U.S. Government urges Supreme Court to adopt reasonable interpretation of ATDS in TCPA case

Hogan Lovells

Hogan Lovells

[co author: Ambia Harper]

The Supreme Court recently granted certiorari in Facebook, Inc. v. Duguid to resolve a deepening circuit split on the question of what qualifies as an automatic telephone dialing system (ATDS or autodialer) under the Telephone Consumer Protection Act (TCPA). This week, the Department of Justice (DOJ) filed a brief in support of Facebook, arguing that only technology with the capacity to use a random or sequential number generator satisfies the statutory definition of ATDS. The DOJ’s interpretation of the TCPA is not binding on the Supreme Court, but the government’s decision to throw its support behind Facebook and buttress the company’s legal position may be a positive development for businesses that hope to see a narrower view of the TCPA’s scope prevail.

The TCPA was enacted in 1991 to reduce the number of unwanted telemarketing calls that consumers received. The TCPA includes several restrictions on telemarketing calls, including 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. 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.”

The definition of ATDS has been litigated extensively in recent years. In 2018, the U.S. Court of Appeals for the D.C. Circuit in ACA Int’l v. FCC rejected the Federal Communications Commission’s most recent order on the subject, which had broadly construed the meaning of ATDS. This year, the Eleventh, Seventh, Second, and Sixth Circuits have all issued rulings interpreting the ATDS definition, with no consensus developing in either direction.

In Facebook, Inc. v. Duguid, the plaintiff and the Ninth Circuit, in its opinion, rely heavily on Marks v. Crunch San Diego, LLC, a 2018 Ninth Circuit decision that adopted a broad reading of ATDS. The Marks court held that the phrase “using a random or sequential number generator” in the statutory definition of ATDS could be understood to modify only the verb “produce” in the preceding clause, rather than having to be read as modifying both “store” and “produce.” Under this reading, a dialing system is an ATDS as long as it can store numbers to be called, regardless of whether the numbers are chosen by a random or sequential number generator.

The government takes exception to both the legal and policy arguments made by the Ninth Circuit in Marks. Among other things, DOJ:

  • Argues that rules of grammatical construction and statutory interpretation indicate that the phrase “using a random and sequential number generator” should be read to modify both “store” and “produce.”
  • Rejects the Marks court’s view that it was anomalous to describe a number generator as storing numbers. According to DOJ’s brief, at the time Congress enacted the TCPA, some automated dialing devices used number generators to identify numbers for contemporaneous dialing, and other used generators to compile a list of numbers to be dialed at a later time.
  • Is not persuaded by the Marks court’s inference that Congress’s inclusion of two exceptions to the automated calling prohibition required a broad interpretation of the ATDS definition.
  • Notes that at least 25 states had automated telemarketing restrictions that were not limited to equipment that used a random or sequential number generator when Congress passed the TCPA and contends that historical backdrop reinforces arguments for the narrower reading of the statute.

Argues that Congress is the more appropriate body to address the fact that dialing systems that use random or sequential number generators have been replaced by new devices that cause similar aggravation for consumers but fall outside the scope of the TCPA.

Next steps

We will continue to monitor events in the Facebook v. Duguid litigation as they unfold. If you have questions about the implications of these developments, please contact our team.

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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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