What can the FCC do with the phrase “express consent?”

That is the question.

Require it to be in writing? Seems like yes.

Require consumers to “clearly and unmistakably” consent to each caller? Seems like yes.

Limit the consumer to calls “logically and topically” related to a website? Probably not.

These are a few high-level take aways from an incredibly interesting oral argument yesterday in the IMC challenge of the FCC’s one-to-one rule.

The good news is that some of the rule may be going away–albeit for reasons totally inconsistent with IMC’s position. The bad news, is that things may end up worse than ever for lead generators–and lead buyers– as any leads not complying with the R.E.A.C.H. v. 1.0 standards are likely unenforceable.

So let’s dive in here.

Helpfully for industry the Eleventh Circuit panel members appear focused on the idea of a consumer’s “right to consent” as a concept that is paramount and sacrosanct. That’s weird because it is a right that has never been recognized before. Indeed, the panel seems to have made up the idea out of whole cloth.

But once you look at the issue and squint at a bit it does start to make sense to view the ability to consent as a “right” of a consumer as opposed to a “defense” of a caller. Still neither IMC nor the FCC’s counsel seemed totally prepared for the curveball that may ultimately determine the outcome here.

Below is my blow by blow of the argument. The key things to take away are this:

1. The panel seems to agree that the FCC can set and adopt standards to implement the express consent terms of the TCPA–for instance adopting standards that R.E.A.C.H. has regarding the size and location of font, etc. would be fine. Clear and conspicuus is fine. Written consent is fine. Different rules for marketing and non-marketing is fine.
2. Limiting consumers to expressly defining the entities they want to hear from in a “clear and conspicuous” way is also fine. So requiring check boxes–as opposed to hyperlinks–is also fine.
3. What is not fine, however, is taking away a consumer’s right to consent. There are two places where that is a problem with the new one-to-one rule:
   1. Restricting a consumer from clearly consenting to receive calls from affiliates of a brand one one swoop;
   2. Depriving consumers of the ability to clearly consent to receive calls from different products that are not “logically and topically” related to website.

So what does this mean?

I think there is a high likelihood logically and topically related standard is dead. But the Court seems to be inclined to permit implementation that requires express “one-to-one” consent check boxes, perhaps with the modification to allow affiliates of brands to be included. (Immediately sets up a battle with the carriers, however, who do not allow such consents for SMS messaging.)

Setting all of that aside, let’s dive deeper in to the panels questions and see what we can glean. Here’s my blow by blow analysis:

1. IMC’s counsel was questioned initially about whether “prior express consent” had been examined or interpreted as a phrase. While Counsel meekly argued it had been the panel corrected him and advised common law had only been applied to interpret “consent” and not the full phrase–which makes sense since common law has no concept of “prior express consent.” This matters because the focus on the word “express” seems likely to drive the outcome of decision here– i.e. does the word “express” mean “written” and/or “one-to-one written consent.” (IMC’s counsel didn’t pick up on where the court as going and was focused on “scope” of consent. The Court had to define it for him as “clearly and unmistakably stated.”) Seems unlikely the answer is yes.
2. Moments later the panel confirmed this thinking by advising the issue is how the FCC may “implement” the phrase express consent in light of the fact courts have not addressed the phrase. IMC’s counsel conceded some regulation is allowed. The panel goes on to state that THIS is the critical issue determining the outcome of the case.
3. IMC’s counsel pushed the idea that the single phrase prior express consent improperly creates two different consent paradigms. The panel was not impressed with this argument and seemed fine with the FCC applying the phrase with different applications in different settings. This is a big clue as to why the one-to-one rule might be upheld.
4. IMC’s counsel argues the “rule of decision” is the common law and the FCC failed to show common law is consistent with consent given on a one-to-one basis. This argument appears to fall flat.
5. Luck inquires whether the FCC could form a rule requiring companies to expressly identify companies that can call to be checked off by the consumer. IMC’s counsel senses trouble here and suggests this would be a conflict with the statute but doesn’t really explain why.
6. “Why doesn’t implementation give them [FCC] wiggle room…?” Seems to be the critical question. IMC’s counsel answers only with the concept that the FCC does not have the authority to re-write the statute, which really doesn’t move the ball.
7. Court asks about “commercial purposes” exemption for calls to landlines. IMC’s counsel is totally unprepared for this question. Responds: “I don’t know and I hesitate to speculate.” UGH.
8. IMC’s counsel pivots away from exemption authority despite the panel’s seeming hunger for more on the subject. Discusses APA argument. He is cut short on time and cannot make a point here– I do not blame him, however. The panel was very active.
9. FCC’s counsel begins argument picking up on Luck’s question (5 above.) In a very telling exchange Judge Luck seems to not have understood that “one to one” consent can be obtained via a multi-party checkbox.
10. FCC’s counsel explains rule as a “bright line” rule– one that would permit a checkbox for a single entity and one that would not permit consent to multiple.
11. “The crux of my concern… is express consent is a right by the called party to consent to get commercial calls.” This may end up being the most important piece of the case. “Its the consumer’s right to be able to get that communication.”
12. IF that is the case how is it implementing that right to limit the authority of that right? Limiting consent would be in conflict.
13. FCC does a nice job here. It has to allow consumers to get the calls they want to get. “Clear and conspicuous” was already required. Focuses on the problem.
14. “Tend to agree with FCC” the rule is not arbitrary and capricious— major hint that IMC’s primary challenge is going to be rejected.
15. FCC’s lawyer reminds panel “part of implementation is not just assuring callers get the calls they want but also the calls they don’t want.” Very well stated.
16. “If a right is given to me how can you take away that right because some people are abusers?” Go after the abusers. Don’t go after me.
17. FCC responds that a consumer can provide that consent by using checkbox and that’s a small price to pay. There has to be “balance” achieved– that is what implementation means. Here the FCC’s counsel fumbled a bit. The court wanted to hear about express consent. The FCC should have focused on consumer confusion with forms and how the requirement of “express” in the statute contemplated the “right” to consumer is only a limited right that can be defined by the FCC. Commission missed opportunity there.
18. After discussion of enforcement FCC lawyer does get back to the heart of the problem– consumers were accidentally “consenting” to receive calls.
19. “Consent is this big circle. [FCC only allowed] a piece of that circle. How is that allowed? How is that implementation?” And “give me your best case” that allows you to implement a right by limiting it. FCC counters implementation will always restrict a right to consent in some manner. Panel member concedes that argument has appeal but rejects it. Focuses on express as “clear and unmistakably communicated.”
20. FCC can require consent to be “clear and unmistakable” but can’t take away any portion of the right.  This seems to be the critical theme.
21. FCC’s lawyer analogizes to contract with initials next to certain provisions. Explains why this is an implementation of express consent. This again is clever.
22. Now “logically and topically” related is expressly discussed. The issue that a consumer cannot provide consent outside the scope of a website seems to be disconcerting to the panel. Court correctly frames the issue as “so many people didn’t understand what they were doing that we are going to deprive you of the right to do it.”
23. FCC tries to circle back to how industry operated. Judge responds “don’t you have to look at what the statute says.”
24. FCC tries to say visiting website on one topic makes it “very unlikely” consumer wants robocalls about something else. “How do you know that?” is response from court. What’s wrong with one-stop shopping? FCC falls back on policy expertise.
25. “Implementation is a fine line.” Not enough briefing. “there is room for the FCC to regulate here. They have the power to do some stuff.”
26. IMC’s argument: FCC can implement to same degree a court could find under plain language of the statute and no more. Court seems to disagree here.

So we are left without an answer to the ultimate question: how far can the FCC go in implementing a right in a statute? I suspect the Court will say something along the lines of “We know not where the specific line is, but we hold a federal agency cannot “implement” a right by restricting it beyond the scope outlined by Congress.”

Great. So does the FCC’s one-to-one rule do so?

As noted above I think the answer is likely yes but only in two ways: i) preventing agents and affiliates of a company from be looped in with the brand the consumer is consenting to; and ii) the disastrous logically and topically related standard.

The FCC COULD however:

• Require check boxes rather than hyperlinks to gather consent
• Requiring above-the-button and clear-language disclosures (as courts already are)
• Requiring font size resrictions/requirements.

In other words the FCC can (and should) adopt the REACH v. 1.0 standards.

But it hasn’t.

So that leaves us with the question: will the Eleventh Circuit leave any of the FCC’s rule in place? Will it strike it down completely? Will it leave it in place but advise courts they cannot follow certain pieces of it?

Very very fascinating.

So to sum up, the Eleventh Circuit seems to be thinking of the appeal like this:

1. Congress gave the FCC authority to implement the TCPA. So it may make rules to interpret it.
2. Courts have not interpreted the phrase “prior express consent” and the common law does not define it– so the FCC is somewhat free to make a rule regarding its meaning.
3. The rule cannot conflict with the statute, but FCC has some “wiggle room” to implement the statute and the rule may have different application in different places.
4. The panel seems to agree the FCC’s ruling is not arbitrary and capricious and is consistent with the record.
5. Because the FCC is implementing a right and not a restriction–i.e. the right to receive robocalls and not the right to be free from them– the FCC’s activity must be consistent with that right.
6. With the question re-framed any implementation by the FCC that trims down on that right is “inconsistent” with it. So the FCC can require consent to be “clear and unmistakable” but it cannot deprive the consumer of the ability to provide that consent.

At bottom I will say this. If IMC wins this ruling it will not be for the reasons people think.

It will be because THE ELEVENTH CIRCUIT COURT OF APPEALS ALREADY READS THE TCPA’S EXPRESS CONSENT RULES TO BAN THE PRACTICES OF MOST LEAD GENERATORS.