On the final business day before it was to go into effect, the FCC’s One-to-One Consent Rule, which redefines consent under the Telephone Consumer Protection Act, was delayed for one year by FCC order. Minutes later, the new rule was struck down entirely by the Eleventh Circuit Court of Appeals.
The Court’s ruling vacates the one-to-one consent rule entirely. In doing so, the Court’s action punctuates the end of a year-plus of challenges, and a mad rush by lead generators and lead buyers to achieve compliance readiness by the January 27, 2025 deadline.
The FCC Delay Order
As the business day on January 24, 2025 neared its end, the FCC issued an Order postponing implementation of the new rule by up to one year. The FCC based the delay on the fact that the federal appeals court presiding over a challenge to the rule filed by the Insurance Marketing Coalition (“IMC”) had not yet issued a final ruling.
Citing its authority to postpone, the FCC stated that the delay was “in the interest of justice ... to avoid imposing new burdens on parties while the court is adjudicating IMC’s challenge to the rule and to avoid subjecting texters and callers acting in good faith to the risk of having to defend themselves against private suits ... for a period in which the rule is still undergoing judicial review.” The FCC also noted “that providing additional time may facilitate the industry’s compliance with the rule if the court upholds it, [a]nd [that] a time-limited postponement to maintain the regulatory status ... will not pose any undue harm to the public interest.”
The Eleventh Circuit Order Vacating the New Rule
Right on cue, within minutes after the postponement order was issued, the Eleventh Circuit Court of Appeals issued its own Order vacating the new FCC rules. The Court did so by holding that the FCC exceeded its authority by enacting rules that go beyond what the plain and ordinary meaning of the TCPA’s statutory text authorizes.
The Court broke the FCC’s rule into two parts: (1) the requirement that consent be only as to one vendor at a time; and (2) the “logically and topically related” aspect of the new rule, which prohibits consent to texts or calls that are not related to the website visited by the consumer.
As to the one-to-one requirement, the Court held that case law interpreting “prior express written consent” (“PEWC”) requires merely a voluntary consent to receive robocalls prior to the call being made, including instances where a consumer consented to receive calls from more than one vender at a time. On that basis, since the new rule is inconsistent with the plain and ordinary meaning applied to PEWC, effectively prohibiting conduct that is authorized by the statutory text, the rule went beyond the authority of the FCC. On this point, the Court stated:
[O]ur cases show that to give “prior express consent” to receive a robocall, one need only “clearly and unmistakably” state, before receiving the robocall, that he is willing to receive the robocall. One-to-one consent is not required. Because the one-to-one-consent restriction attempts to alter what we have said is the ordinary common law meaning of “prior express consent,” the restriction falls outside the scope of the FCC’s statutory authority to “implement” the TCPA.
Similarly, the Court held that the “logically and topically related” aspect of the Rule “impermissibly alters what it means to give ‘prior express consent’.” The rationale here was based on clear examples where the rule was found to be incompatible with the ordinary and plain meaning of PEWC. The example given was a consumer visiting a car loan website, and the consumer clicked a check box explicitly consenting to receive robocalls concerning loan consolidation services.
The “logically and topically related” rule would bar that as invalid consent with respect to loan consolidation contacts. The Court held that position to run contrary to the plain and ordinary meaning of PEWC in light of clear and unmistakable consent by the consumer in the example.
In summing up its analysis, the Court noted that “[a]t bottom, the FCC has ‘decreed a duty [on lead generators] that the statute does not require and that the statute does not empower the FCC to impose.’ The FCC therefore exceeded its statutory authority in redefining ‘prior express consent’ to include the additional ‘prior express consent’ restrictions.” The Court concluded with the following, on which basis the Rule was formally vacated:
In its attempt to “implement” the TCPA, the FCC overstepped statutory boundaries. “Agencies have only those powers given to them by Congress, and ‘enabling legislation’ is generally not an ‘open book to which the agency [may] add pages and change the plot line.’” But changing the plot line is exactly what the FCC tried to do here. “Congress drew a line in the text of the statute” between “prior express consent” and something more burdensome. Rather than respecting the line that Congress drew, the FCC stepped right over it.
We will continue to monitor further developments and the impact of the Court’s ruling on the lead generation industry. For now, there is at least some relief of the anxiety that comes from any significant regulatory change, including the threat of lawsuits designed to test the boundaries of the new regulatory landscape. That said, efforts to comply with the rule also showed that lead generators are capable of developing higher quality leads that may be advantageous to retailers. The one-to-one rule, though it ultimately failed to launch, may still be impactful.
About Our Authors
Gabe Pinilla is a construction law and commercial litigation attorney focusing his practice on a broad range of business sectors and disciplines, including litigation and compliance efforts around the Telephone Consumer Protection Act (TCPA). Gabe also handles business tort matters, including fiduciary breaches by former officers or employees, and related claims, unfair competition, and restrictive covenant enforcement matters, and a variety of strategic planning matters. Gabe is admitted in Florida, Colorado, Texas, and Maryland, and he represents clients before federal district courts in several states and the U.S. Court of Appeals for the Eleventh Circuit. Gabe serves as Partner in Charge of the Denver office.
Lou Ursini is a financial services litigator with more than two decades of experience representing national and regional retail banks, lenders, fintech providers, online payment processing servicers, investors, credit card issuers, mortgage servicers, and debt buying and collection professionals. A current member of the Adams and Reese Executive Committee, Lou has held various leadership positions within the national law firm. He formerly served as Partner in Charge of the Tampa office and as a Financial Services Practice Group Leader.