DC Circuit Opts Out of Flawed FCC Ruling
If you follow developments in TCPA case law, you’ve probably heard by now that the DC Circuit Court of Appeals last week overturned the 2015 FCC Order that had required TCPA opt-out notices on both solicited and unsolicited faxes. The court held that the FCC’s rule was “unlawful to the extent that it requires opt-out notices on solicited faxes.” See Bais Yaakov of Spring Valley v. FCC, et al., Case No. 14-1234 (D.C. Cir.). In fact, the DC Circuit—despite years of FCC guidance, 13 consolidated appeals and more than two dozen lawyers participating in the briefing—seemed to view this as a relatively simple issue of statutory construction: “The text of the Act provides a clear answer to the question presented in this case. . . . Congress drew a line in the text of the statute between unsolicited fax advertisements and solicited fax advertisements. Unsolicited fax advertisements must include an opt-out notice. But the Act does not require (or give the FCC authority to require) opt-out notices on solicited fax advertisements. It is the Judiciary’s job to respect the line drawn by Congress, not to redraw it as we might think best.”
If you are new to the TCPA defense bar, this case may be somewhat perplexing: Why was so much time spent, and ink spilled, on what appears to be a simple issue? And should businesses really rejoice for such a trivial result as no longer having to include an opt-out notice on a solicited fax? The answer is that this was never really about the alleged “harm” caused by the failure to include statutorily compliant opt-out notices on faxes—indeed, many companies included adequate information on their faxes to ensure that recipients could opt out of future communications and still were sued because the notices were not strictly compliant with the language of the TCPA. The battle over opt-out notices is really a battle about class certification, and the Bais Yaakov ruling will make class certification in TCPA fax cases much more difficult. Many courts have held that individualized issues of consent can defeat class certification in TCPA fax cases. TCPA plaintiffs have attempted to avoid this issue by bringing class claims based on the lack of an opt-out notice, regardless of whether consent was provided. Their theory was that the court did not need to consider the individualized issues of consent if the faxes at issue did not have adequate opt-out notices because the opt-out notices were typically applied in a uniform fashion across all faxes, meaning that class certification may be more appropriate. The 2015 FCC Order buttressed this approach by explicitly finding that the TCPA opt-out notices were required on both solicited and unsolicited faxes.
But the DC Circuit has now recognized what many in the TCPA defense bar have said for years: The text of the TCPA does not impose such a requirement, and it does not give the FCC the power to create such a requirement. The DC Circuit’s ruling means that opt-out notices are only required on unsolicited faxes and thus, the individualized issue of consent will once again be front and center in the defense of TCPA class actions.