For the second time this year, the U.S. Supreme Court is wading into the jurisprudential morass presented by the Telephone Consumer Protection Act of 1991 with a case that could determine whether the TCPA will continue to be a lucrative and ever-expanding boondoggle for the plaintiffs’ bar.
On December 8, 2020, the justices heard oral argument in Facebook, Inc. v. Duguid. The question before the Court is whether the TCPA’s definition of an “automatic telephone dialing system,” or ATDS, encompasses any device that can “store“ and “automatically dial” telephone numbers, even if the device does not “us[e] a random or sequential number generator.”
In enacting the TCPA, Congress generally barred the making of calls to: (1) residential phone lines using an artificial or prerecorded voice, and (2) wireless lines using an artificial or prerecorded voice or an ATDS except for emergency purposes or with the recipient’s prior express consent. The statute 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 calls.”
As technological advancements have made the ATDS prohibition more relevant, the FCC and the courts have struggled to define what exactly constitutes an ATDS. Consumer advocates argue the law should be read with its general purpose to protect privacy in mind, and that Facebook’s interpretation would open the floodgates to a scourge of unwanted calls – this time directed to cell phones. Businesses counter that Congress’s original intent and text should control, and that the Court should construe the ATDS provision narrowly to advance its primary goal of preventing truly random and unwelcome “robocalls” while not stifling the use of technology that its drafters could not have conceived of nearly 30 years ago.
Given that the TCPA provides for mandatory and uncapped damages of $500 to $1,500 per violation, the financial and operational impacts of TCPA litigation on American businesses are enormous. Just by way of example, five businesses (Caribbean Cruise Line, Capital One, Dish Network, US Coachways and AT&T Mobility) paid in excess of $300 million to settle TCPA class actions from 2014 to 2017, presumably at pennies on the dollar to their true exposure. The sum of publicly reported class settlements over the last decade well exceeds $1 billion dollars, not including defense costs, settlements in thousands of additional actions, penalties in FCC enforcement actions and jury verdicts as high as $925 million. Depending on the outcome of the Facebook case, these enormous class settlements may soon go the way of the VCR and 8-track player – relegated to relic status in an ever-changing technological world.
The oral argument in Facebook centered on the lower courts’ widely diverging interpretations of what is an ATDS. On the one hand is an expansive view that an ATDS includes any device with the capacity to store and to dial telephone numbers from a list. The consequence of this reading would be to capture nearly every modern device with a computer chip, including an ordinary smartphone. The other view, espoused by Facebook and a plethora of business groups, is that an ATDS must have the present capacity to either generate random and sequential numbers to dial or generate the same to store for later dialing. The implication of this reading is that most modern commercial dialers would escape its reach, as would ordinary cell phones.
Making Sense of Congressional Intent
The arguments in Duguid brought into sharp relief the difficulty that all have faced in pinning down the precise role Congress intended the phrase “using a random or sequential number generator” to play due to its placement and punctuation within the ATDS definition. With both sides arguing well-constructed views of the language – using grammatical and judicial rules of interpretation – the Court’s questioning quickly turned to making sense of Congress’s intent when crafting the language and the practical consequences of the competing choices.
Several justices wondered if the parties’ interpretational fixes, if adopted, would effectively rewrite the law, especially since the problems posed are rooted in the particularities of technology unknown to Congress in 1991. As Justice Sotomayor put it, “Wouldn’t it be [Congress’] job, not [the Court’s], to update the TCPA to bring it in line with the times?” There seemed to be disagreement, however, over whether: (A) the text captures virtually all dialing equipment, meaning it is Congress’ job to curtail the statute’s unlimited reach, or (B) the text captures a much more limited set of modern dialers, meaning Congress – not the Court – must act to prevent the wave of unsolicited calls and texts the respondents believe it will permit.
In an encouraging sign for callers, many of the justices appeared skeptical that Congress intended the TCPA to reach the extraordinary range of conduct respondents would have the Court capture.
Although reading judicial tea leaves is always a dicey proposition, we are cautiously optimistic that a majority of the Court seemed inclined to adopt Facebook’s more narrow interpretation of the meaning of an ATDS. Even so, there are plenty reasons to believe a ruling in Facebook’s favor would not unleash an onslaught of unwanted debt collection and telemarketing calls. Other provisions of the TCPA remain intact, along with the Fair Debt Collection Practices Act and state statutes governing a range of calling activity. And the FCC has continued to partner with carriers to block spam calls and texts.
Our hope is that a ruling in favor of Facebook will continue to promote the salutary purpose of combating spam robocalls and text messages, while allowing legitimate business to communicate through the tools of modern technology without subjecting them to the potential of ruinous, uncapped liability. Stay tuned.