The Future of the TCPA After ACA International v The Future of the TCPA After ACA International v. FCC NCHER Annual Conference Charleston, South Carolina June 4-6, 2018 Gregg D. Stevens McGlinchey Stafford

Student Loan Exemption No real exemption FCC Released Final Rules 3 attempts per 30 days Per Account not per loan Currently owed to or guaranteed by Federal Government What does that mean?

Student Loan Exemption No marketing on calls Solely for purpose of collecting debt Can tell borrower about deadlines Reassigned number problem Problem-Lots of alternatives available for borrowers How do you reach borrower without violating statute? Manually dial?

Petition for Reconsideration Petition for Reconsideration filed by Great Lakes Higher Education Corp, Navient and others. Response Comments filed by NCHER.

FCC’s July 10, 2015 TCPA Ruling Issued in response to numerous petitions by industry to clarify several provisions of the TCPA, including: Definition of “automatic telephone dialing system” Whether revocation of consent is allowed under the TCPA Whether liability results from calls to a reassigned number

FCC’s July 10, 2015 TCPA Ruling ATDS: dialing equipment (including predictive dialers) that has “capacity” to store or dial random or sequential numbers “Any reasonable means” of revoking consent Callers cannot limit means to revoke consent Callers liable for calls to re-assigned numbers One free call without liability “Subscriber and/or customary user” must give consent Subscriber and/or customary user has standing to bring claim

Permissible Phones After July 10, 2015 FCC’s TCPA Ruling

FCC’s July 10, 2015 TCPA Ruling

ACA International Appeal Appealing FCC’s July 10, 2015 TCPA Order that, inter alia, (1) solidified that predictive dialers were ATDSs, (2) found right to revoke consent through “any reasonable means,” and (3) found calls to “reassigned number” were actionable. Oral argument held on 10/19/2016 FCC confusion over position after Trump inauguration.

ACA Int’l v. FCC No. 15-1211 (D.C. Cir. Mar. 16, 2018) Decision addressed four holdings from FCC’s July 10, 2015 Order: (1) Definition of Automatic Telephone Dialing System (VACATED) (2) Reassignment of Telephone Numbers (VACATED) (3) Revocation of Consent (UPHELD) (4) Healthcare-related calls (UPHELD)

ATDS Definition Context: The TCPA only governs calls made by an ATDS – defined as a “Equipment which has the capacity (A) to store or produce telephone numbers to be called, suing a random or sequential number generator; and (B) to dial such numbers.” Since 2003, the FCC has included “predictive dialers” in its definition of ATDS, even if predictive dialers used only had the ability to dial from a list of telephone numbers (usually customers) and lacked the current capacity to generate and dial random and sequential numbers. FCC Ruling: In 2015, the FCC held the word “capacity” includes a dialer’s “potential functionalities” or “future possibility,” not just present ability, which brought a broad swath of dialing equipment (including smartphones) into the ATDS definition.

AUTO-DIALERS

ATDS Definition (cont’d.) D.C. Circuit: The Court struck down this section of the FCC Ruling, finding it too expansive. The D.C. Circuit was worried about an overly-expansive definition that included smartphones. The D.C. Circuit said the FCC failed to clearly answer the question: does a device qualify as an ATDS only if it can generate random or sequential numbers to be dialed, or can it so qualify even if it lacks that capacity? Continued: The Court also questioned whether a company can use an ATDS, but not be subject to the TCPA if it does not use the ATDS to make a specific call (i.e., manual calls or click-to-dial calls).

Cases after ACA International No consensus See Swaney v. Regions Bank, 2018 WL 2316452 (N.D. AL May 22, 2018)-FCC 2003 Order still controls-Primary consideration is whether human intervention is needed. Maddox v. CBE Group, 2018 WL 2327037 (N.D. Georgia May 22, 2018)-Can system automatically dial?

Cases After ACA International Marshall v. CBE Group, Inc., 2018 WL 1567852 (D. Nev. March 30, 2018)-Focuses on statutory language and focuses on whether equipment has the capacity to store or produce telephone numbers to be called using a random or sequential number generator.

Reassignment of Telephone Numbers Context: The FCC’s Ruling provided that callers were liable for unconsented calls made to a telephone number that had been reassigned from a customer/contact to a new user, even if the caller did not know of the reassignment. However, the FCC allowed for a one call “safe harbor” for the caller to discover the reassignment. D.C. Circuit: The Court struck down the entire section of the FCC’s Ruling dealing with reassigned numbers, including the one-call safe harbor provision. The Court agreed with prior Circuit Courts that calls to reassigned numbers violate the statue.

Revocation of Consent Context: The FCC Ruling held that a consumer could revoke using “any reasonable means.” D.C. Circuit: Upheld the FCC’s Ruling. Did provide some helpful guidance that called parties may not use “idiosyncratic” or “imaginative” means to revoke consent. Also, held that nothing in the FCC Ruling should be understood to speak to parties’ ability to agree upon revocation procedures.

FCC Reaction Chairman Pai Exemplifies “the prior FCC’s disregard for the law and regulatory overreach” “We will continue to pursue consumer-friendly policies on this issue” and “combat illegal robocalls and spoofing.” Commissioner O’Rielly Court’s decision “reaffirm[s] the wording of the statute of rule of law.” “This will not lead to more illegal robocalls but instead remove unnecessary and inappropriate liability concerns for legitimate companies trying to reach their customers who want to be called.” Expressly disagreed with Court’s view on “the revocation issue” and “believes there is an opportunity here for further review in order to square it with the Second Circuit’s more appropriate approach.”

FCC Reaction Cont’d. Commissioner Carr “rather than focusing on our efforts on combatting illegal robocalls, the 2015 FCC decision opted to subject consumers and legitimate businesses to liability. Thankfully, the D.C. Circuit, in a unanimous decision, has now corrected that error.” Commissioner Rosenworcel “One thing is clear in the wake of today’s court decision: robocalls will continue to increase unless the FCC does something about it.” “It is past time for the American public to get a serious response from the FCC.”

FCC-FTC Joint Summit on Robocalls Little discussion regarding TCPA Heavy focus on call blocking Pushed technological advances Little evidence as to what was coming next from FCC on TCPA

What’s next? Petition for rehearing en banc? Supreme Court? FCC?-New Request for Declaratory Ruling Filed Courts?

New Compliance Challenges Changes to policies and procedures? Impact on revocation procedures Changes to handling reassigned numbers?

Changes to Litigation Strategy? Seeking stay of litigation pending FCC Order? Is ATDS challenge now in play for predictive dialers? What about point & click / preview dialing systems? Any impact on revocation cases? Can we enforce single method of revocation?