Phone numbers change, but the risk of TCPA liability remains: The state of the law on reassigned numbers post-ACA International

BY Julianna Malogolowkin

The Telephone Consumer Protection Act (TCPA) requires a caller to obtain prior express consent from a “called party.” This seems straightforward enough in a world where telephone numbers are permanently assigned to a consumer. In reality, however, over 35 million phone numbers are reassigned to a new subscriber every year. Can businesses argue that the consent they received sticks with the phone number? If not, how can they know when a number has been reassigned? This post outlines FCC and D.C. Circuit guidance on these issues, and offers an analysis of future solutions proposed by the FCC to mitigate potential TCPA liability stemming from calls placed to numbers that have been reassigned to a new subscriber.

“Called party”

Under the TCPA, businesses are required to obtain express consent from “called parties.” Until recently, the FCC had not defined “called party,” and there were debates as to whether it refers to the intended recipient of the call or the current subscriber. The FCC’s Declaratory Ruling from 2015 comprehensively addressed the question of whether a caller placing a call subject to the TCPA to a number reassigned from a consumer who gave consent is liable under the TCPA. In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 (2015 Declaratory Ruling), 30 FCC Rcd. 7961, 7999 ¶ 71 (2015). The FCC clarified that the “called party” is the current subscriber and not the intended recipient of the call. Id. (“[T]he TCPA nowhere indicates that caller intent is relevant to the definition”). See also Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1250-52 (11th Cir. 2014); Soppet v. Enhanced Recovery Co., 679 F.3d 637 (7th Cir. 2012). The D.C. Circuit recently upheld the FCC’s interpretation of the term in ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018).

Defining “called party” as the current subscriber only scratches the surface of these issues and leaves businesses vulnerable to potential liability despite good faith efforts to obtain consent. The result is a great deal of uncertainty.  For instance, does a caller who misdials or calls a number he has no reason to believe has been reassigned risk liability under the TCPA? How can diligent callers learn whether numbers have been reassigned?

The Old Safe Harbor

Faced with the possibility of a strict liability structure for calls made to reassigned numbers even in good faith, the FCC crafted a limited safe harbor to protect a single call or text message sent post-reassignment. The FCC explained that callers “should be able to initiate one call after reassignment as an additional opportunity to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber.” 30 FCC Rcd. at 7999, 8009 ¶¶ 72, 90. Notably, while the D.C. Circuit upheld the FCC’s definition of “called party,” it invalidated this safe harbor (and the 2015 Declaratory Order’s treatment of reassigned numbers as a whole) in ACA International, finding that it was an “arbitrary and capricious” adoption of the FCC’s “reasonable reliance” approach to interpreting prior express consent. 885 F.3d at 692. Specifically, the Court asked, “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?” Id. at 707.

Preventing Liability and Moving to a New Safe Harbor

There have been no subsequent cases or FCC policies interpreting the ACA International ruling or the Notice of Proposed Rulemaking. Therefore, given the uncertainty of the current climate, a caller must have practices and protocols to help identify reassigned numbers. In its 2015 Declaratory Order, the FCC listed a number of best practices to reduce the likelihood of a caller calling a reassigned number. Some examples of these practices include better protocols with customer service agents to maintain accurate contact information, proactively sending periodic requests to customers to update their contact information, and utilizing an autodialer’s ability to identify disconnected numbers using “triple tones.” 30 FCC Rcd. at 8007-08 ¶ 86. The FCC also suggested that parties could agree that the consenting party has an obligation to notify the caller of any number reassignment. Id. While a failure by the consenting party to satisfy his obligation would not preserve consent for TCPA purposes, the caller would have an opportunity to pursue other legal remedies against the consenting party for breaching their agreement. Id. at ¶ 86 n.302.

While these policies would help to reduce uncertainty with regard to reassigned numbers, they are not foolproof, and businesses risk potential liability despite good faith adherence to the FCC’s suggested practices. As a result, the FCC is exploring the adoption of a reassigned numbers database. Prior to the ACA International ruling, the FCC had issued a Second Notice of Inquiry to assess potential reassigned number database models. See 32 FCC Rcd. 6007, 6013 ¶¶ 16-19 (2017). In light of the D.C. Circuit’s endorsement, the database model, and invalidation of the safe harbor provision and reassignment rule, the FCC published a Second Further Notice of Proposed Rulemaking (FNPRM) on April 23, 2018. See Advanced Methods to Target and Eliminate Unlawful Robocalls, 83 Fed. Reg. 17631 (proposed Apr. 23, 2018); ACA International, 885 F.3d at 709 (stating that a database model has “greater potential to give full effect to the Commission’s principle of reasonable reliance.”).

The FNPRM focuses on two main issues: the creation of a new safe harbor and the implementation of one of three proposed database models. On the question of a safe harbor provision, the FCC asks how the ACA International decision might impact its ability to establish a safe harbor, and whether, and under what circumstances, a safe harbor should be adopted. 83 Fed. Reg. 17631 at ¶ 31. Specific questions posed by the FCC include how frequently a caller would need to check the database, and what kind of liability would be protected by this safe harbor.

With regard to the creation of a database, the FCC asks commentators to consider three models of reporting by voice service providers: 1) mandatory reporting to a single FCC database administered by a third party; 2) mandatory reporting to one or more commercially available data aggregators; or 3) voluntary reporting to one or more commercially available data aggregators. Id. at ¶ 32. The FNPRM focuses on three practical issues; namely, what information should be included and would be necessary for callers who choose to use a database, how to ensure that information is reported to the database, and how to make the information available to interested callers. Id. at ¶ 8. The comment period for the FNPRM closes June 7, 2018.

Going Forward

As TCPA cases continue to increase across the country, businesses making calls subject to the TCPA need to be aware of their potential liability and need to implement compliance policies as soon as possible that include policies around reassigned numbers. While the FCC is indicating that it intends to adopt a reassigned numbers database for callers to use to minimize their liability, significant practical questions remain with regard to both this potential prevention tool and to the possibility of a safe harbor. In this interim phase, that is from the time of the D.C. Circuit’s invalidation of the 2015 Declaratory Order’s treatment of reassigned numbers to the time when the FCC clarifies the issue by an updated Order, or by the announcement of a database, callers are advised to assess their current practices and to adopt as many preventative measures as possible to avoid potentially costly liability.