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TCPA Endgame: Stopping Bad Robocalls Act Seeks to Clarify “Called Party” Definition and End Scourge of Wrong Number TCPA Suits (Sort Of)

H.R. 3375 may soon be the most substantial Telephone Consumer Protection Act TCPA-related piece of legislation to emerge from Congress since 1991—and it looks extremely likely to pass the House.

We’ll break down various elements of the Act—which largely vests authority back in the Federal Communications Commission (FCC) to set the TCPA’s future course—in future posts, but here’s one critical take away to chew on in the meantime—the term “called party” may be about to receive a clear and not-so-business-friendly re-write.

Framing the issue: the TCPA allows calls to be made using regulated technology with the consent of the “called party.” But who is the “called party?” Is it the person the caller is trying to reach? The person that answers the phone? The person that pays for the phone line?

The enigma of “called party” identification is particularly challenging in the recycled cell phone scenario. That’s when a customer provides a cell phone to a business and then changes numbers without alerting the caller. The business attempts to call the customer—seemingly with full consent—but reaches the new subscriber to the phone line. Assuming the business has no notice that the number changed hands, what result?

One could argue—as I often do—that obtaining a new phone number comes with the sticky nuisance of a few calls intended for a former recipient attached to it and that’s totally ok. Who hasn’t moved and received a few pieces of junk mail intended for a former occupant of your new pad? So the way it should work (at least in my mind) is folks obtaining new numbers should inform the callers that the former subscriber can no longer be reached at that number and the calls stop. If not they can sue. Seems pretty simple.

The easy way to accomplish this is to define the TCPA’s phrase “called party” to mean the “expected recipient” of the call. Until a caller is informed the number changes hands they have a very reasonable expectation they can reach their customer on the number so the TCPA affords a complete defense (as Congress intended.) Once the caller is informed the number changed hands, however, the reasonableness of that expectation is eroded and individuals receiving calls can, in all likelihood, convince a jury that future calls were not actually made to an “expected” recipient as the caller knew the number had changed hands.

So there’s the solution. Elegant. Simple. Consistent with statutory language and Congressional intent. No wonder the courts hate it.

After an initial brush with sanity (the first three cases to look at the issue got it right) courts have by and large departed from the “expected recipient” approach and defined the term “called party” to mean the current “subscriber.” They get there through a nickel’s worth of analysis of the statute’s use of the term “called party” in other sections where it plainly refers to the person paying for the phone line. But these courts overlook that Congress was using the phrase differently in different sections of the TCPA and force-harmonizing the terms as used in these different sections has the disastrous effect of imposing strict liability for wrong number calls in a manner Congress never intended. This, of course, has led to a massive increase in TCPA class actions focused on wrong number calling and tens of millions in attorney fee recoveries for lucky consumer lawyers cashing in on these suits.

Setting aside the litigation issues, defining “called party’ to mean the subscriber to the phone line also creates another issue—it forces callers to invade the privacy of their customers in an effort to assure they have the appropriate party’s consent. And this was among the important issue moving the FCC into action back in 2015. (I remember a female colleague of mine asking an FCC Commissioner whether she really needed to assure a business that she had her husband’s permission to provide her phone number to a caller since he paid for her phone line—pretty powerful stuff.)  Accordingly, the FCC found that the “called party” was actually two people –the subscriber to the phone line and the customary user of the phone number. That was a caller could rely on the consent of a person providing a phone number and not just the person paying for a customer’s phone service.

Recognizing that callers would still be caught up in unfair strict liability suits where numbers changed hands without their knowledge, however, the FCC also created a one call safeharbor in such scenarios, creating a miniature good-faith defense and allowing a caller to momentarily rely on the former susbcribers’ consent. In doing so, however, the FCC specifically found that a caller should be able to ‘reasonably rely” on the consent afforded by that prior subscriber—ironically leading to the D.C. Circuit Court of Appeal to set aside the FCC’s entire wrong number framework. In the eyes of the appellate court, a caller’s right to “reasonable rely” on consent cannot be said to end after one call if the call does not connect, etc. So the FCC’s one-call safeharbor was inconsistent with its own observation that a caller can reasonably rely on consent and the whole thing was struck down.

That was something like the SNAP. And since then, we’ve found ourselves in the Endgame—half the law on recycled numbers evaporated and we’re left picking up the pieces trying to determine who the “called party” is and whether callers can rely on the consent of a former subscriber. Some courts say yes. Some say no.

So that brings us to the punchline. Congress appears set to answer the question. In H.R. 3375—the Stopping Bad Robocalls Act—the House proposes to re-define the term called party to specifically adopt the FCC’s now-defunct definition. As the language reads:

The term ‘called party’ means, with respect to a call, the current subscriber or customary user of the telephone number to which the call is made, determined at the time when the call is made.’

So there’s your clarity, I suppose.

But here’s the time-caperesque twist: the amendment would not be effective until the FCC’s new re-assigned number database (which is really just a permanent disconnect database) goes into effect sometime next year. As the SBR Act provides: “this subsection shall apply beginning on the date on which the database described in the Second Report and Order in the matter of Advanced Methods to Tar get and Eliminate Unlawful Robocalls (CG Docket No. 17–59; FCC 18–177; adopted on December 12, 9 2018) becomes fully operational, such that a person may check the database to determine the last date of permanent disconnection associated with a phone number.”

So in the Congressional view of the world (assuming the Act passes), once the database is available to callers—such that there is no longer the risk of unfair strict liability attaching for calls inadvertently but innocently made where a number changes hands—the term “called party” should be defined to mean the folks currently paying for and using the phone.

Ok, fair enough, but until then? Well, Congress is standing down. The SBR Act specifically provides:

Nothing in the amendments made by this subsection shall affect the construction of the law as it applies before the effective date.

So there you have it. Just like with Marvel’s version of time travel—where people can kill past versions of themselves with impunity apparently—Congress intends to impose a future definition of “called party” without impacting the past definition.

But wait a minute. If Congress has to amend the TCPA to adopt the new definition in the future doesn’t that mean that the current definition can’t be what Congress proposes to change the definition to?

I’m dizzy.

More to come.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

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