D.C. Circuit Rules FCC Lacks Authority Under TCPA to Regulate Faxes Sent with Recipient’s Consent

Courts FCC TCPA

In a 2-1 split decision, the U.S. Court of Appeals for the District of Columbia Circuit recently ruled that the Federal Communications Commission (FCC) lacks authority under the Telephone Consumer Protection Act (TCPA) to regulate facsimiles sent with the recipient’s consent. Bais Yaakov of Spring Valley et al. v. F.C.C. et al., No. 14-1234 (D.C. Cir. Mar. 31, 2017) (Dkt. No. 1668739). Specifically, the court found that a 2006 FCC Rule (the “Solicited Fax Rule”) that required a sender to include an opt-out notice on faxes sent with the “recipient’s prior express permission”—and which has formed the basis for countless putative TCPA class actions—exceeds the scope of authority given to the FCC under the TCPA. Based on this finding, the court vacated the 2006 FCC Order implementing the rule. Ultimately, the majority was not persuaded by the FCC’s argument that agency action—in this case, the FCC’s requiring opt-out notices on solicited fax advertisements—is permissible so long as Congress had not prohibited the agency action in question.

Shortly after ruling was handed down, FCC Chairman Ajit Pai issued a statement expressing support for the court’s ruling, which he said emphasized “the importance of the FCC adhering to the rule of law.” The recently-appointed Chairman explained further that he had, in fact, “dissented from the FCC decision that the court has now overturned because, as [he] stated at the time, the agency’s approach to interpreting the law reflected ‘convoluted gymnastics.’” Chairman Pai continued, “[g]oing forward, the Commission will strive to follow the law and exercise only the authority that has been granted to us by Congress.”