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The New TCPA?– $26k per Call Penalties and Strict Liability for Wrong Number Calls: Here’s Your Definitive Breakdown of the Stopping Bad Robocalls Act
Friday, July 26, 2019

In critical TCPA news first reported this week, the Stopping Bad Robocalls Act passed the House of Representatives with an incredible 429-3 vote.

The bill is now off to the Senate for consideration and, as the Baron tells us, the bill has a good chance of meeting with success.

So now that the TCPA is set to be substantially amended, it falls to the Czar to provide definitive guidance on what to expect when the bill becomes law—likely later this year. Without further ado:

The FCC Is Told to Act and Act Fast on its Public Notice Proceeding

When the SBRA was first proposed last year the big news was the Congressional effort to expand the definition of ATDS to include dialers that call from a list. But that component of SBRA was left on the drafting table. Instead the SBRA does not purport to define the term ATDS at all—but instructs the FCC to do so in connection with its pending Public Notice proceeding.

Diving in, the bill states that within 6 months of passage the FCC must issue such clarifications necessary to assure that calls and texts sent using an ATDS or pre-recorded voice are properly regulated, that consumers can withdraw consent for such messages, and that callers maintain records of consent.

As drafted, the bill loosely tracks the components of the FCC’s pending TCPA public notice proceeding but it is a little unclear whether Congress intends the FCC to go further than its current notice contemplates. For instance, the Public Notice does not specifically address the requirement that businesses maintain records of consent. Additionally the Congressional directive that the FCC clarify a consumer can withdraw consent is quite vague—on the one hand it may suggest that the FCC must find that a consumer can always revoke consent (thus handcuffing the FCC to reject the Reyes doctrine of irrevocable contractual consent) or it may be a request that the FCC clarify that a consumer can generally revoke consent—subject to contractual imitations—although the statute does not contain language expressly authorizing revocation.

Since the SBRA does not track perfectly with the FCC’s earlier Public Notice, we can expect that the Commission will issue yet another Public Notice—its third on the subject—if the SBRA passes to seek comment on how best the Commission should interpret its new Congressional directives.

It will also be interesting to see how this sort of direct Congressional delegation plays into the Supreme Court’s recent hesitance to apply binding effect to agency determinations. Although the Hobbs Act remains in place—for now—affording the FCC’s formal declaratory rulings binding effect on the district courts, even if the Supreme Court ultimately deprives FCC orders of per se binding effect, it seems that this sort of express Congressional delegation of rulemaking authority might yet trump the interpretive functions of an Article III Court under the primary jurisdiction doctrine. More to come on that for sure.

Of note, the SBRA will specifically bring text messages within the scope of the TCPA. Although text messages have long been considered “calls” for TCPA purposes, the inclusion of such messages within the SBRA makes absolutely clear that Congress intends SMS messaging to remain subject ot the Act.

TCPA Exemptions Will Now Come With Strings Attached—And that May End Up Being a Very Big Deal

Historically the FCC was empowered to issue blanket exemptions for certain categories of calls that would otherwise be subject to the TCPA. Perhaps the single biggest such exemption is the commercial calling exemption that allows callers to utilize pre-recorded calls to send informational messages to landlines without express consent.

The SBRA seeks to curtail FCC authority to issue such exemptions in the future and requires amendment to previously-created exemptions. Under the SBRA all such exemptions must include (i) the classes of parties that may make such calls; (ii) the classes of parties that may be called; and (iii) the number of such calls that a calling party may make to a particular called party.

As with the Congressional directive to the FCC on implementing regulations, the requirement that the FCC specify who can make use of an exemption and for how many calls is a bit vague. On the one hand the language suggests that the FCC can no longer issue exemptions that can be used by everybody to make as many calls as they’d like—but it doesn’t quite say that. It seems likely, therefore, that the FCC will again be in a position to seek comment on the scope and breadth of all new exemptions and will attempt to issue limits—not unlike the CFPB’s new debt collection calling limits—that will curb the number of outbound calls that can be made in reliance on new exemptions.

Importantly, however, the rule does not just apply to new exemptions and the FCC is directed to scrub all of its current exemptions and within one year issue similar limitations for all currently-exempted calls. That would include exemptions for pre-recorded voice calls to landlines for non-telemarketing purposes, and to all other exemptions created under the TCPA.  We’ll certainly keep an eye on these developments.

Callers Will Have to Make Use of the FCC’s Reassigned Number Database to Avoid Liability for Calls to Recycled Numbers

It appears that the House is aware of the difficulties callers face with respect to detecting wrong number dialing. As I reported earlier in the week, the SBRA will define the term “called party” to mean the subscriber or customary user of the phone—creating a crippling strict liability regime where phone numbers change hands without a caller’s knowledge—however the new definitions would not take place until the FCC’s new re-assigned number (permanent disconnect) database comes to effect sometime next year.

