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No Safe Harbor for Reassigned Numbers: D.C. Circuit Unwinds 2015 FCC TCPA Ruling

For our overview of the full D.C. Circuit opinion in ACA International v. FCC, click here. Here, we examine the D.C. Circuit’s reversal of not simply the one-call safe harbor for reassigned numbers imposed by the FCC’s 2015 TCPA ruling but also the Commission’s treatment of reassigned numbers as a whole. As background, the Court began with “[t]he pertinent statutory language [which] generally renders it unlawful ‘to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing equipment or prerecorded voice.’” The 2015 ruling found that ‘called party’ meant the current subscriber of the phone number and not the intended recipient of the call (a view shared by the Seventh and Eleventh Circuits, as discussed below).

But what happens when the intended recipient no longer uses that phone number? People leave family plans, move cities, or chunk disposable phones; and as a result, numbers recycle at a significant rate. “While there is no consensus about the exact numbers of reassignments, there is no dispute that millions of wireless numbers are reassigned each year.” TCPA issues arise when a caller has consent to call an individual who then abandons the phone line, meaning that when the caller seeks to reach that individual, they reach someone else entirely from whom they lack consent to call. The 2015 ruling determined that the caller in that situation could reasonably rely on the consent provided by the holder of the phone prior to reassignment for one call that would not violate the TCPA.  After that one call, TCPA liability would attach.

“The Commission, in its ruling, initially addressed who is properly considered the ‘called party’ when a consenting party’s number is reassigned to another person: does ‘called party’ refer to the person the caller expected to reach (whose consent had previously been obtained), or does it refer to the person actually reached, the wireless number’s present-day subscriber after reassignment (whose consent has not been obtained)?” The FCC chose current subscriber, meaning that “the reassignment of a wireless number extinguishes any consent given by the number’s previous holder and exposes the caller to liability for reaching party who has not given consent.”

Both the Court and the Commission acknowledge that “[t]he ruling thus expressly contemplates that a new subscriber could ‘purposefully and unreasonably’ refrain from informing a good-faith caller about a number’s reassignment ‘in order to accrue statutory penalties.” The ruling further acknowledges that such accrual occurred in one case where the plaintiff waited until 900 calls had occurred prior to filing suit.

Yet, the D.C. Circuit rejected the defendants’ anthem that called party could only mean ‘intended recipient.’ Looking to Seventh and Eleventh Circuit case law that has long held to the contrary, the Court concluded that “the Commission was not compelled to interpret ‘called party’ in section 227(b)(1)(A) to mean the ‘intended recipient’ rather than the current subscriber. The Commission thus could permissibly interpret ‘called party’ in that provision to refer to the current subscriber.”

After preliminarily determining that the 2015 ruling permissibly determined that called party refers to currents subscriber, the Court turned to the one-call safe harbor. In so doing, the Court noted that “[t]he Commission . . . consistently adopted a ‘reasonable reliance’ approach when interpreting the TCPA’s approval of calls based on ‘prior express consent,’ including as the justification for allowing a one-call safe harbor when a consenting party’s number is reassigned.” However, “[t]he Commission . . . gave no explanation of why reasonable-reliance considerations would support limiting the safe harbor to just one call or message. That is, why does a caller’s reasonable reliance on a previous subscriber’s consent necessarily cease to be reasonable once there has been a single, post-reassignment call? . . . In that light, no cognizable conception of ‘reasonable reliance’ support the Commission’s blanket, one-call-only allowance.”  Thus, that part of the 2015 ruling was arbitrary and capricious.

Having invalidated the safe harbor, the Court then had to determine whether its earlier conclusion on the definition of ‘called party’ could stand on its own. “When [the Court] invalidates a specific aspect of an agency’s action, [it] leaves related components of the agency’s action standing only if ‘we can say without any substantial doubt’ that the agency would have adopted the severed portion on its own.” In this case, though, the Court found it had no such assurance: “If we were to excise the Commission’s one-call safe harbor alone, that would leave in place the Commission’s interpretation that ‘called party’ refers to the new subscriber. And that in turn would mean that a caller is strictly liable for all calls made to the reassigned number, even if she has no knowledge of the reassignment.” The FCC itself found that result untenable and the Court did as well, setting aside “the Commission’s treatment of reassigned numbers as a whole.”

With a clean slate, courts must turn back to the text of the TCPA itself. In that regard, the growing consensus is that called party does not mean intended recipient, and that—as the Seventh Circuit held in Soppett v. Enhanced Recovery Co.—consent “lapses when [a] [c]ell [n]umber is reassigned.” That said, callers are not necessarily on the hook for continuing to call a number it has no idea has been reassigned. And the Court in ACA concluded with noting that “[t]he Commission recently sought comment on potential methods for ‘requir[ing] service providers to report information about number reassignments for the purposes of reducing unwanted robocalls.”