Comments to FCC re: Automatic Dialing System

Dear Ms. Dortch:

The American Bankers Association (ABA) appreciates the opportunity to comment on theFederal Communications Commission’s (Commission) Public Notice released on October 3,2018 (Public Notice). The Public Notice seeks comment on which dialing equipment constitutesan “automatic telephone dialing system” under the Telephone Consumer Protection Act of 19913(TCPA), in light of the September 20, 2018, decision by a three-judge panel of the U.S. Court ofAppeals for the Ninth Circuit in Marks v. Crunch San Diego, LLC.

I. Summary of Comment

ABA supports the Commission’s ongoing effort to interpret and apply the TCPA’s definitionsconsistent with the statute’s text and congressional intent. Congress passed the TCPA in 1991primarily to combat abusive telemarketers that used random and sequential algorithms togenerate numbers used for mass calling campaigns, often tying up emergency and public safety-related phone lines by indiscriminately calling numbers. To achieve these purposes, Congress imposed restrictions on calls made from an “automatic telephone dialing system,” commonlyknown as an “autodialer.” Congress defined an autodialer as “equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential numbergenerator; and (B) to dial such numbers.” Significantly, an autodialer uses a random orsequential algorithm to generate numbers without regard to whether the numbers generated havebeen assigned to individual consumers, emergency services, healthcare providers, or publicsafety agencies.

Congress’ intent in defining an autodialer in this manner is clear: to restrict the use of dialingequipment that creates numbers at random or sequentially (i.e., where each number dialedfollows the last one in numeric order). Congress did not intend to restrict technologies thatmerely facilitate the efficient dialing of numbers stored in databases compiled for a specificpurpose, such as lists of numbers of a business’ existing customers with whom the businessneeds to communicate. A dialing technology that calls stored lists of numbers is not anautodialer, because it does not meet the statutory test: the technology does not randomly orsequentially generate numbers to be called.

In issuing its decision in Marks, the Ninth Circuit panel interpreted the statutory definition of anautodialer in a manner that is inconsistent with the TCPA’s text and legislative history. TheMarks panel held that a device that calls from a stored list of numbers is an autodialer even ifthose numbers are not generated using a random or sequential number generator. Under Marks,an ordinary smartphone is an autodialer. This conclusion reflects “a reading of the statute [that]subjects not just businesses and telemarketers but almost all our citizens to liability for everydaycommunications.”

The Commission should disregard the Marks panel decision because it conflicts with thedecision by the U.S. Court of Appeals for the District of Columbia Circuit in ACA Internationalv. FCC9—a decision the Commission is obliged to follow—and because Marks is inconsistentwith the text of the TCPA and Congress’ intent in passing the law. Instead, the Commissionshould grant the Petition for Declaratory Ruling submitted by the U.S. Chamber of Commerce,ABA, and 16 other groups that asks the Commission to confirm, consistent with the TCPA’stext, (a) that to be an autodialer the calling equipment must use a random or sequential numbergenerator to store or produce telephone numbers and to dial those numbers without humanintervention; and (b) that only calls made using such actual autodialer capabilities are subject tothe TCPA’s restrictions (the Petition).

II. The Commission Is Precluded from Following the Ninth Circuit’s Panel Decisionin Marks When Issuing Interpretations of the Statutory Definition of anAutodialer

a. The Commission is Obliged to Follow the D.C. Circuit’s Decision in ACAInternational v. FCC

It is undisputed that Congress provided the Commission with broad authority to “prescriberegulations to implement the requirements” of section (b) of the TCPA, which imposesrestrictions on the use of an autodialer. Consequently, the Commission is well within itsauthority to determine the scope of dialing equipment that falls within the statutory definition ofan autodialer.

It is also well-established that a federal agency, such as the Commission, must act consistentlywith the decision of a reviewing court. On March 18, 2018, the U.S. Court of Appeals for theDistrict of Columbia ruled, in ACA International v. FCC, on the challenges brought against theCommission’s Declaratory Ruling and Order issued on July 10, 2015 (2015 Order). Because that decision resulted from the court’s review of the 2015 Order, the Commission is obliged tofollow it when issuing new interpretations of the TCPA.

