District Court Judge Grants Stay of TCPA Action Pending Appeal of FCC Ruling

Last week, a District Court Judge for the United States District Court for the Eastern District of Wisconsin granted a motion to continue the stay of a Telephone Consumer Protection Act (TCPA) lawsuit, pending resolution of the various appeals challenging the Federal Communications Commission’s (FCC) July 10, 2015 Declaratory Ruling and Order.

The Court had previously granted Performant Technologies, Inc.’s (Performant) motion to stay the matter pending a ruling from the FCC on petitions regarding the TCPA. The FCC issued its ruling on July 10, 2015.  Multiple appeals of that ruling are currently pending.  Performant brought a motion to continue the stay pending the outcome of those appeals; the Court granted that motion.

In the Order granting the stay, the Honorable Rudolph T. Randa discussed two key elements of the ongoing appeals and predicted both good news and bad news for the ARM industry.

First, on the issue of the FCC Ruling on the term “capacity” in the definition of “automatic telephone dialing system,” Judge Randa quoted from the dissenting positions of FCC Commissioners Michael O’Rielly and Ajit Pai and then commented: “Thus, it seems to the Court, as it seemed to the dissenting Commissioners, that the FCC majority’s interpretation of the term “capacity” contradicts the plain language of the statute. If so, then the FCC’s ruling on this issue is not entitled to deference on appeal.”

However, Judge Randa was not as optimistic on the on the number reassignment/safe harbor issue outlined in the July 10 Ruling. On this issue Judge Randa wrote: “Performant pins its hopes on the expectation that the appellate courts, particularly the Seventh Circuit, will overrule the FCC. This seems unlikely on the number reassignment/safe harbor issue. The FCC split 3-2 on this issue, but the FCC majority expressly agreed with the Seventh Circuit that “the TCPA nowhere indicates that caller intent is relevant to the definition of ‘called party.’”FCC Ruling at ¶ 78 (citing Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 639-40 (7th Cir. 2012). Put another way, the Seventh Circuit has already held that consent to call a given number must come from its current subscriber,” Soppet at 641, and three of the five FCC Commissioners generally agree with that conclusion, subject to the limited safe harbor discussed herein.”

insideARM Perspective

It is a positive development for the ARM industry that a United States District Court Judge granted a stay of a TCPA action pending the result of the pending appeals of the July 10, 2015 FCC Ruling. Additionally, the court’s analysis of the “capacity” issue is encouraging.

However, it was disappointing to read the court’s analysis of the reassignment/safe harbor issue.  If that interpretation is confirmed on appeal calls to reassigned cell phone numbers will continue to be a boon to Plaintiff’s attorneys and a thorn in the side of the ARM industry.