AuthorAllison, Walter

Technology regulations succeed or fail based upon their ability to regulate an idea. Constant innovation forces legislators to draft statutes aimed at prohibiting the idea of a device, rather than a specific device itself because new devices with new capacities emerge every day. The Telephone Consumer Protection Act (TCPA) is a federal statute that imposes liability based on the idea of an automatic telephone dialing system (ATDS). But the statute's definition of the device is ambiguous. The FCC struggles to coherently apply the definition to new technologies, and courts interpret the definition inconsistently. Federal circuit courts have split over these inconsistent interpretations. This Note explains the problems associated with the TCPA's definition and outlines a solution that ensures uniform and workable enforcement of federal rules.

INTRODUCTION I. THE ORIGINS OF A DILEMMA A. The TCPA and the ATDS Definition B. Applying the ATDS Definition to New Technology in the FCC's 2003 Order C. The FCC's 2015 ATDS Interpretation Creates "Potential" Problems II. CIRCUITS SPLIT OVER THE ATDS DEFINITION'S NECESSARY ELEMENTS A. ACA International v. FCC: Setting Aside the FCC's Interpretation Sets the Stage for Circuit Split B. Dominguez v. Yahoo, Inc.; Interpreting ATDS Post-ACA International C. Marks v. Crunch San Diego, LLC; Circuit Split III. THE FCC SHOULD RESOLVE THE CIRCUIT SPLIT BY DECLARATORY RULING A. The FCC's Ability to Resolve the Circuit Split B. A Twenty-First Century Interpretation of Automatic Telephone Dialing System 1. To Store 2. Excluding Ordinary Smartphone Use 3. Capacity CONCLUSION INTRODUCTION

A child sustains a life-threatening injury at home. (1) Frantic, the child's mother rushes to the telephone to dial 911 and summon an ambulance. (2) But she can't place the call. (3) Her phone line is tied up by an autodialer, a computerized device used by telemarketers to call potential customers. (4) The autodialer has seized her phone line and it won't disconnect, even if she hangs up. (5) While her child suffers, the mother realizes she is incapable of calling for help until the autodialer's recording has completed its message and relinquishes the line. (6) The mother's realization of helplessness will later be described as "sheer terror." (7)

That was thirty years ago. The child lived, but the problem persisted. (8) The early 1990s were plagued with automated calls that intruded into every facet of American life. (9) Some automated calls were merely a nuisance. (10) Others threatened public safety. Automatic dialing systems unwittingly called firefighters, police officers, and hospital emergency lines, seizing the phone line and preventing actual emergency calls from getting through. (11)

In 1991, Congress enacted the Telephone Consumer Protection Act (TCPA), which defined devices that qualified as "automatic telephone dialing systems" (ATDSs), regulated their use, and empowered the Federal Communications Commission (FCC) to promulgate rules and regulations to implement the TCP A. (12) But since the TCPA's enactment, interpreting the ATDS definition has frustrated the FCC and courts alike. Applying the definition to emerging technologies has proved especially difficult, as smartphones and cloud-based communication apps have challenged preconceived notions of the type of device that constitutes an automatic telephone dialing system.

Definitional uncertainty can be devastating for defendants. The TCPA created a private right of action, permitting persons or entities to recover $500 in damages for each call placed in violation of the TCPA's regulations and treble damages if the court finds that the defendant willfully or knowingly violated the statute. (13) There is no cap on damages. Theoretically, they are infinite. (14) Thus, to insulate themselves from potential liability, organizations must be certain which devices qualify as ATDSs. Unfortunately, the FCC has not provided certainty. In a series of increasingly byzantine orders and declaratory rulings, the Commission revised its interpretation of the ATDS definition to account for technological innovations. (15) In the process, the FCC inadvertently raised new issues, fueling uncertainty over which types of devices qualified as ATDSs. (16) In 2015, the Commission issued an interpretation encompassing devices that had the "potential ability" to perform ATDS functions. (17) Finding the interpretation to be too expansive, the D.C. Circuit invalidated the FCC's 2015 Declaratory Ruling as it pertained to which devices qualified as ATDSs. (18) That decision perpetuated the uncertainty, eventually resulting in a split between the Third and Ninth Circuits. (19) Currently, there is no consensus on the ATDS definition.