In contrast, the Commission is not required to follow the Ninth Circuit’s panel decision inMarks. That decision did not review a Commission ruling, as in ACA International, but simplywas the court’s interpretation of the autodialer definition in the context of the plaintiff’s claimthat a fitness company used an autodialer to send text messages to the plaintiff in violation of theTCPA. Moreover, the panel decision in Marks may not reflect the ultimate disposition of thatdispute; the defendant has petitioned for en banc review of the decision. Thus, at a minimum, itis premature to give any weight to the Marks panel decision.

b. The Ninth Circuit’s Marks Panel Decision Conflicts with the D.C. Circuit’sDecision in ACA International

As the Commission suggested in its Public Notice, the Marks court’s interpretation of thestatutory definition of an autodialer conflicts with the D.C. Circuit’s decision in ACAInternational. Because the Commission must follow ACA International, it cannot followMarks.

In Marks, the Ninth Circuit panel held that the TCPA’s definition of an autodialer “includesdevices with the capacity to dial stored numbers automatically” even if those numbers are notgenerated using a random or sequential number generator. Significantly, an ordinarysmartphone has the capability to dial stored numbers automatically, as the Commission found inits 2015 Order.

The Marks panel’s holding is inconsistent with the D.C. Circuit’s decision in ACA International.In ACA International, the D.C. Circuit struck down the Commission’s past interpretations of thestatutory definition of an autodialer in part because those interpretations impermissibly expandedthe scope of an autodialer to include “every smartphone.” The court concluded that an interpretation that captures the “most ubiquitous type of phone equipment” is “utterlyunreasonable” because it is “incompatible” with Congress’ intent when passing the TCPA toaddress abusive telemarketers. The Commission cannot follow a decision whose holding isdirectly counter to a decision the Commission is obliged to follow.

c. The Ninth Circuit’s Marks Panel Decision Is Inconsistent with the TCPA’sText and Legislative History

The statutory definition of an autodialer is clear and unambiguous: a device must “us[e] arandom or sequential number generator” for the device to be an autodialer. The Marks courtimpermissibly concluded that a device can be an autodialer without generating numbers inrandom or sequential order. The Commission should disregard the Marks court’s erroneousconclusion when issuing interpretations of the TCPA.

As stated earlier, in the TCPA, Congress imposed restrictions on calls made from an“autodialer,” which it defined as “equipment which has the capacity- (A) to store or producetelephone numbers to be called, using a random or sequential number generator; and (B) to dialsuch numbers.” The structure of this provision compels one to read the phrase “random orsequential number generator” as modifying both “store” and “produce” in the antecedent phrase.Congress placed a comma between “to store or produce telephone numbers to be called” and“using a random or sequential number generator.” Under the “punctuation canon,” the placementof the comma indicates that Congress intended for the phrase that comes immediately after thecomma (“using a random or sequential number generator”) to modify the entirety of the phrasethat precedes the comma (“to store or produce telephone numbers to be called”). As a result, a device must perform at least one of two functions to be an autodialer: the device must “store”numbers that were randomly or sequentially generated or “produce” such numbers. We agreewith Chairman Pai that if a device cannot perform these functions—to store or produce numbersin random order or in sequential order—it cannot be an autodialer. The Marks court disregardsthe punctuation canon in concluding that the phrase “using a random or sequential numbergenerator” modifies only “produce” and not “store.”

The legislative history of the TCPA further demonstrates that Congress intended to restrict theuse of dialing equipment that creates numbers at random or sequentially—and not equipmentthat merely calls stored lists of numbers. Congress passed the TCPA primarily to control theshifting of telemarketers’ advertising costs to consumers by the use of random and sequentialgenerators to run mass calling campaigns. These calling campaigns also tied up emergency andpublic safety-related phone lines by indiscriminately calling numbers.

Notably, Congress found that the telemarketers perpetrating these harms “often program theirsystems to dial sequential blocks of telephone numbers, which have included those of emergencyand public service organizations.” Dialing equipment with this ability to generate numbers randomly or sequentially caused the harms that Congress sought to address, and Congressimposed restrictions on this specific equipment. Congress did not identify, or seek to regulate,informational calls by businesses to stored lists of customer numbers.

Conclusion

ABA continues to support the Commission’s efforts to issue interpretations of the TCPA that areconsistent with the statute’s text and congressional intent. We urge the Commission to disregardthe Marks panel’s interpretation of the statutory definition of an autodialer, which is inconsistentwith the text of the TCPA, the intent of Congress, and the D.C. Circuit’s decision in ACAInternational.

Sincerely,

Jonathan Thessin
Senior Counsel, Center for Regulatory Compliance