Telephone Consumer Protection Act

The world of Telephone Consumer Protection Act (TCPA) litigation is constantly changing. With this evolution, new issues arise on almost a daily basis, challenging those prosecuting and defending these claims. A recent and increasingly litigated issue that both Plaintiff's and Defense counsel agree will likely serve as the next battleground of TCPA litigation is whether calls are made using an Automatic Telephone Dialing System, and particularly:

(1) What constitutes "capacity" as the term is used in the TCPA; and

(2) The level of human intervention necessary to remove a call from the scope of TCPA liability.

Brief Overview of the TCPA

The Telephone Consumer Protection Act,was enacted in 1991 to protect privacy interests. It provides for injunctive relief, as well as the greater recovery of actual damages or a $500 per call statutory penalty. The TCPA also vests trial courts with discretion to treble damages when violations are willful or knowing. Thus, for example, where statutory damages are ultimately claimed (which is generally the case), defendants face exposure of up to $1,500 per call if they are deemed to have willfully or knowingly violated the TCPA. Notably, even unwitting violations of the Act can create exposure reaching into the hundreds of millions of dollars. For example, in 2011, the U.S. Court of Appeals for the Seventh Circuit recognized the monetary significance of class certification in a case as ranging from between $250 million ($500 per alleged violation) to $750 million ($1,500 per violation).

Most lawsuits involving the TCPA place at issue its prohibition against calls to cellular telephones using artificial and prerecorded voices or Automatic Telephone Dialing Systems without prior express consent of the called party. The TCPA defines an "Automatic Telephone Dialing System" (ATDS) as equipment that has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator to dial the numbers. Over the years, the Federal Communications Commission (FCC) has issued various Declaratory Rulings addressing what constitutes an ATDS, the most recent of which occurred on June 18, 2015, in a ruling that was released July 10, 2015 (the 2015 Declaratory Ruling or the Ruling).

The 2015 Declaratory Ruling as it Relates to What Constitutes an Automatic Telephone Dialing System

The 2015 Declaratory Ruling addressed 21 Petitions and spoke on various topics, including:

(1) What constitutes "capacity" as the term is used in the TCPA; and

(2) The significance of "human intervention" when determining whether calls are made using an ATDS.

Purporting to rely on previous Rulings, the sharply divided 3-2 2015 Declaratory Ruling stated that the term "capacity" as used in the TCPA includes equipment that does not have the "present ability" to dial randomly or sequentially but refused to explain exactly what this means.While the Ruling did acknowledge "outer limits to the capacity of equipment to be an autodialer," it simply proclaimed that "there must be more than a theoretical potential that [ ] equipment could be modified to satisfy the 'autodialer definition,'" stating that while a rotary dial phone can theoretically be modified to such an extreme to be deemed an "auto dialer," "such a possibility is too attenuated" to satisfy the requirements of capacity.

These statements drew sharp criticism including from dissenting Commissioner Ajit Pai. Commissioner Pai's disagreement is perhaps best encapsulated in the following illustration set forth in his dissent:

No one would say that a one-gallon bucket has the "potential or suitability for holding, storing or accommodating" two gallons of water just because it could be modified to hold two gallons. Nor would anyone argue that Lambeau Field in Green Bay, Wisconsin, which can seat 80,000 people, has the capacity (,i.e., the "potential suitability") to seat 104,000 Green Bay residents just because it could be modified to have that much seating. The question of a things' capacity is whether it can do something presently, not whether it could be modified to do something later.

While the Declaratory Ruling spoke to the issue of "capacity," it demurred when asked to adopt a bright line rule regarding the level of human intervention necessary to remove calls from the scope of TCPA liability, simply "clarifying that a dialer is not an autodialer unless it has the capacity to dial numbers without human intervention," adding that:

The basic functions of an autodialer are to "dial numbers without human intervention" and to "dial thousands of numbers in a short period of time." How the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.

If anything, these statements regarding the human intervention element create more confusion than guidance as noted by FCC Commissioner Michael O'Rielly in his partial dissent to the Ruling:

the Commission previously clarified that to be considered "automatic", an autodialer must function "without human intervention". Therefore, it should be clear that non-de minimis human intervention would disqualify it from being an autodialer. This is important because there is litigation around the country regarding the level of human intervention. Yet the order refuses to provide any additional clarity, claiming that this must be done through a case-by-case determination. In fact, the order increases confusion by implying that calls that are manually dialed from equipment that could be used as an autodialer would still count as autodialed calls because the equipment has the potential to be an autodialer -- even though the calls would not have been made absent that human intervention (i.e., the manual dialing).

Not surprisingly, various appeals of the 2015 Declaratory Ruling have been filed. During the little more than a year since the Ruling, and while these appeals remain pending, federal district courts have been called upon to address the issues of what constitutes an ATDS, and particularly the issues of "capacity," and "human intervention."