For those of you that missed it I broke down the oral argument on the IMC appeal of the FCC’s TCPA one-to-one consent rule.
Massive curveball by the court– although IMC’s arguments seemingly fell flat the court unexpectedly looks interested in protecting something called the “consumer’s right to consent.” Yet the court was also clear the FCC could “implement” the TCPA around the word “express” to assure that consumer consent was “clearly and unmistakably stated.”
Finding the line between these two concepts– a “right to consent,” on the one hand, and the ability to “implement” that right, on the other— will drive the outcome of the appeal.
The “right to consent” concept was new and novel and no one was prepared for it– certainly not the FCC’s counsel who had to grapple with it. As a friend of mine put it:
The ”consumer rights” blade was so sharp that the FCC guy didn’t know he’d been beheaded until he went to comb his hair, and his head fell off.
That about sums it up.
So where is this thing going to land now? I had previously given this a 10% chance of success– and given the way oral argument went, that was probably too high. IMC’s arguments were seemingly rejected out of hand.
But the Court has seemingly decided to take the opportunity to look past those arguments and create an entirely new paradigm for limiting federal agency power– perhaps what we’d expect from a panel of three Trump-appointed judges.
So here are the new possible outcomes and chances:
- 33% Chance: The one-to-one rule is struck down completely and court provides no additional clarifications: Oddly this is now the most likely outcome, although it is still only a 1/3 chance. While it is always dangerous to make guesses about case outcomes following oral argument, these judges seemed to have thought through these issues and developed an analytic framework that was inconsistent with limiting consent–especially the “logically and topically related” standard. While it is possible the court severs that out, I think the more likely option is for the court to strike down the rule. The FCC would be left with instructions to go back and try again.
- 25% Chance: The one-to-one rule lives on with no changes at all: Never underestimate the power of inertia. While the court seemed inclined to limit the FCC’s power there was plenty of “wiggle room” suggested in the argument. Plus you just never can tell with oral argument– head fakes are common. The judges are often just beginning their assessment of a case. That said, this one felt like the judges had prepared extensively before the hearing– so perhaps a better read is possible here than usual.
- 20% Chance: One-to-one rule lives on with Logically and Topically Stricken: After oral argument I think this is what the court wants to do but there’s no really good way to get there. Still it is more likely this happens than the other limited rulings noted below.
- 10% Chance: Court allows the rule to live on but limits it in some way through judicial edict: Again feels like the Court might be interested in doing something like this but the path is murky. Could imagine a scenario where the rule is left in tact but the Appellate Court tells the lower courts it cannot be interpreted in a way that would limit a consumer’s substantive right to consent. Where that would leave us depends on the scope of the court’s ruling. Could be very interesting.
- 10% Chance: Court strikes down rule but makes damaging court-made limitations on express consent that makes us wish one-to-one was still in effect: Listening to the oral argument it was clear the Court thought the FCC could implement the statute by requiring consumers to provide checkbox consents, destroy hyperlinks, etc. I suspect the Court will consider taking the opportunity to make these rulings itself–defining “express consent” in a manner that tightly limits how consent can be provided– while simultaneously striking down the rule. It would be the ultimate power grab by the court– taking the FCC’s ball and telling it to go home because they’ve got it handled. The problem: whatever the eleventh circuit dreams up will likely be scarier than what the FCC handed us– we haven’t had time to prepare for it and it would be retroactive in effect! A judge-made rule WOULD BE RETROACTIVE which means we could all be in a world of hurt.
- 2% Chance: Something truly outlandish. At this point we can’t rule anything out. Maybe the Court decides the FCC wasn’t constitutionally established and all rulings by the agency must be stopped. Maybe the court revisits standing and decides IMC can’t pursue the appeal. Maybe the TCPA is struck down as unconstitutional. A court willing to look past the parties’ briefing and focus on a never-before-recognized “right to consent” may be willing to do just about anything. So we may need to expect the unexpected.
So adding these all up I now see an above 50% chance the rule goes away in some form or fashion (wow!!!!) and there is a 10% chance that the court makes things horrible and even worse. (eesh!!!).
