DC Circuit Court Ruling – Important TCPA Changes

This blog explains the recent D.C. Circuit Court decision, focusing on its impact on the SMS marketing world. Please see the summary below.

The TCPA and the FCC

The Telephone Consumer Protection Act (TCPA) was adopted in 1991. The Federal Communications Commission (FCC), which governs issues pertaining to SMS marketing, implements TCPA laws. The TCPA sets the requirements for brands engaging in text message marketing and outlines fines ranging from $500 to $1,500 per message for any entity that violates those requirements. 

Recently, the D.C. Circuit Court of Appeals gave an important opinion with rippling effects throughout the world of text message and phone marketing. In 2015, the FCC announced guidance about its interpretation of the TCPA. Multiple sections of this order were controversial. Many brands launched appeals to this guidance. Since the FCC enforces TCPA rules, any changes would affect the entire industry. Over time, these appeals were combined into one case with the D.C. Circuit Court of Appeals. 

When the court is focused on TCPA matters, there’s often built-in deference toward the FCC since it’s the designated regulatory body. If the court saw the FCC’s interpretations as reasonable, the orders would be unlikely to change. However, because of the support behind this case in favor of changing the FCC’s ruling, the court moved forward with the case. Uncertainty about TCPA issues typically forces regional courts to issue their own judgments, negatively impacting brands across the nation since they can’t count on consistent legal boundaries. Oral arguments were heard in 2016 for this massive case, but the decision took almost three more years. 

D.C. Circuit Court of Appeals Decision

The D.C. Circuit Court of Appeals sided with the FCC on some issues and agreed with the companies on other issues. The three judges were united on each of the four main points in the case, described below:

Defining an autodialing system. The FCC’s original interpretation of this term was considered to be far too broad. Technically, any modern cell phone could be an autodialer since it would be possible to modify the devices to call multiple customers. The judges ruled this to be unreasonable and called for more specific and actionable definitions. 

Reassigned numbers. If a phone number was reassigned to a different customer, the FCC only gave SMS marketing companies grace for the first message sent to the incorrect person (even though the brands have no reasonable way to know about the mistake). Professional TCPA plaintiffs took advantage of this issue, leading to many avoidable lawsuits. After this court case, the FCC will now work with brands and service providers to create a reassigned numbers database. 

Revocation of consent. When a customer wants to withdraw their consent to be contacted, the FCC allows any method a customer considers reasonable. In practice, this could cover a customer shouting at a storefront to unsubscribe (as long as the person thought it was reasonable). The appeal to the court pushed for a clearer way to remove consent. The judges sided with the FCC here. This will most likely remain a contentious legal issue. 

Messages related to personal health. This issue was specific to health care companies and messages related to personal health, such as flu shots or appointments. The judges also decided in favor of the FCC.

Looking Ahead at Changing TCPA Boundaries

The legal boundaries of the TCPA may change each year (though usually not as significantly as this decision). Better definitions and guidance help brands look ahead. Unfortunately, legal uncertainty can lead to extreme caution and lost business opportunities. We recommend working with attorneys well versed in TCPA issues to ensure you get the most up-to-date information and guidance. 

To learn more about text message marketing, contact our SMS marketing experts at Tatango.