Fifth Circuit Cites Loper Bright to Strike Down FCC Telemarketing Regulation

The U.S. Court of Appeals for the Fifth Circuit has affirmed a lower court decision striking down a Federal Communications Commission (“FCC”) regulation that interpreted the phrase “prior express consent” in the Telephone Consumer Protection Act (“TCPA”) to mean “written” consent, at least when it comes to so-called “telemarketing” calls.  That decision, in a case called Bradford v. Sovereign Pest Control, relied on Loper Bright’s straightforward proposition that “[c]ourts interpret statutes, no matter the context, based on the traditional tools of statutory construction,” and without deference to an agency’s reading of the law.

Background

The TCPA generally prohibits “robocalls” and “robotexts” that employ either an automatic dialing system or an artificial or prerecorded voice.  One exception to this prohibition, however, is when a “called party” gives “prior express consent.”  Relying on Congress’s broad delegation to “prescribe regulations to implement” the TCPA, the FCC interpreted this consent-based exception in two important ways that seemingly deviated from the statutory text. 

First, the FCC crafted a detailed regulatory definition that required prior consent to be “written.”     

[P]rior express written consent means an agreement, in writing, that bears the signature of the person called or texted that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called or texted advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.  Calls and texts must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes

Second, the FCC carved out its own exception to the “written consent” rule for what it characterized as “non-telemarketing, informational calls,” or those calls made to wireless numbers “by or on behalf of a tax-exempt nonprofit organization, or . . . that deliver[] a ‘health care’ message made by, or on behalf of, a ‘covered’ entity or its ‘business associate.’”  The agency insisted on “flexibility” for this category of autodialed or recorded calls—which would include “calls for political purposes” or “other noncommercial purposes . . . such as school closings,” “debt collection, airline notification[s] . . . [and] bank account fraud alerts”—because there was allegedly public support for drawing the distinction, and commenters had expressed concern about the ability to obtain written consent for these specific kinds of communications.  

This brings us to the facts of Bradford.  The appellant, Radley Bradford, was a consumer who had entered into a service-plan agreement with Sovereign Pest, a Texas pest-control company.  As part of his contract, Mr. Bradford provided Sovereign Pest with a cell-phone number.  For years, Sovereign Pest used that number to make pre-recorded calls to Mr. Bradford, reminding him about annual inspections and the opportunity to renew his service plan.  Eventually, though, Mr. Bradford filed a class-action lawsuit against the pest-control company, alleging a violation of the TCPA.  The district court ruled against him.

Statutory Interpretation in the Loper Bright Era

The Bradford court framed its interpretative inquiry in light of Loper Bright and the Supreme Court’s decision last year in McLaughlin Chiropractic Associates, explaining that “courts must interpret the meaning of Congress’s enacted text according to ordinary principles of interpretation, without deference to an agency’s reading.”  The Circuit also emphasized that the “‘appropriate starting point when interpreting any statute is its plain meaning.’”  (Last summer, I wrote about the importance of McLaughlin and its role in understanding where statutory interpretation will go post-Loper Bright.)

Comparing the text of the TCPA with the FCC’s “written consent” rule, including its distinction between telemarketing and so-called “informational calls,” it was clear the former could not sustain the latter:

“[P]rior express consent” encompasses both oral and written consent for both telemarketing and informational calls.  When Congress enacted the TCPA, “express consent” meant consent that is “directly given, either viva voce or in writing.  It is positive, direct, unequivocal consent, requiring no inference or implication to supply its meaning.” . . .  The statute provides no basis for concluding that telemarketing calls require prior express written consent but not oral consent. . . .  Whether Sovereign Pest’s pre-recorded calls to Bradford qualif[ed] as telemarketing or informational calls, those calls required only prior express consent from Bradford.

Moreover, looking to the facts, the Circuit found little reason to doubt Mr. Bradford’s provision of consent.  He had voluntarily provided his cell-phone number when agreeing to his service-plan agreement.  He never contemporaneously objected to the calls he received and instead used those calls as opportunities for scheduling annual inspections and renewing his contract with Sovereign Pest.  And there could be no ground for casting his consent as somehow merely implicit, as opposed to express.

What Comes Next?

The Fifth Circuit’s decision in Bradford is yet another example of how statutory interpretation in the administrative-law context is working with Chevron deference gone.  Judges are again focused on the objective application of interpretative canons that focus on original public meaning and common-sense readings of the law.  Agencies like the FCC can longer garner special solicitude when courts evaluate the validity of their regulations.  As I explained several months ago, this means “[f]ederal agencies are now more firmly subject to the rule of law.  They must operate within clear bounds, and courts must ensure those bounds are respected.”