Last Friday, March 16, the D.C. Circuit published its
significant decision in ACA Int'l v. FCC regarding, among other things, what an autodialer (ATDS) is. While the appeal involved 4 separate issues, the industry prevailed on 2 of the 4 - the more important 2 in our view: autodialers and reassigned numbers. Before you get too excited, the D.C. Circuit did not invalidate the general prohibition on autodialing cells without consent. Rather,
it set aside the FCC's overly broad "capacity" ATDS definition. The Court's primary argument was that under such a standard, every smartphone would be an autodialer because they could all potentially be used to download autodialing apps. This was the same argument our industry made when the FCC order was published in July of 2015. The Court agreed, stating this would create an "unreasonable and impermissible standard."
The rule remains, however, that you may not use an autodialer to call/text a cell phone without consent. So nothing about this new decision expressly allows us to use a predictive dialer to cold call cells. Individual courts will now need to look back at the statute and decide whether they believe the language covers predictive dialers or not - some will find in our favor and some will not. It is very possible that the new leadership at the FCC will make further positive changes to ATDS standards, now that the D.C. Circuit has ruled. Companies will need their calling systems re-reviewed at this time to ensure they have no significant ATDS exposure, despite this ruling.
It will, no doubt, be easier going forward to establish that manual calling systems are not autodialers merely because they could potentially be upgraded to have ATDS capacity. This is a very welcome legal development. We will publish more on the other 3 issues involved in the appeal in the coming days: reassigned numbers, consent revocation, and the scope of the healthcare exemption. There is not room to address all of these issues here, especially where other important legal updates need to be made today as well (below). This is a major breakthrough in the telemarketing industry. Schedule a consultation with a
telemarketing attorney if you'd like to discuss it further. Learn more about
telemarketing compliance,
telemarketing regulations,
ATDS definition, and
autodialer laws.
Feature Films For Families Settles FTC Case Involving Alleged DNC Violations
In 2016, a federal jury found that three Utah-based companies had illegally called more than 117 million consumers to pitch movies - equating to a potential fine over 1 trillion dollars. Last week, the defendants agreed to voluntarily settle the case (already had verdict but no judgment) against them. The final stipulated judgment imposes a $45.5 million civil penalty, of which the defendants will only be required to pay $487,735 unless they are found to have misrepresented their financial condition. This is a lot better than a trillion dollars, of course. Read the FTC's press release
here. Learn more about
cell phone telemarketing laws and
do-not-call regulations.
FTC Shuts Down Cryptocurrency Promoters
The FTC has obtained a court order shutting down a defendant for allegedly promoting deceptive money-making opportunities involving cryptocurrencies. The FTC's complaint alleges that the defendants, "promoted chain referral schemes known as Bitcoin Funding Team and My7Network. Using websites, YouTube videos, social media and conference calls, the defendants allegedly promised big rewards for a small payment of bitcoin or Litecoin." The complaint continues to allege that, "the structure of the schemes ensured that few would benefit. In fact, the majority of participants would fail to recoup their initial investments." Read the FTC's press release
here.
10th Circuit Court of Appeals Rejects TCPA Coverage for Dish Network
You may recall that in June of 2017, Dish Network was hit with a
$280 million fine for Do-Not-Call list violations. Dish Network argued that its insurance carrier, ACE American Insurance Company (ACE), should have covered such "damages" under their general liability policy. Unfortunately, a Colorado District Court held that ACE had no duty to defend Dish Network, as the fine falls under the category of uninsurable "penalties" and not "damages." On February 21st, the 10th Circuit of Appeals affirmed that decision. Read the full decision
here. Contact a
TCPA attorney if you are faced with a similar situation. Consider having a
telemarketing lawyer perform a
telemarketing audit of your call center business.
