Citing Harm to Small Business, Coalition Urges Vacating FCC's Robotext Order

Americans “detest” calls they didn’t ask for, but the Insurance Marketing Coalition’s challenge of the FCC’s Dec. 18 order implementing rules under the Telephone Consumer Protection Act to target and eliminate illegal robotexts (see 2312220059) “is not a case about unsolicited calls,” according to the coalition’s opening brief Wednesday (docket 24-10277) in the 11th U.S. Circuit Appeals Court.

Instead, the challenge attacks the FCC’s “misguided efforts to make it harder for people to receive calls about things like insurance rates that they want, and have expressly asked, to receive,” the opening brief argues. The coalition wants the order vacated on grounds that it exceeds the FCC’s statutory authority and was adopted “without observance of procedure required by law.” The order imposes several measures, including codifying that the national do not call registry’s protections cover unlawful text messages.

Under the TCPA, a caller generally must obtain prior express consent before placing an automated call to a mobile number, the brief said. For decades, courts and the FCC have interpreted prior express consent “in a way that allows comparison shopping websites to quickly and efficiently connect comparison shoppers with the businesses best positioned to meet their needs,” it said.

That framework has been beneficial for small businesses, such as local insurance firms and handyman services, “because it has provided an inexpensive way to reach new customers and compete with larger, more sophisticated rivals,” said the brief. Comparison shoppers have benefited as well, “due to the broader range of choices and better matches the consent rules have made possible,” it said.

The FCC’s order “discards that longstanding framework,” said the brief. It's replaced “with a rigid scheme that will reduce consumer choice, drive small businesses from the market, and devastate many companies that partner with and rely on comparison shopping websites to connect with potential customers,” it said. The order also singles out marketing calls for additional regulation, based solely on the content of the message shared on the call, “even though the TCPA does not distinguish between marketing and nonmarketing calls in this context,” it said.

The order redefines the TCPA’s meaning of prior express consent for marketing calls, and only marketing calls, to encompass two additional elements, said the brief. First, consumers may provide consent to marketing calls only on a one-to-one basis, requiring consumers to separately consent to each business that might later contact them, it said. Second, consumers may consent to only marketing calls that are logically and topically related to the website that solicits the consent, it said. That’s so “even if the website expressly informs the consumer about the subject of the call and the consumer expressly asks to receive it,” it said.

Those additional requirements exceed the FCC’s authority under the TCPA, the brief alleges. They also violate the First Amendment, and are arbitrary and capricious under the Administrative Procedure Act, it added.

The order interprets prior express consent “in a way that conflicts with the TCPA," said the brief. It gives prior express consent different meanings depending on the nature of a call, in violation of the rule that agencies must interpret the statute consistently, it said. It “compounds that error” by imposing requirements that go well beyond the ordinary meaning of prior express consent, it said.

The order violates the First Amendment “by applying content-based discrimination against commercial marketing calls,” said the brief. The U.S. Supreme Court invalidated another part of the TCPA on that basis in its 2000 decision in Barr v. American Association of Political Consultants, “and the same reasoning applies here,” it said. Even if addressed under intermediate scrutiny, the order violates the First Amendment because the FCC “has failed to show that its additional consent requirements would serve a substantial interest and are not more extensive than necessary.”

The order “flunks” the APA’s requirement for "reasoned decisionmaking," said the brief. Its additional consent requirements “are not supported by the record,” and it fails to “meaningfully respond” to comments from the coalition and others, “including proposals for more narrowly tailored alternatives,” it said. The order also doesn’t account “for the adverse effects its new restrictions will have on small businesses.”

The coalition recognizes that unwanted calls “are a genuine problem” that the FCC may address through “reasonable and constitutional regulations,” said the brief. But as the Supreme Court has emphasized, rulemaking authority “is not a blank check,” it said. Agencies have limits on their power and may not rewrite clear statutory terms to suit their sense of how a statute should operate, it said. Nor can agencies implement content-based restrictions on speech “unless they are able to satisfy strict scrutiny,” it said.