This Note advocates for a new FCC declaratory ruling that decisively interprets "automatic telephone dialing system." The FCC should interpret the ATDS definition as: equipment which has the current ability to (1) store telephone numbers to be called, or produce telephone numbers to be called using a random or sequential number generator, and (2) dial such telephone numbers. The Commission should interpret the definition so as to not apply to ordinary smartphone usage. Part I explains the history of the TCPA, including the current ATDS definition and the FCC's history of applying and interpreting that definition. Part II analyzes how the FCC's incoherent interpretations facilitated a circuit split over the definition's necessary elements. Part III argues that the FCC should resolve the circuit split by declaratory ruling and provide meaningful guidance to affected parties by issuing a coherent and comprehensive interpretation of the ATDS definition.


    Interpreting the ATDS definition poses a dilemma. Different canons of interpretation yield vastly different understandings of which devices are--and which devices are not--ATDSs, but each choice inevitably conflicts with some aspect of the definition's text or the statute's regulatory scheme. These conflicts make interpreting the definition a case study in choosing which problems to live with. This Part provides context for understanding those problems. Section LA explores the TCPA's legislative history, examining the statutory definition of "automatic telephone dialing system" (also called an "autodialer") and the penalties for TCPA violations. Section I.B analyzes the FCC's 2003 Order, which determined that the ATDS definition encompassed predictive dialers. Section I.C examines the Commission's 2015 Declaratory Ruling, highlighting the Ruling's incoherence and breadth.

    1. The TCPA and the ATDS Definition

      In 1990, U.S. telemarketing sales exceeded China's GDP. (20) At $435 billion, this staggering sum represented a four-fold increase from 1984. (21) That increase was driven by technology: computers spearheaded 82 percent of telemarketing campaigns. (22) In particular, automatic dialing systems were used en masse to "make millions of calls every day." (23)

      The cost of this success was America's privacy. Every day, more than eighteen million Americans were called by a telemarketer. (24) Ill-timed automated calls proved an unwelcome, yet constant, interruption in daily life. (25) Because telemarketers programmed their autodialers indiscriminately, often using the dialing equipment to create and dial ten-digit telephone numbers randomly or sequentially, (26) calls were inadvertently placed to emergency services including hospitals, firefighters, and police. (27) Moreover, autodialers would "seize" a recipient's telephone line and not release the line when the recipient hung up, but only after the telemarketer had completed their message. (28) This practice would tie up emergency service lines for extended periods. (29) The never-ending intrusions prompted one senator to declare automated calls "the scourge of modern civilization." (30)

      Finding that American citizens were "outraged over the proliferation of intrusive, nuisance calls to their homes," Congress enacted the TCP A in 1991 to regulate autodialers. (31) The TCP A defines "automatic telephone dialing system" as: "[Equipment which has the capacity--(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." (32) The TCPA prohibited autodialers, making any call placed using an ATDS unlawful, with three exceptions: calls made with the prior express consent of the called party, calls made for emergency purposes, and calls made solely to collect a debt owed to or guaranteed by the United States. (33) "Call," as used within the TCPA, also applies to text messages placed to wireless numbers. (34)

      To enforce this prohibition, the TCPA provides a private right of action for a person unlawfully contacted by an ATDS. (35) The action authorizes $500 in damages for each violation, or up to $1,500 if the violation is knowing or willful. (36) In class actions or cases with multiple violations, damages can add up fast, potentially resulting in astronomical liability. (37) For example, in 2017, an advertising company that ran a one-week telemarketing campaign was found liable for $1.6 billion before getting the damages award reduced on due process grounds in a post-trial motion. (38)

      Such dramatic consequences should only attach to precise and predictable regulatory schemes. But the TCPA's application has been neither precise nor predictable because different interpretations have left organizations without a clear understanding of which devices qualify as ATDSs under the statutory definition. On the contrary:

      The TCPA has become fertile ground for ... lawsuits because class action lawyers are often rewarded with quick settlements, even in cases without any merit, simply because litigation uncertainty and the potential financial exposure resulting from a bad decision are too great a risk for a company to bear.... [T]he major driving force behind...

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