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Uncertainty over the definition of an “automatic telephone dialing system” (ATDS or autodialer) under the Telephone Consumer Protection Act (TCPA) has fueled a steady flow of litigation for over a decade. Last year, four federal courts of appeals addressed the issue, with no consensus on the proper scope of the statutory definition. In Facebook, Inc. v. Duguid, a unanimous Supreme Court resolves the longstanding dispute over the definition and provides much-needed clarity for businesses and consumers. The decision is a significant victory for compliance-minded companies that have faced years of unwarranted class-action litigation over their efforts to contact consumers by phone and text message.
We will discuss the ruling and its potential impact during a webinar this Wednesday, April 7, 2021 at 1:00pm (EDT). We hope you will join to hear our thoughts on what is next for companies subject to the TCPA and what the decision means for your business. A link to register is available below.
Congress enacted the TCPA in 1991 to reduce the number of unwanted telemarketing communications consumers received. Among other restrictions, the TCPA includes a prohibition on the use of an ATDS or artificial or prerecorded voice to make any calls except with the prior express consent of the called party or for emergency purposes (or other applicable exemption).
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.” In recent years, the meaning of this language has sharply divided lower courts into two camps: those that believe the ATDS definition covers calls from stored lists (e.g., the Ninth Circuit) and those that read the statutory language to require the use of a random or sequential number generator (e.g., the Seventh Circuit).
In Facebook, the question before the court was a matter of statutory interpretation: should the phrase “using a random or sequential number generator” be read to modify both antecedent verbs in the preceding phrase—"store or produce”—or just the nearest one?
The Supreme Court agreed with Facebook. The Court held that the ATDS definition does not encompass equipment that can store and dial telephone numbers, if the device does not have “the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.”
To reach this conclusion, the Supreme Court looked to principles of statutory interpretation, namely the “series-qualifier canon,” and the TCPA’s statutory history, noting for example that Congress was particularly interested in dangers presented by autodialer technology. The Court found that Facebook’s interpretation of “autodialer” better matched the scope of Congress’s concerns, and that Duguid’s approach “would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.”
Resolving the ATDS debate provides valuable clarity to organizations placing calls and sending text messages, but the TCPA still presents significant risks and obligations for businesses, including for example:
We encourage clients to stay vigilant about TCPA compliance in the wake of the Facebook decision. If you have questions about the implications of these developments, please contact our team.
As mentioned above, we also hope you will join us for our webinar on Wednesday, April 7, 2021 at 1:00pm (EDT) as we consider the ruling and its impact on your business.
Authored by Mark Brennan, Arpan Sura, John Castle, and Ambia Harper