## Facts

- The Telephone Consumer Protection Act of 1991 (TCPA) restricts certain calls and texts to cell phones made using an automatic telephone dialing system (ATDS) or an artificial/prerecorded voice without the “prior express consent” of the called party.
- The TCPA defines an ATDS as equipment with the capacity to store or produce numbers to be called using a random or sequential number generator and to dial such numbers.
- In 2015, the Federal Communications Commission (FCC) issued a Declaratory Ruling and Order interpreting, among other topics, (1) the scope of “capacity” within the ATDS definition, (2) liability for calls to reassigned numbers, (3) how consumers may revoke consent, and (4) a limited exemption for certain healthcare-related calls.
- Industry groups and regulated callers filed consolidated petitions for review under the Hobbs Act, challenging key aspects of the 2015 Order as unlawful under the TCPA and arbitrary or capricious under the Administrative Procedure Act (APA).

## Issues

1. Whether the FCC reasonably interpreted “capacity” in the ATDS definition, including the extent to which potential functionalities could make devices (including smartphones) ATDSs.
2. Whether the FCC’s framework for reassigned numbers—particularly a “one-call” safe harbor from liability—was reasonable and supported by reasoned decisionmaking.
3. Whether the FCC acted lawfully in permitting consumers to revoke prior express consent “through any reasonable means.”
4. Whether the FCC permissibly limited a TCPA exemption for certain healthcare-related calls notwithstanding HIPAA.

## Decision

- The court granted the petitions in part and denied them in part.
- The court set aside the FCC’s 2015 interpretation of the ATDS definition as unreasonably expansive and inadequately explained.
- The court vacated the FCC’s treatment of reassigned numbers, including the “one-call” safe harbor, as arbitrary and capricious and unsustainable as a whole.
- The court upheld the FCC’s rule allowing consent revocation by “any reasonable means” as not arbitrary or capricious.
- The court upheld the FCC’s limited healthcare-related exemption as reasonable and not precluded by HIPAA.

## Legal Principles

- An agency interpretation is unlawful under the APA if it lacks reasoned decisionmaking, including when it is internally inconsistent or fails to give meaningful guidance about the scope of regulated conduct.
- The FCC’s expansive view of ATDS “capacity” was invalid where it risked sweeping ordinary smartphone use into TCPA liability and the agency failed to coherently delineate what functionalities trigger ATDS status.
- The FCC may interpret “called party” in the TCPA to refer to the current subscriber or customary user rather than the caller’s intended recipient, but the agency must rationally justify any safe harbor or liability framework for reassigned numbers.
- A consent revocation rule permitting “any reasonable means” is permissible where it prevents callers from unilaterally dictating exclusive revocation procedures and preserves case-specific disputes over whether a method was reasonable.
- HIPAA does not bar the FCC from structuring TCPA exemptions; the FCC may adopt a limited healthcare exemption consistent with TCPA consumer-protection purposes.

## Conclusion

The D.C. Circuit invalidated major portions of the FCC’s 2015 TCPA order by vacating the agency’s expansive ATDS interpretation and its reassigned-number liability regime, while leaving in place flexible consumer revocation rights and a constrained healthcare-call exemption.


ACA Int'l v. FCC, 885 F.3d 687 (D.C. Cir. 2018)