Latest Supreme Court TCPA Ruling is No April Fool’s Joke
On April 1, 2021, the Supreme Court issued a highly anticipated and unanimous ruling on the Telephone Consumer Protection Act (“TCPA”) clarifying the definition of automatic telephone dialing system (“ATDS”). The TCPA was enacted to limit abusive telemarketing actions by setting limits on the use of ATDS’s. The TCPA regulates the use of ATDS in making calls or sending text messages and the use of pre-recorded or artificial voice messages.[1]
Facebook, Inc. v. Duguid
The Supreme Court granted writ of certiorari on the 9th Circuit case Facebook, Inc. v. Duguid. The question before the Court was whether the definition of ATDS “encompasses equipment that can ‘store’ and dial telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’” The TCPA defines an ATDS as “equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”[2] Essentially, the confusion arises from whether the phrase “using a random or sequential number generator” modifies “produce” and “store” or solely “produce.” The disagreement on this definition has led to a split amongst both the district courts and courts of appeal, which has caused the Supreme Court to take up the issue.
As important background, Facebook includes a security protection feature that allows users to elect to receive text messages when individuals attempt to access their account. In the case at hand, Noah Duguid received such an alert to his telephone but was not a Facebook user and had never created an account. Duguid argued that Facebook’s practice of sending text messages to individuals violated the TCPA as an ATDS. Facebook insisted the TCPA did not apply to its practice because they did not use “a random or sequential generator.”
The Court was wary of a broad interpretation in defining ATDS: “[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel. Duguid’s interpretation of an autodialer would capture virtually all modern cell phones, which have the capacity to ‘store . . . telephone numbers to be called’ and dial such numbers.’” Under Duguid’s interpretation, if a cellphone user sent an automatic text message response or used the speed dial function, this would fall within the scope of TCPA. Ultimately, the Supreme Court rejected this interpretation. “Congress’ definition of an autodialer requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator.” (emphasis added). The Court’s determination excluded Facebook’s notification process from the TCPA because it did not use a random or sequential number generator to contact users even though the system stored and dialed telephone numbers.
Implications going forward
Ultimately, the Supreme Court’s decision should be viewed as a win for businesses. Since 1991 when the TCPA was enacted, technology has adapted and in turn there has been an increase in robocalls. Yet, the general framework and definition of ATDS has remained consistent. Most platforms used by companies today store and produce phone numbers provided by customers or patients, similar to Facebook’s practice. These type of platforms do not implicate the TCPA if there is no use of random or sequential number generator technology. However, one should still remain alert in case Congress responds to the Supreme Court by updating the TCPA and definition of ATDS. For now, businesses can celebrate the win.
[1] For a more detailed discussion of and background on the TCPA, see our article “The Healthcare Act You Don’t Know”.
[2] 47 U.S.C. § 227(a)(1)