Is a Sweeping Expansion of Telemarketing Laws Coming?
Enacted in 1991, the federal Telephone Consumer Protection Act (TCPA)—which regulates robo-dialing, text messages, and so-called “junk” faxes—has seen its notoriety rise and fall in the last 30 years. As the basis for nationwide class actions, TCPA liability has led to bet-the-company litigation and resulted in hundreds of millions of dollars in settlements over the last three decades.
A core aspect of the TCPA is its scope: with certain exceptions, the law applies to those individuals and entities who use “automated” means to transmit communications intended to sell products, goods, or services. Specifically, the law requires senders use an “automated telephone dialing system” (ATDS)—commonly referred to as an “autodialer”—to place the subject call/text or send the fax. This term has resulted in widespread uncertainty as to exactly what type of equipment qualifies. And this uncertainty has spawned a multi-circuit split, with the U.S. Supreme Court ultimately having to step in to answer the question in Facebook v. Duguid—adopting a narrow interpretation of an ATDS in April 2021. But the high court left the door open for Congress to step in and re-define what qualifies as an “autodialer.”
Earlier this month, Reps. Raja Krishnamoorthi, D-Illinois, and Katie Porter, D-California, seemingly accepted the U.S. Supreme Court’s invitation when they introduced H.R. 8334—a bill to re-expand the scope of the TCPA. If enacted, this amendment has the potential to return the law to its pre-Facebook days. Factoring in what several states have already done (or are poised to do) with respect to broadening the scope of related state telemarketing laws, the entire telemarketing landscape may very well change once again.
U.S. Supreme Court Narrowly Defines an ATDS
The TCPA currently 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.”
In its seminal Facebook v. Duguid ruling, the U.S. Supreme Court held an ATDS should be narrowly construed (in line with the Third, Seventh and Eleventh circuits) to exclude equipment that dials from preexisting lists of numbers that are not “randomly” or “sequentially” generated. This ruling was in stark contrast to those circuits (like the Second and Ninth) that held the TCPA should instead be interpret broadly to encompass all devices with the “capacity” to automatically dial numbers. Notably, Justice Sonia Sotomayor, writing for the court, explained how plaintiff’s “quarrel is with Congress, which did not define an autodialer as malleably as he would have liked.”
Given the introduction of H.R. 8334, Congress may be poised to take up this “quarrel.”
Enter H.R. 8334
On July 12, Krishnamoorthi and Porter, along with five other supporters, introduced H.R. 8334—dubbed the “Robocall Scam Prevention Act.”
Among other things, the proposed House bill would remove the qualifier “using a random or sequential number generator” from the ATDS definition. It would also include language making it clear the law applies to any equipment that would “automatically dial or send a text message to such numbers.” (As to this latter point, while the Ninth Circuit and other courts recognize the TCPA applies to robotexts, the bill would remove all doubt.)
The legislation would also require that the Federal Communications Commission (FCC)—the agency tasked with interpreting and enforcing the TCPA—conduct rulemaking within 18 months to define terms like “automatically,” “dial” and “send.” According to the bill’s sponsors, such revisions are intended to bring these terms more in line with modern practices and consumer preferences. (For example, text messages did not even exist when the TCPA was passed in 1991).
But the news is not all bad. H.B. 8334 also creates a “safe harbor” for callers who use automated dialers to call/text numbers held by someone who consented to receive the communication if the caller first checked the FCC’s new recycled numbers database and determined the number was reassigned to a new person since consent was provided. While commentators have observed the FCC database could be “helpful,” it is also limited in time/scope and may not reach numbers received years ago.
Takin’ It to the States
Congress is not the only legislative body to consider revising telemarketing laws. In the last year alone, several states have passed their own laws that arguably go beyond the TCPA.
On July 1, 2021, Florida enacted CS/SB 1120, a comprehensive telemarketing law referred to as Florida’s “Mini-TCPA.” This law updates the Florida Consumer Protection Law and Florida Telemarketing Act and uses a definition of “autodialer” that differs from the TCPA. In addition to broadening the type of equipment that falls under its purview, and tightening the consent requirement, the Florida law also created a private right of action allowing Florida residents to sue to recover $500 (or $1,500) per violation plus attorney fees and costs.
Since then, other states have passed (or are considering) similar legislation. For example, lawmakers in Oklahoma passed the Telephone Solicitation Act of 2022; this law mimics Florida’s mini-TCPA by aligning its definition of an autodialer with the broader, pre-Facebook interpretation.
In Washington, legislators are reviewing a bill to amend the state’s Commercial Electronic Mail Act by doubling penalties to $1,000 and providing a private right of action. In addition, the bill would redefine the current definition of an “automatic dialing and announcing device” by making it broader and specifically prohibiting ringless voicemails.
If enacted, H.R. 8334 would expand the ATDS definition to (again) include dialers that automatically call from stored lists. This would send shockwaves through an industry that (finally!) got some closure on the scope of an ATDS last April in Facebook. And while several states have expanded their own definitions of an “autodialier,” the House Bill would easily be the most significant, and sweeping, expansion of telemarking laws in the last 16 months. Only time will tell if this proposal ultimately becomes the law of the land.
“Is a Sweeping Expansion of Telemarketing Laws Coming?,” by Jeffrey N. Rosenthal and Harrison M. Brown, was published in The Legal Intelligencer on July 25, 2022.