On October 3, the Federal Communications Commission (FCC) released a Public Notice[1] seeking comment on the meaning of an “automatic telephone dialing system” or “autodialer” under the Telephone Consumer Protection Act (TCPA). The FCC’s move comes in the wake of a recent ruling by the U.S. Court of Appeals for the Ninth Circuit broadly construing the term, and effectively expanding the scope of the TCPA. The Ninth Circuit’s decision marked a split with other circuits that have considered the issue, which creates uncertainty for any businesses that send automatic text messages or calls. The FCC now requests public comment on several issues raised in the Ninth Circuit’s decision, including whether the statutory language of the TCPA is ambiguous, and which types of devices qualify as an autodialer under a proper reading of the statute.

Two weeks earlier, the Ninth Circuit reached its long-awaited decision in Marks v. Crunch Fitness, an appeal from a dismissed lawsuit against Crunch Fitness alleging violations of the TCPA. In filing the suit, the plaintiff Jordan Marks alleged that he had received three unwanted text messages from Crunch without his consent. The lawsuit also alleged that Crunch’s use of a third-party SMS marketing platform violated the TCPA by using an autodialer to send the messages.

Although the district court determined the SMS marketing platform used by Crunch was not an autodialer under the TCPA, on September 20th the Ninth Circuit disagreed and vacated the decision. The Marks court also held that an autodialer under the TCPA could include any device that automatically calls or texts phone numbers from a stored list of phone numbers.[2] This broad interpretation expands the applicability of the TCPA, and puts many businesses located within the Ninth Circuit’s jurisdiction at risk of substantial fines—between $500 and $1,500 for every message or call—for failing to gain affirmative consent from recipients.

The Ninth Circuit’s ruling stands in stark contrast to the recent trend away from a broad application of the TCPA to modern technology.  The decision also signals a clear split from the narrow interpretations of an autodialer announced by the Third Circuit[3]  and D.C. Circuit[4] earlier this year. While the FCC has the power to overrule the Ninth Circuit’s interpretation, for now the ruling is legally binding precedent throughout the Ninth Circuit. This circuit split may also spark future interest from the Supreme Court, which could weigh in to push the broad interpretation of the TCPA on businesses across the country.

What are the important takeaways for businesses using this technology?

  • Businesses will need to gain express consent for nearly any automated customer contact via phone call or text message. The consent should be documented.
  • If using autodialer technology without documented consent, businesses will have to consider halting related promotional campaigns, or run the risk of large monetary penalties.
  • For those outside of the Ninth Circuit’s jurisdiction, businesses should understand that the ruling offers an early warning that the TCPA is far from settled law, and could still have teeth in the future.
  • There is still time to voice an opinion on this matter. The FCC is actively soliciting comments by October 17, 2018, with reply comments due by October 24, 2018.

Notwithstanding the Marks decision, the FCC’s request for comment signals its interest in intervening on the autodialer issue.  Although no specific timeframe for any FCC rulemaking exists, if the FCC issues new rules as expected, there could be another shift of the TCPA landscape across the country. For now, businesses must consider the potential risks associated with TCPA noncompliance, and plan their automatic messaging or calling campaigns accordingly.

[1]DA/FCC # DA-18-1014, available at https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2018/10/DA-18-1014A1.pdf

[2] Marks v. Crunch San Diego, LLC, No. 14-56834 (9th Cir. 2018)

[3] Dominguez ex. rel. Himself v. Yahoo, Inc., 894 F. 3d 116, 120 (3d Cir. 2018)

[4] ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018)