Several Democratic members of the U.S. House of Representatives, including the chairman of the House Oversight and Reform Subcommittee on Economic and Consumer Policy, recently introduced the Robotext Scam Prevention Act (HR 8334) that would expand the reach of the Telephone Consumer Protection Act (“TCPA”). Most importantly, it would expand the definition of automatic dialing equipment that triggers TCPA liability for unconsented calls to cell phones, effectively overturning the Supreme Court’s decision in Facebook v. Duguid. The bill would also expressly include texts within the ambit of the TCPA.
Background and Summary
Absent a consumer’s express consent, the TCPA imposes strict liability for making calls to a consumer’s cell phone using an automatic telephone dialing system (“ATDS”), which the statute defines as equipment with the capacity to store or produce numbers using a random or sequential number generator and to dial such numbers. With its statutory damages of $500 or $1,500 per illegal call, the TCPA is one of the primary sources of class action litigation. In Facebook, the Supreme Court resolved a circuit split over whether the numbers dialed by an ATDS must be randomly or sequentially generated, or whether any autodialed call, even to preselected numbers, created liability. The Supreme Court ruled that the narrow interpretation constituted the proper reading of the statute and that, to qualify as an ATDS, the equipment must generate numbers to be dialed randomly or sequentially. In the opinion, SCOTUS stated that “[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.”
The Supreme Court’s ruling has had some dampening effect on litigation. But it has been controversial and has led Federal Communications Chairwoman Jessica Rosenworcel, Sen. Ed Markey, the original TCPA sponsor, and other senior Democratic leaders in the House Energy and Commerce and Senate Commerce Committee to call for the reversal of the narrowed ATDS definition in the Facebook decision.
In line with those sentiments, the bill would effectively overturn Facebook by removing the requirement that an ATDS must be able to generate numbers randomly or sequentially and it would also expressly include text messages. Under the bill, an ATDS would be redefined as equipment that has “the capacity to store or produce telephone numbers to be called or sent a text message” and “to automatically dial or send a text message to such numbers.” The bill inserts the word “automatically,” which may be interpreted to preserve manual dialing systems. The bill would also direct the FCC to conduct a rulemaking to define the terms such as “automatically,” “dial,” and “send,” with “consideration given to modern dialing practices and consumer preferences.” Such a rulemaking, if undertaken, would have massive implications for many businesses..
The bill’s express addition of texts may have little practical effect. Many courts and the FCC have found texts to be included in the TCPA. The Supreme Court dodged the question in Facebook, which involved a text message, by noting that neither party had challenged the assumption that the TCPA’s autodialing ban included texts. Reaching consumers by texting has been increasingly popular with businesses, but scams involving illegal texts have also risen. FCC Chairwoman Rosenworcel has circulated with other commissioners a proposal to address illegal texts, but no further action has been taken. In the meantime, the wireless industry has developed a set of rules around the use of regular phone numbers to send texts, called 10 Digit Long Codes or 10 DLC. Failure to comply with those industry-set rules could result in higher costs or industry-imposed penalties.
Finally, the bill codifies the FCC’s establishment of a reassigned number database. This database is designed to provide callers with information on whether the number they are calling has been reassigned to another consumer. Callers have been found liable under the TCPA for making a call to a number for which they had, at one time, received consumer consent but, unknown to the caller, has been reassigned to another consumer that has not provided consent. The reassigned number database became operational for paid subscribers on Nov. 1, 2021. Also consistent with FCC action, the bill would create a safe harbor that would preclude liability for a caller that calls or texts a reassigned number if the caller can prove it checked the database and it showed the number had not been reassigned.
The full text of the bill is available here.
Implications and Outlook
Expanding the definition of autodialing equipment would likely ignite a new surge of class action litigation. On the other hand, illegal robotexts, like illegal robocalls, are a major consumer complaint that legislators and regulators have a strong incentive to address. Rules to curtail illegal robocalls, however, are often blunt instruments affecting legitimate efforts by companies to maintain contact with their customers.
Although we are skeptical that there is time for the Robotext Scam Prevention Act to move this Congress, with the popularity of being “against robocalls” in an election year, it is legislation that interested parties should keep an eye on and work to educate lawmakers about its impact. There is also always the possibility that parts of this legislation could move in larger packages in Congress during the lame duck period.
Additionally, since the FCC chairwoman has been vocal that she supports unwinding the Facebook decision, stakeholders should also be vigilant for any activity that could play a role in doing that at the FCC. This will be especially true once a fifth commissioner is confirmed and they have a fully seated Democratic majority to move any items aligning with the Democratic positions in Congress related to the TCPA.
THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING LEGISLATION CHANGING THE ENFORCEMENT OF TCPA. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.