In a landmark decision released this morning, the U.S. Supreme Court finally answered the question that has been at the heart of Telephone Consumer Protection Act (TCPA) litigation for decades – what constitutes an autodialer? – and the decision is a huge win for TCPA defendants. In Facebook v. Duguid, the Supreme Court unanimously held that, in order to qualify as an autodialer under the TCPA, a dialer must not only dial stored numbers using a random or sequential number generator, it must also have generated those numbers in the first place by using the same “random or sequential number generator.”
The TCPA imposes restrictions on calls and texts placed with an automatic telephone dialing system, commonly known as an “autodialer.” The statute defines “autodialer” 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 simple issue of whether a “random or sequential number generator” had to be used to both store and produce created a circuit split from which two very different interpretations of “autodialer” emerged.
The first interpretation, adopted by the Third, Seventh, and Eleventh Circuits, required that the autodialer equipment actually randomly or sequentially generate the telephone numbers it calls. The second and much broader interpretation, adopted by the Second Circuit and the Ninth Circuit, interpreted “autodialer” to be any equipment capable of storing numbers and subsequently dialing from those stored numbers at random, even if those stored numbers were not originally generated using a “random or sequential number generator.” This interpretation led to an onslaught of litigation against defendants who maintain lists of stored numbers that were either provided by a customer or obtained through some other non-random means solely on the basis that the stored numbers were stored and dialed at random. This was the issue in Duguid.
Mr. Duguid alleged that he received multiple text messages from Facebook notifying him that someone had attempted to log in to his Facebook despite the fact that he did not have, and had never had, a Facebook account. Mr. Duguid sued Facebook and alleged that Facebook violated the TCPA because it used equipment that automatically sends text messages to stored phone numbers when unrecognized login attempts are made on the account associated with that number. Facebook argued that its equipment did not qualify as an autodialer because it sends text messages to specific phone numbers associated with individual Facebook accounts and does not randomly generate those phone numbers. The Ninth Circuit sided with Mr. Duguid, but the Supreme Court reversed.
For the Supreme Court, the decision came down to statutory construction and simple grammar. Because the phrase “using a random or sequential number generator” immediately followed both “store” and “produce” in the TCPA, that phrase was equally applicable to both under the “series-qualifier canon.” To demonstrate the same grammatical principles in a different context, the Supreme Court asked the parties to imagine a teacher advising students that they “must not complete or check any homework to be turned in for a grade, using online homework-help websites.” To interpret that instruction to mean that students were permitted to complete homework using online homework-help websites so long as they did not check their homework using the same would be “strange.” The same is true for the TCPA’s phrase defining an autodialer as equipment used “to store or produce telephone numbers to be called, using a random or sequential number generator.”
The Supreme Court held that its decision was further supported by statutory context. The TCPA specifically prohibits the use of an autodialer to dial emergency numbers or numbers that cause a called party to be charged for the call, both of which contemplate dialing equipment that produces random numbers for dialing. The Supreme Court noted that the broad definition of autodialer would include almost all modern cell phones because they conceivably have the potential ability to store and call telephone numbers.
The unanimous nature of the decision forecloses some of the variances that often evolve in subsequent lower court opinions that focus on concurring and dissenting opinions to interpret and shape the legacy of the underlying Supreme Court opinion. Despite the diversity of judicial philosophies present on the Supreme Court, only one justice filed a concurring opinion. Justice Alito’s concurrence focuses on “canons of interpretation” that the court uses in statutory interpretation and, while interesting, the concurrence will have little impact on the future application of the majority opinion.
The Supreme Court’s decision will have a massive impact on TCPA litigation and compliance for companies who call or text consumers. Practically speaking, less equipment qualifies as an autodialer under this ruling than had been included in this definition in the past. This means that a much smaller portion of previously covered communications will be regulated under TCPA. It is now a necessary feature of an autodialer to have the capability of generating random or sequential numbers. If your telephone system cannot do that, it is not an autodialer for purposes of the TCPA, even if the equipment has the capacity to store or dial numbers. Accordingly, many companies previously at risk of being held to have used an autodialer now find themselves using a device not covered by TCPA restrictions on autodialers.
Below, we highlight a few of the major impacts we expect to see:
Stay tuned for further developments and analysis as this significant decision begins to play out in TCPA cases across the country.