Importantly, the SBRA reveals a Congressional understanding that the reassigned number database may not be rolled out for some time yet. Indeed, the SBRA requires the FCC to report back to Congress in a year regarding the status of the database. The report requires the Commission to advise Congress of the steps taken to implement the database and also limits any safe harbor available for recycled calls to those individuals that properly used the database before placing the violative call. In other words, “good faith” or other defenses will not be available in recycled number suit if the SBRA becomes law. Rather the FCC’s reassigned number database—with all of its complexity—will be a must use tool for anyone hoping to avoid liability for calls to recycled numbers.

As I’ve stated multiple times—most recently at the big TCPA summit this week—making use of the reassigned number database requires callers to take action NOW to identify last good dates for phone numbers they may intend to call when the database becomes available. Happy to discuss what will be required.

Note, however, that a caller appears to remain strictly liable—with no safeharbor available—for wrong number calling if the SBRA passes.

The FCC’s Enforcement Powers Will Become a Lot More Robust– $26k Per Violation Anyone?

One place where SBRA and TRACED converge is with respect to the FCC’s power to pursue forfeiture without prior notice to a wrongdoer in the case of willful violations of the TCPA. Under existing law the FCC must first issue a citation before pursuing a forfeiture penalty.

Both TRACED and SBRA would change that rules, however, at least where the caller can be shown to be acting willfully. Plus the penalties are enhanced. In addition to the $16k per violation already (likely) available under the Communications Act, the FCC would be empowered to seek an additional $10k per violation—for a whopping total of $26,000.00 per violation available in such actions. (The standard $500/$1,500.00 per call paradigm will remain the limit in civil suits, however—and all of this is [likely] subject to due process limitations.) This piece of SBRA harmonizes with TRACED, which also affords the additional $10k penalty.

Additionally SBRA increases the statute of limitations on forfeitures to four years for intentional violations and three years for negligent violations of the Act.

And Criminal Enforcement is Now a Real Threat for Scammers…

If SBRA passes the FCC will be required to report scam calls to the Attorney General for potential criminal prosecution. Importantly, this provision does NOT appear designed to criminalize “normal” violations of the TCPA—even if willful; rather the bill would require the FCC to report suspected criminal conduct using automated calling to the AG for prosecution.

The FCC is also instructed to keep score of its cooperation with the AG. Specifically, it is to report to Congress and in a publicly-available fashion the number of reports it has made to the AG and a general statement of the nature of the violation. (It is unclear whether the FCC will also identify the caller in this report.)

Required Caller Authentication (Shaken/Stir)

The FCC is on record noting its impatience with carriers’ efforts to implement the SHAKEN/STIR authentication protocol approved by the Commission last year. Well Congress, it seems, is even more impatient—giving the Commission one year to finalize implementing regulations mandating adoption of an authentication protocol (presumably SHAKEN/STIR) no later than 18 months after SBRA’s passage.  The authentication protocols must be free to consumers and the FCC is required to re-evaluate their effectiveness every two years. The FCC would also be required to grant the carriers the power to block unauthenticated calls (although the FCC has, rather famously, already afforded the carriers that power.)

Relief for Callers Impacted By the FCC’s Default Call Blocking Rules?

One of the shortest (and certainly the vaguest) provisions of SBRA may end up being the Act’s most impactful. As reported previously, the FCC’s default call blocking rules empower the carriers to use “reasonable analytics” to predict and block calls consumers are unlikely to “want.” But identifying unwanted calls is, of course, impossible—just as one man’s trash is another man’s treasure, one man’s unwanted call is another man’s key to salvation.

While the FCC’s call blocking order makes mention of a redress mechanism for callers who believe their calls are being improperly blocked by the carriers, the Order did not actually require the carriers to offer a redress procedure or even mandate that callers be informed when calls are blocked. The SBRA appears (appears) to change that. It requires the FCC to adopt regulations to assure callers are provided with “transparency and effective redress options.” It also mandates that call blocking rules must be free to the end user.

Interestingly, SBRA does NOT mandate that the carriers be empowered to block calls by default—other than unauthenticated calls and one-ring call scams—meaning that the FCC remains empowered to reconsider or reverse its recent default call blocking position. Given that the SBRA is designed to stop unwanted calls, it is fascinating that the House bill elects to stop short of mandating a step that the FCC has already adopted in its battle against the robocall epidemic. Whether this is due to constitutional concerns, concerns that legitimate businesses are being improperly silenced, or just an oversight is unclear.

Interagency Working Group—as with TRACED, the CFPB and DOJ Are Invited the TCPA Enforcement Party

As with TRACED, SBRA creates an interagency working group to study why there aren’t more federal enforcement proceedings involving the TCPA.Specifically, participants—which will include the CFPB. DOJ and Department of Homeland Security—are supposed to study whether any rules or law inhibit the prosecution of TCPA violations and what policies can be adopted to encourage more such enforcement suits. Great.

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