WASHINGTON—As the Supreme Court prepares to review the constitutionality of a provision of the Telephone Consumer Protection Act (TCPA) later this year, a new court ruling in Gadelhak v. AT&T Services, Inc. has held a system that does not store or produce numbers, using a random or sequential number generator, cannot be classified as an automatic telephone dialing system (ATDS, or "autodialer") under the TCPA.
In the new decision from the U.S. Court of Appeals for the Seventh Circuit, the court determined that devices that merely store numbers to be dialed are not covered by the TCPA, NAFCU noted in its analysis.
Following the D.C. Circuit court's decision in ACA International v. FCC, which invalidated the Federal Communications Commission's (FCC) definition of autodialer, the industry has seen an uptick in lawsuits related to the issue.
NAFCU noted it has long held that equipment should only be subject to prohibitions under the TCPA if it has the capacity to dial numbers without human intervention
In the lawsuit against AT&T Services, the court also found that the FCC's 2003 and 2008 predictive dialer rulings were invalid. The court noted that a broad interpretation would be at odds with the narrow plain language of the TCPA. This follows the Third and Eleventh Circuits’ rejection of the broad interpretation of an autodialer in Marks v. San Diego Crunch, creating a split among the courts.
CUNA’s Action
Meanwhile, nearly three years have passed since CUNA submitted its petition for Telephone Consumer Protection Act clarity with no action, CUNA and all 35 state CU leagues wrote to the FCC. Since then, the organizations note, judicial interpretations surrounding the TCPA have become increasingly more contradictory.
CUNA and leagues have called for clarity from the FCC since its 2015 TCPA ruling, which has led to uncertainty over credit unions being able to contact members with important account information without being exposed to legal action.
CUNA’s petition, submitted in September 2017, asked the FCC to clarify the TCPA applicability to information calls made to a wireless phone by either:
- Adopting an establishing business relationship (EBR) exemption from the prior consent requirement for credit union informational calls and text messages to cell phones; or alternatively
- Exempting credit union information calls or texts from the prior consent requirement if they are in fact free to the called party under the called party’s wireless plan
‘Antiquated and Unfair’
“The different treatment of informational calls to cell phones and landlines is antiquated, unfair, and fails to reflect how the vast majority of consumers communicate today. Adoption of either of the Petition’s proposed exemptions would restore the balance that Congress sought to achieve between consumers’ privacy interests and the legitimate interests of businesses to communicate with their consumers,” the letter reads. “With the uncertainty stemming from a confusing patchwork of contradictory court interpretations continuing to threaten credit unions’ legitimate business obligations to inform members, the need for the Commission to act is immediate. Accordingly, we urge the FCC to promptly grant the Petition.”
The letter also highlights the relationship that exists between credit unions and member-owners which spawns a variety of communications, including timely financial information to governance and financial education.
“Members welcome and expect this information. When a credit union conveys such information to a member at her home over a landline connection, the call does not require the member’s prior consent,” the letter reads. “If the member, however, takes that same call at home on a cell phone, the rules are completely different.”