Reed Smith Client Alerts

On Friday, July 24, the United States Judicial Panel on Multidistrict Litigation issued an Order consolidating in the D.C. Circuit Court of Appeals three timely petitions for review of a July 10, 2015 Declaratory Ruling and Order of the Federal Communications Commission (FCC). That Order resolved 21 petitions for declaratory ruling, proposed rulemaking and clarification relating to a number of purported ambiguities in the Telephone Consumer Protection Act (TCPA). See July 13, 2015 Reed Smith Client Alert: "FCC Issues Omnibus Ruling on Host of Issues Affecting TCPA Litigation and Compliance” and June 19, 2015 Reed Smith Client Alert: “FCC Finally Acts to Clarify Ambiguities in the TCPA.

Two of the three entities that filed petitions for review of the FCC’s TCPA Order had earlier filed declaratory or rulemaking petitions with the FCC, but those petitions were denied and now they seek to have the FCC’s Order reversed. The issues raised by those entities in their requests for review appear below.

The Professional Association for Customer Engagement (PACE) originally filed its appeal petition in the Seventh Circuit, asking that the appellate court review the FCC’s Order, which PACE states “vastly expands the TCPA’s reach by sweeping in calls to wireless numbers made from equipment that lacks the present capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator,’ and ‘to dial such numbers.’” PACE also questions the FCC’s definition of the term “called party,” for purposes of the TCPA’s consent provisions, as the “current subscriber (or non-subscriber customary user of the phone)” rather than the “intended recipient” of the call. Lastly, PACE objects to the FCC giving callers only one call, regardless of whether the recipient answers the phone, before holding them liable for calls made to telephone numbers that have been reassigned without the callers’ knowledge.

ACA International originally filed its appeal in the U.S. Court of Appeals for the District of Columbia Circuit. While it too questions the FCC’s treatment of the term “capacity” in the TCPA’s definition of an automatic telephone dialing system, ACA also specifically challenges the Commission’s treatment of predictive dialers. Further, ACA questions the FCC’s handling of “prior express consent,” including, but apparently not limited to, in the case of reassigned telephone numbers, and asks that the Court order the FCC either to change its definition of “called party” or establish a viable safe harbor.

Finally, Sirius XM Radio Inc., which also petitioned for review in the District of Columbia Circuit, raises issues virtually identical to those raised by PACE in its petition. Indeed, it is apparent that all three entities worked together in drafting some aspects of their papers, including a footnote regarding the proper time for filing (which will have implications for the proper standard on review) that appears verbatim in all three petitions and indicates that they all appear to have been filed on the same day.

All the petitions contend that the FCC’s order is arbitrary and capricious, an abuse of discretion, in excess of the FCC’s statutory authority, and “otherwise contrary to the Constitution and other laws.” Time will tell what standard is ultimately applied by the Court of Appeals in reviewing the FCC’s Order which, in turn, will depend on whether or not the FCC’s Order is treated as having resulted from a Notice and Comment Rulemaking Proceeding. Presumably, the petitioners also will seek a stay of the FCC’s Order pending the outcome of the consolidated appeal. Any party adversely affected by the Commission’s Order should seriously consider submitting an amicus brief to the D.C. Court of Appeals, on its own or with others similarly situated.


Client Alert 2015-214