/>iIn December 2023, Privacy World reported on an order from the Federal Communications Commission’s (“FCC”) designed in part to close the “lead generator loophole” in the agency’s Telephone Consumer Protection Act (“TCPA”) consent rules. Now, just over a year later, on January 24, 2025, the United States Court of Appeals for the Eleventh Circuit (“11th Circuit” or “Court”) resoundingly rejected the FCC’s closure efforts, finding that the agency exceeded its statutory authority under the TCPA.
The FCC Rule — As noted in our prior report, the FCC acted because under existing rules “consumers may unknowingly ‘consent’ through a single interaction with a comparison shopping or other type of website to be contacted by a multitude of unrelated commercial entities for marketing purposes.” Moreover, these “consent ‘leads’ may be sold to other entities who offer services in which the consumer did not knowingly indicate an interest initially.”
The FCC’s closure solution had two key components (collectively, the “FCC Rule”). First, it required texters and callers using automated or artificial or prerecorded voice technology to obtain a consumer’s prior express written consent to deliver marketing messages from a single seller at a time (i.e., on a “one-to-one basis”). Second, the content of the calls or texts must be “logically and topically” associated with the interaction (e.g., website) where the consumer provided contact information, even if the consumer “clearly and unmistakably” consented to the call (e.g., a consumer’s consent to receive calls from a home repair business would be invalidated if that consent was obtained on a website related to home mortgages). The agency had set January 27th as the date on which these requirements would take effect.
The Appeal and Other Opposition – The Insurance Marketing Coalition, a consortium representing a cross section of insurance industry stakeholders, promptly petitioned for the 11th Circuit to overturn the FCC Rule on several grounds. Other stakeholders strongly opposed the FCC Rule and sought revisions in the 12-month lead up to the January 2025 effective date. One interested group filed a last-minute stay request based on one of President Trump’s early Executive Orders.
Whatever the cause, at the last minute, on January 24, 2025, the FCC Itselfagreed to stay the Rule for another year, pending the result of the 11th Circuit case. The agency justified its action in part by anticipating that “judicial review of the rule is likely nearing completion.” Perhaps the FCC saw the handwriting on the wall because the Court overturned the FCC Rule that very same afternoon.
The Court’s Decision and Vacatur – The Court based its decision on the “common law concept of consent” that Congress sought to incorporate into the TCPA. To give prior express consent, “[o]ne need only ‘clearly and unmistakenly’ state that before receiving the robocall he is willing to receive [it].” Applying that concept, in the wake of Loper Bright, the Court ruled “the TCPA’s text is clear: Callers must obtain “prior express consent”—not ‘prior express consent’ plus.” As a result, “the FCC exceeded its statutory authority under the TCPA because the …new consent restrictions impermissibly conflict with the ordinary statutory meaning of ‘prior express consent’” in the TCPA. Although the FCC Rule might be “good policy,” it does not permit the agency to exceed its statutory authority to interpret the TCPA.
The Court found the FCC’s action of attempting to “redefine” the TCPA to include these additional restrictions to be a “serious defect.” As a result, the Court vacated the FCC Rule, a remedy that even the FCC did not contest. So, upon remand to the FCC, the prior consent rule (without the December 2023 restrictions) is resurrected.
What’s Next? – At this point, what is next at the FCC is unclear. There is now a new Chair of the agency, Brendan Carr, who did support the December 2023 order, without a separate statement. His agenda may not include a request to seek further review before the 11th Circuit, or for that matter, the U.S. Supreme Court. To date, he has made no statement on the Court’s decision and his intent. And the FCC’s decision not to contest the vacatur of the Rule may be predictive. Still, courts dealing with TCPA consent issues will likely look to what the 11th Circuit said and what “clearly and unmistakenly” means.
It is reasonable to expect a clamor from the coalition of consumer groups for the FCC to address the issue again within the confines of the Court’s decision. Part of the December 2023 order was a further notice of proposed rulemaking about “refining” the FCC Rule. However, the Rule is no longer there to refine. Finally, the FCC, until the approval of the proposed new member of the Commission, Olivia Trusty, is in a 2-2 posture, as well as leadership changes taking effect in the key Bureaus of the Commission; thus, there may not be further action in the near future on this issue. However, beware of any new FCC administrative action, in light of Loper Bright, as “the reviewing court shall decide all relevant questions of law.”
As for possible legislation, Congressman Pallone (D- N.J.) introduced an extensive TCPA reform bill in the last Congress, H.R. 7116, which did not address this issue. Again, although it is bipartisan issue, it is too early to know whether there is the appetite to address the TCPA in the new Congress, where there are also leadership changes on the relevant Congressional committees.
