The COVID-19 pandemic has impacted nearly every facet of society in unpredictable ways, and the laws and regulations governing calls and text messages are no exception. The Federal Communications Commission (FCC) issued a recent declaratory ruling clarifying when calls and text messages relating to COVID-19 are permissible under the TCPA’s “emergency purposes” exception, but most businesses will not be able to rely on that exception. In certain states, COVID-19 state-of-emergency declarations have triggered widespread restrictions on telemarketing. In non-COVID-19 news, debate continues over what constitutes an “automatic telephone dialing system” (ATDS) under the TCPA, and — in a surprising turn of events — the 2nd U.S. Circuit Court of Appeals has joined the 9th Circuit in adopting a broad definition.
FCC Narrowly Interprets TCPA’s “Emergency Purposes” Exception: On its own motion, the FCC issued a declaratory ruling on March 20, 2020, clarifying the TCPA’s “emergency purposes” exception in the wake of COVID-19. The TCPA’s “emergency purposes” exception permits callers to place automated calls and text messages to cell phones without consent when the calls are “necessary in any situation affecting the health and safety of consumers.” The FCC’s recent ruling clarified that the current pandemic constitutes an imminent health risk to the public, but nevertheless declared that only certain calls or text messages made by certain callers qualify for the TCPA’s emergency purposes exception. To qualify for the exception: (1) the caller must be a hospital, healthcare provider, state or local health official, or other government official; and (2) the content of the call or text message must be solely informational and directly related to the imminent health or safety risk arising out of the COVID-19 outbreak. Advertisements for COVID-19-related supplies, for example, would not qualify.
Emergency Declarations Trigger Telemarketing Restrictions in Certain States: The COVID-19 pandemic has led nearly every U.S. governor to declare a state of emergency. In states such as New York and Louisiana, those declarations have an unanticipated consequence: they trigger telemarketing restrictions for callers doing business in those states. In New York, it is unlawful to engage in “unsolicited” telemarketing during a state of emergency. Under New York law, a telemarketing call is not “unsolicited” if it is made in response to a request by a customer or in connection with an established business relationship. Louisiana similarly prohibits “telephone solicitation” — i.e., telemarketing calls — during a state of emergency, with several exceptions. As with New York law, the Louisiana law permits telemarketing calls in response to a customer’s request and in connection with an established business relationship. The law also clarifies that calls in connection with an existing debt or contract, calls on behalf of a nonprofit organization, market research calls, and political calls are permissible.
Surprising 2nd Circuit Interpretation of ATDS: McGuireWoods reported last month that decisions by the 7th and 11th U.S. Circuit Courts of Appeals had created a lopsided circuit split over what constitutes an ATDS. The 2nd Circuit’s April 7, 2020, ruling in Duran v. LaBoom Disco, Inc., which joins the 9th Circuit in broadly interpreting ATDS, has now made that split less one-sided. The TCPA defines ATDS as equipment with the capacity (a) “to store or produce telephone numbers to be called, using a random or sequential number generator”; and (b) “to dial such numbers.” In Duran, the 2nd Circuit found that the first requirement may be satisfied if a dialing system stores numbers, even if those numbers are produced by a non-random or non-sequential number generator. The court found that the second requirement — dialing numbers without human intervention — may be satisfied even if a person must click a button to initiate the text messaging campaign. The broad ATDS definition adopted in Duran was surprising in light of the 2nd Circuit’s narrow ATDS ruling in 2018 in King v. Time Warner Cable Inc.. In King, the 2nd Circuit narrowly interpreted the definition of ATDS by focusing on the term “capacity,” but did not reach the issue of random or sequential number generation resolved by Duran.
McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial coronavirus-related business and legal issues.