DC Circuit Hands Telemarketers a Victory on Robocalls

WASHINGTON (CN) – Not every smartphone should be considered a device capable of making robocalls, the D.C. Circuit ruled Friday, marking a victory for the telemarketing and debt collection industry.

The ruling, written by U.S. Circuit Judge Srikanth Srinivasan, reversed an Obama-era Federal Communications Commission policy once touted by former chairman Tom Wheeler as a rule which put consumers before companies and ensured that “those who inherit a phone number would not be subject to a barrage of unwanted robocalls OK’d by the previous owner of that number.”

That policy also stipulated that companies autodialing reassigned numbers were effectively violating the Telephone Consumer Protection Act, or TCPA.

But that was an overreach, according to Srinivasan and placed too much burden on companies which were effectively held liable for unwittingly making calls to numbers that had been previously reassigned.

ACA International, an industry trade group representing debt collection agencies, argued they needed a “safe harbor” to protect them from inadvertently breaking the TCPA as a result of the 2015 policy.

The court agreed, unanimously.

The ruling also reversed the FCC’s definition of capacity around devices which are capable of autodialing. A smartphone that could be programmed to randomly generate numbers and autodial, or could be equipped with a downloadable app that could achieve that same purpose, was too expansive.

“If every smartphone qualifies as an [autodialer device,] the statute’s restrictions on autodialer calls assumes an eye-popping sweep,” the ruling states.

FCC Commissioner Ajit Pai, who replaced Wheeler after President Donald Trump took office, celebrated the decision Friday.

Pai said in a statement the decision finally addressed the previous administration’s “disregard for law and regulatory overreach.”

“As the court explains, the agency’s 2015 ruling placed every American consumer with a smartphone at substantial risk of violating federal law.  That’s why I dissented from the FCC’s misguided decision and am pleased that the D.C. Circuit too has rejected it,” Pai said.

Fellow FCC commissioner Jessica Rosenworcel, who voted in favor of the 2015 rule, didn’t agree.

“Robocalls are already out of control,” Rosenworcel said Friday. “One thing is clear in the wake of today’s court decision: robocalls calls will continue to increase unless the FCC does something about it.”

Like Pai, who said Friday that the policy worked like a “regulatory dragnet,” Judge Srinavasan found the reach of the statute “becomes especially pronounced upon recognizing that an uninvited call or message from a smartphone violates the statute even if an autodialer feature was not used to make the call or send the message,” the ruling states.

Each autodialing violation comes with a $500 minimum penalty in damages for each individual recipient of each prohibited call or message.

“Imagine, for instance, that a person wishes to send an invitation for a social gathering to a person she recently met for the first time. If she lacks prior express consent to send the invitation, and if she obtains the acquaintance’s cell phone number from a mutual friend, she ostensibly commits a violation of federal law by calling or sending a text message from her smartphone to extend the invite,” Srinvasan wrote.

The ruling comes just a week before the FCC is scheduled to vote on advancing its second notice of proposed rulemaking reducing unwanted calls to reassigned phone numbers.

The meeting is scheduled for March 22. During the meeting, commissioners will also weigh how the telemarketing industry’s accesses and rights to phone number data and whether or not that information should be reported to the FCC or to an outside, commercial entity.

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