Cases & Deals

SiriusXM Radio prevails before D.C. Circuit in challenge to TCPA order

Client(s) Sirius XM Radio Inc.

On March 16, 2018, the D.C. Circuit unanimously ruled in favor of Jones Day’s client Sirius XM Radio Inc. in its challenge to the Federal Communications Commission’s order interpreting the Telephone Consumer Protection Act.

The TCPA restricts the use of automatic telephone dialing systems, a term defined to include telephone equipment that has the capacity to store or produce numbers to be called, using a random or sequential number generator. In 2015, the FCC interpreted "capacity" to include the equipment’s potential as well as its present abilities. Further, it failed to provide clear guidance about what kinds of functions a telephone must have the capacity to perform in order to constitute an ATDS. SiriusXM and a group of other challengers challenged the FCC’s Order before the D.C. Circuit.

The D.C. Circuit vacated the FCC’s Order. It first ruled that the Commission’s "expansive interpretation of 'capacity'" was unreasonable. Under that interpretation, every smartphone would qualify as an ATDS, because every smartphone would have the potential to receive software upgrades that enable it to perform the necessary functions—an untenable result. The D.C. Circuit also ruled that the Order’s interpretation of the functions of an ATDS “falls short of reasoned decisionmaking.' The FCC’s Order, the D.C. Circuit explained, points in two directions; some passages suggest that the device itself must have the ability to generate random or sequential numbers, while others suggest that it is enough that the device can call from a database of telephone numbers generated elsewhere. The court held that "the Commission cannot, consistent with reasoned decisionmaking, espouse both competing interpretations in the same order."

For years, abusive class-action lawsuits have been brought against all sorts of legitimate businesses, seeking billions of dollars in statutory penalties for ordinary phone calls. Now, the overbroad, vague administrative FCC interpretation on which those abusive lawsuits rest has been set aside. The D.C. Circuit’s decision should have a profound effect on TCPA litigation throughout the country.

Jones Day represented SiriusXM before the D.C. Circuit, and argued the case on behalf of the coalition of petitioners who challenged the FCC’s order.

ACA International v. U.S. Federal Communications Commission, No. 15-1211 (D.C. Cir.)