By Bradley Miller, NADA Director of Legal and Regulatory Affairs

On June 25, 2020, the Federal Communications Commission (“FCC”) issued a Declaratory Ruling (“Ruling”) relating to text messages, autodialers, and the Telephone Consumer Protection Act (TCPA). Specifically, the Ruling holds that because a specific “peer-to-peer” (“P2P”) texting platform was “not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions on calls and texts to wireless phones.” The following analysis by Mac Murray and Shuster attorney Michele Shuster provides some further detail on the Ruling and “P2P” platforms: Text Messaging Restrictions Overview.

While this Ruling is directionally correct, dealers should be cautious in placing too much reliance on it because it addresses the unique nature of the P2P platform at issue, not the nature of text messages sent from autodialers generally, or the consent required for “autodialed” text messages. Dealers should review their systems and consult their service providers to determine the exact contours of the equipment and platform they use to send text messages, and should consult their attorney to determine whether the Ruling may be relevant to their specific equipment or platform, or whether there may be P2P platforms available that could fall under auspices of the Ruling.

The following is a brief reminder to dealers of the general rules in this area (note that this is an abbreviated overview of a complicated and fluid legal area):

Before sending a text message using an “Automated Telephone Dialing System” (“ATDS” or “autodialer”), dealers must obtain consent from the recipient under the TCPA. If it is a marketing text, then the consent must be in “writing” (see here for more details). The important question therefore is – “what is an ATDS?”

In 2015, the FCC issued a broad and controversial order basically holding that any equipment or platform that has the “capacity” to automatically dial and send text messages is an ATDS or “autodialer.” The problem with this is that almost all equipment and platforms technically have the “capacity” to automatically dial/text (even your smartphone), and therefore this 2015 Order means that almost any text message no matter how it is sent could be (at least arguably) “autodialed.” Violations of the consent requirements for text messages can therefore give rise to a private right of action with statutory damages of up to $1,500 per message. This broad interpretation is largely why we have seen an explosion in recent years in abusive TCPA litigation.

The 2015 FCC interpretation of autodialer has been rejected by some courts, including a 2018 D.C. Circuit decision that directed the FCC to issue a rule revising the 2015 Order. However, other courts have since endorsed this broad interpretation, and while the FCC has sought comments on a rulemaking (NADA submitted extensive comments), as of today, the FCC has not yet issued a revised rule.

Again, the June 25th Ruling holds that the specific P2P platform at issue is not an ATDS because it does not have the capacity to autodial, however it does not mean that dealers can avoid the need to obtain consumer consent simply by manually dialing a text message if their equipment or platform is otherwise an ATDS.

For now, dealers should consult their attorneys for details about their specific systems and duties, and what impact, if any, the Ruling could have on those systems. NADA will provide an update to dealers if and when the FCC issues its rule revising the interpretation of autodialers under the TCPA.

Note: This is guidance only and is not legal advice. Dealers should consult their attorney about the subject matter discussed herein.

Posted by NADA

National Automobile Dealers Association