We will know a lot more in the next couple of weeks. If the court issues a stay we can feel pretty confident the rule is in trouble. If no stay is issued– well that is pretty telling!
I will try to get a video up today breaking this down in more detail but either way you MUST attend our compliance after dark session on January 6, 2025 at LGW! (Super secret location– must contact us for location.)
Chat soon!
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A post about the recent oral argument in the IMC lawsuit challenging the 1:1 rule has raised some discussion. Although reluctant to respond to this type of thing – reasonable minds can differ – given all of the hard work and effort that has gone into this effort, here is another perspective.
1) IMC’s briefing set the stage for the hearing. The framing of “prior express consent” as a consumer right, the 11th circuit cases cited that hold multi-party consent permissible under the TCPA, the definition of “express consent” from Black’s law dictionary, the diagrams used throughout the hearing by the judges (including to extract a shocking concession from the FCC’s attorney that the 1:1 example would be permissible under the TCPA but for the new rule), the need to pursue abusers through enforcement, etc. were all parts of IMC’s briefing.
2) One of IMC’s core arguments – i.e., the FCC exceeded its statutory authority by prohibiting what the TCPA allows under the ordinary and common law meaning of “prior express consent” – appeared to resonate with the judges and was the topic of conversation throughout the hearing. This statutory authority argument (also referred to in the hearing as the “conflict” argument) was acknowledged by Judge Luck to be IMC’s “strongest argument.” When the FCC attorney got pinned down under questioning from Judge Luck and could not cite a case to support the FCC’s position, the FCC attorney tried to escape by claiming (as similarly suggested by the post) that IMC had not briefed the issue that way. Judge Luck cut off the attorney and responded “I think it was briefed in this way, this is the conflict argument.”
3) If the court ultimately rules in IMC’s favor, it will most likely be on grounds premised on the “statutory authority” / “conflict” argument. IMC is likely (but not guaranteed) to win on both the 1:1 and relationship issues, although, between those two issues, the 1:1 is a bit dicier.
4) Speaking about a potential ruling . . . The court’s job is to uphold, remand, or vacate the order. In reaching one of those conclusions, the court will necessarily have to reach some conclusions about the meaning of the TCPA’s terms – “implement,” “express,” etc. But the court is neither required nor likely to issue a comprehensive code of do’s and don’ts. The ordinary course in cases like this is for the court to opine only on the issues necessary to reach a judgment, in part because that involves less work on the judges’ part and in part due to the norm of deciding only what is necessary. In other words, it is unlikely that the court would itself modify the FCC’s rule (e.g. by allowing “affiliates” to be included)
at about 15:50 Dunne admits the agency still has work to do. with this admission, it seems # 1 is the most likely scenario. “you’re in the right place, but finish your work first next time”. and in finishing that work, they still need to square with how to allow how to limit the rights afforded in a statute through implementation. in fact, the TCPA does allow for consumer rights, and limiting those rights in enforcing the statute is counter to the law.
the overturning of the Chevron deference seems to have struck an agency’s ability to claim “subject matter expertise” to bend the law. agencies do not have final authority anymore, a legal review is allowed.
to quote Judge Luck, “Implement leaves room for more than one only”, so the 10 check box approach is an option, but so is unlimited consent, and of course 1:1 consent. all of these options agree with the original meaning of the TCPA, and as an implementing body, the FCC should allow for all options, or go back to Congress as suggested.
at approximately 16:53 Judge Luck agrees the regs are not capricious or arbitrary, but Kevin King was not suggesting that to begin with. the FCC was arbitrary and capricious in its response to the IMC, their response did violate the APA, and Mr. King effectively made that argument with his close.
finally, with all due respect to this forum, the question has been asked “why did the IMC hire these guys”. I submit “Global Tel*Link v. Federal Communications Commission, 866 F.3d 397 (D.C. Cir. 2017)’ and “FCC v. Prometheus Radio Project, No. 19-1231 (U.S. 2020)” as two examples in which Mr. King did successfully argue, and in Prometheus to the US Supreme Court, against the FCC. Covington has been practicing law since 1919 arguing cases globally that are far more complex and that include far more regulatory bodies. the entire case and the legal team might have been underestimated. we will see how it ends up.