledge of the reassignment'"— especially when that first call is not answered.30 More fundamentally, the FCC's one-free-bite rule has no mooring in the statutory text; the very fact that the FCC was compelled to create this exception from whole cloth suggests that its interpretation is not one that Congress intended.


A third issue that had been the subject of considerable controversy in TCPA cases is whether individuals who have consented to receive autodialed non-telemarketing or informational calls may retract their consent and, if so, whether contractual provisions that specify how consent may be rescinded (e.g., by calling a certain number) are enforceable.

In its 2015 Declaratory Ruling, the FCC concluded that a consumer's prior express consent may be revoked through any means that is "reasonable" under the "totality of facts and circumstances" and that the callers and consumers may not agree to a more limited means of revocation.31 The petitioners have argued to the D.C. Circuit that this approach is unworkable because the "degree of individualization" created by the Commission's proposed regime is "impracticable and deprives callers of the ability to craft efficient and reliable mechanisms for receiving and processing revocations."32

One problem with this regime (or the lack thereof) is that businesses cannot effectively determine in advance whether a customer's interaction with a particular employee will later be considered a "reasonable" medium for revoking consent. For instance, customers theoretically "could tell the pizza-delivery guy that they no longer wish to receive promotional text," or they could "tell their cable installer that they no longer want to receive informational calls about outages."33 Treating these informal interactions as proper revocation would present a major problem for most businesses because they "typically train only particular customer service agents to deal with revocation of consent," not every employee who interacts with customers in some manner.

What Is Next for Businesses?

Briefing in the appeal ended on February 24, 2016, and the oral argument should be scheduled shortly. If the D.C. Circuit rules for the petitioners, either in whole or in part, barring a petition for Supreme Court review, the FCC will be sent back to the drawing board on implementing regulations regarding the issues raised in the appeal. If, on the other hand, the D.C. Circuit (or the Supreme Court) determines that the interpretations of the TCPA reflected in the 2015 Declaratory Ruling are permissible constructions of the Act, affected businesses may want to reevaluate their TCPA compliance practices. In the meantime, businesses currently litigating TCPA cases involving issues raised in the appeal might consider seeking a stay pending a ruling on the appeal. At the very least, businesses targeted by TCPA lawsuits in which the plaintiffs seek to impose liability on the basis of the FCC's positions in the 2015 Declaratory Ruling should be sure to preserve challenges to those positions.


1 Pub. L. No. 102-243, 105 Stat. 2394, § 2 (Dec. 20, 1991).

2 See S. Rep. No. 102-178 (1991)

3 Webrecon LLC, Debt Collection Litigation & CFPB Complaint Statistics, Dec 2015 & Year in Review, available at https://dev.webrecon.com/out-like-a-lion-debt-collection-litigation-cfpb-complaint-statistics-dec-2015-year-in-review/ (last visited Feb. 8, 2016).

4 Gehrich v. Chase Bank USA, 12 C 5510, 2016 WL 806549, slip op. at *7 (N.D. Ill. Mar. 2, 2016)

5 Most notably in the health care context. See 47 U.S.C. § 227(b)(2); 47 C.F.R. § 64.1200(a)(2) (effective Oct. 16, 2013).

6 47 U.S.C. § 227(b)(1)(A)(iii).

7 47 U.S.C. § 227(b)(1)(C) (junk faxes); 47 C.F.R. § 64.1200 (Do-Not-Call Registry).

8 Id. § 227(b)(3).

9 Id. § 227(b)(2).

10 Id. § 64.1200(f)(1). For instance, the implementing regulations stated that "[n]o person may" "[i]nitiate any [non-emergency] telephone call . . . using an [ATDS] or artificial or prerecorded voice," without prior express consent, to a wireless telephone. And they define the terms "ATDS" and "autodialer" as "equipment which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers."

11 E.g., Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, 30 FCC Rcd. 7961, 7970 ¶ 9 ("2015 Declaratory Ruling").

12 Id. § 227(a)(1). Generally, "[a]n agency's interpretation of a statute it administers commands deference, regardless of whether it emerges as a result of an adjudicative proceedings or a rulemaking process." City of Chicago v. F.C.C., 199 F.3d 424, 429 (7th Cir. 1999).

13 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14091-93, ¶¶ 131-33 (2003) ("2003 Report and Order").

14 Id. at 14092-93, ¶ 133 (emphasis added).

15 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling, 23 FCC Rcd. 559, 566 ¶ 13 (2008) ("2008 Declaratory Ruling").

16 2003 Report and Order at 14115 ¶ 165 (emphasis added).

17 Rules and Regulations Implementing the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003; Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 19 FCC Rcd. 15927, 15933-34 (2004) (emphasis added).

18 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 7 FCC Rcd. 8753, 8769 ¶ 31 (1992).

19 2008 Declaratory Ruling at 564 ¶ 9 (2008).

20 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 27 FCC Rcd. 1830, 1842 ¶ 29 (2012) (emphasis added).

21 Id. at 1837 ¶ 18 (emphasis added).

22 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, 30 FCC Rcd. 7961 (2015) ("2015 Declaratory Ruling").

23 No. 15-1211 (D.C. Cir.).

24 2015 Declaratory Ruling at 7976 ¶ 19 (emphasis added).

25 Petitioners' Br. §§ I.A-B (quoting 2015 Declaratory Ruling at 8075 (Pai, Dissenting)).

26 Id. at 24.

27 Id. at 22-25.

28 2015 Declaratory Ruling at 7966.

29 Petitioners' Br. § II.A.1.

30 Id. at 52 (quoting 2015 Declaratory Ruling at 8010, n. 312).

31 2015 Declaratory Ruling at 7994 ¶ 55, 7997, n. 233.

32 Id. at 56-57.

33 Id.

Originally published 28 March 2016

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