Yesterday the Supreme Court issued its ruling in Facebook, Inc. v. Duguid, clarifying what qualifies as an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act. For potential TCPA defendants, it’s a very good ruling—it adopts a narrow view of what type of equipment is considered an ATDS.
The Court’s central holding is that equipment or software isn’t an ATDS unless it has “the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” This, of course, is what the statute says, but not how the FCC and many trial and appellate courts had ruled that Congress meant to say. The Court clarified that “Congress’ definition of an autodialer requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator.” This definition excludes equipment like Facebook’s login notification system, which sends automatic text messages to account holders after failed login attempts, which does not use such technology.
The Court rejected Duguid’s (and the FCC’s and numerous appellate courts’) ATDS definition, which would classify almost all modern cell phones as autodialers simply because they’re equipment that can store or dial numbers from a list. The Court (rightly) rejected that broad reading because that’s not what Congress wrote and they couldn’t assume Congress intended to impose the TCPA’s massive statutory damages on essentially every American with a cell phone. The Court’s colorful language paints the picture: “Expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.”
Although that is very telling language about how to read what Congress wrote, the Court did not explicitly address what the term “capacity” means in the ATDS definition, which is another area that some courts and the plaintiffs’ bar have tried to use to support their rewriting of Congress’ definition. Instead, the Court focused on the term “use,” utilizing phrases like “must use” – which connotes a present, actualized capacity – which is helpful, but the Court did not squarely reject the position adopted in some courts that the “capacity” can be potential. That said, the language is still better for anyone arguing the system has to have the current capacity to be an ATDS. Helpfully, the Court did rule that the degree of human intervention required to operate any device cannot be used as a measure for whether a device qualifies as an ATDS. That question-begging standard appears to have been retired.
Before you fire up your dialer or SMS platform, please remember: this ruling is does not eliminate all potential TCPA claims. For example, this doesn’t change the law at all on prerecorded/artificial voice or Do-Not-Call claims. So this ruling is good news mainly for callers and the companies they call on behalf of using a dialer with live agents. While this may cut down on TCPA claims for calls made with autodialers, it’s likely TCPA plaintiffs will just shift their focus to Do-Not-Call Registry, prerecorded/artificial call, and state telemarketing law claims. (And with the FCC’s quickly changing environment with STIR/SHAKEN, robocall mitigation, and carrier-authorized blocking, ignoring consent issues may simply cause your calls or messages to become ensnared in other issues.)
To summarize, here are a few reminders:
A 9-0 Supreme Court ruling vindicating the defense-side interpretation of ATDS is a win for sure. But if anyone tells you the “TCPA is dead,” be wary.
If you’d like to read the full opinion, you can do so here.
If you have questions about your TCPA or direct-marketing law compliance practices, or would like assistance evaluating how this ruling may affect your business, please contact us: