Supreme Court Limits Reach Of Robocall Law in Facebook Case

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Curtailing the reach of an antiquated robocall law, the U.S. Supreme Court has sharply limited what constitutes an “autodialer" under the Telephone Consumer Protection Act of 1991.

The unanimous decision in Facebook, Inc. v. Duguid issued on April 1, 2021, restores order to a law that had been weaponized against business interests for more than a decade. 

Background

At issue in the case is the proper scope of the TCPA’s limits on calls made to cell phones using an “automatic telephone dialing system” (ATDS), which Congress defined 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 calls.”[1] Initially, the ATDS restriction was not a concern for most companies. Virtually no one viewed the Act as targeting non-telemarketing calls to customers in the ordinary course of business.

As dialing technology advanced, however, some believed the ATDS restriction should advance with it. Beginning with Obama-era rulemakings, the Federal Communications Commission (FCC) seized upon a perceived ambiguity in the ATDS definition to advance a decidedly different, more muscular regime. Trial courts had to defer to the FCC, so the once-limited reach of the TCPA (and its crippling statutory damages) grew rapidly. The number of filed TCPA claims jumped from 356 in 2010 to 1,152 in 2012, rocketed to 3,149 in 2014, and peaked at 4,770 in 2016.


Source:  WebRecon LLC.

The stage reset again in 2018 after the U.S. Court of Appeals for the D.C. Circuit vacated the FCC’s “unreasonably, and impermissibly, expansive” ATDS interpretation, but left the courts to craft a replacement.[2] Decisions that followed often turned on the placement and punctuation of the clause “using a random or sequential number generator” within the statutory definition.

Two main views developed. The Third, Seventh and Eleventh circuits read the clause to modify both “store” and “produce,” meaning an ATDS must randomly or sequentially generate numbers – whether for immediate use or stored for later – and to dial them.[3] The Ninth Circuit disagreed, holding the clause attaches only to “produce” and, therefore, Congress meant to capture devices with the mere ability to store and dial numbers (i.e., most modern devices).[4] The Second and Sixth Circuits reached the same result, setting the stage for Supreme Court review.

Analysis

In Duguid, the Supreme Court decisively rejected the Ninth Circuit’s expansive view. Relying on rules of legislative and grammatical construction as well as the text’s most natural reading, an 8-0 Court held that the clause “using a random or sequential number generator” modifies the integrated clause “store or produce telephone numbers to be called.” In other words, to qualify as an ATDS a dialer must either (1) use a random or sequential number generator to store telephone numbers to be called, or (2) use a random or sequential number generator to produce telephone numbers to be called. In so holding, the Court dismissed Mr. Duguid’s suggestion to stretch the modifying clause to “include ‘produce’ but not so far back as to include ‘store’” as arbitrary line-drawing.

Turning to the policy arguments, Justice Sotomayor echoed her position at oral argument to find that Congress could not have intended to subject regular smartphone users to TCPA liability when using features like speed dialing or sending automated text responses. The purpose of the ATDS restriction was to target the telemarketing equipment that dialed emergency lines randomly or tied up an entire sequential block of numbers used by a single business back in 1991. Congress tailored the ATDS definition accordingly. Without legislation expanding the ATDS restriction, the Court declined to go further – especially considering that Congress had imposed broader restrictions elsewhere in the TCPA. Framed more colorfully, the Court refused to “take a chainsaw” to robocalls when “Congress meant to use a scalpel.”

The result in Duguid is an unqualified win for businesses. Not only does it scale back the ATDS provision, it also may help rein in an over-reliance on the broader privacy aims of the TCPA present in prior ATDS cases. District judges commonly have used privacy as a crutch to overcome the absence of textual support for a range of preferred outcomes. The Duguid opinion made clear this is generally inappropriate. Congress’s over-arching concerns about intrusive telemarketing practices should not influence how courts view the narrower ATDS restriction.

The Duguid opinion also may help in a practice. The Court’s framing of the facts reflects that the district court dismissed Mr. Duguid’s claims because Facebook delivered “targeted, individualized texts to numbers linked to specific accounts.” The Court did not question the procedural correctness of this dismissal. Instead, the Court readily concluded that login notification systems like Facebook’s do not meet the ATDS definition. This suggests that a plaintiff’s allegations of targeted, repeated calls or texts to a specific cell number alone are adequate to show that the calls or text were not made using an ATDS. It would be statistically improbable, if not impossible, for a defendant dialer to randomly or sequentially produce a customer’s same 10-digits for dialing several times in succession.

Ideally lower courts will mirror this approach in pending and future ATDS cases, eliminating the need for expensive, time-intensive discovery and experts. If summary judgment evidence was not necessary to show that Facebook did not use an ATDS, most TCPA claims should fail at dismissal as commonly alleged.

Conclusion

The Duguid decision is helpful for its limitation on liability in the near-term and the certainty it offers moving forward. But its beneficiaries should not lower their guard. As the Court noted, its ruling does not impair the sister provision regulating calls made to cell phones using artificial voices or prerecorded messages.

What’s more, the next iteration of the ATDS restriction could be worse. As expected, the Court left the job of updating the TCPA to Congress. There is little reason to expect it will decline the invitation. Now is the time to prepare. Move your cases. Refine your procedures. Contact your legislators and lobbyists. Stay vigilant.


[1] 47 U.S.C. §227(a)(1).

[2] ACA Int'l v. Fed. Commc'n Comm'n, 885 F.3d 687, 700 (D.C. Cir. 2018).

[3] Dominguez ex rel. Himself v. Yahoo, Inc., 894 F.3d 116, 121 (3d Cir. 2018); Glasser v. Hilton Grand Vacations Co., LLC, 948 F.3d 1301, 1306 (11th Cir. 2020); Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 464-65 (7th Cir. 2020).

[4] Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052 (9th Cir. 2018).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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