On April 1, 2021, the United States Supreme Court ("Supreme Court") unanimously reversed the Ninth Circuit Court of Appeals decision in Facebook Inc. v. Duguid and held that for a device to constitute an "Automatic Telephone Dialing System" ("ATDS") within the meaning of the Telephone Consumer Protection Act of 1991 ("TCPA"), that device must have the capacity to use a random or sequential number generator to either store or produce phone numbers to be called. The TCPA prohibits making calls or sending text messages "(other than a call made for emergency purposes or made with the prior express consent of the called party) using an [ATDS] . . . to any telephone number assigned to a . . . cellular telephone service." An ATDS is 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 numbers." Courts across the country have wrestled with the TCPA's vague statutory language for years. However, the Supreme Court's decision in the Facebook TCPA law case now provides some much-needed clarity and, ultimately, should help the defense bar in TCPA actions.
What did the Supreme Court hold?
The Definition of an ATDS
The question before the Court was whether an ATDS encompasses equipment that can "store" and dial telephone numbers, even if the device does not "us[e] a random or sequential number generator." The Supreme Court answered this question in the negative. It noted that such an expansive definition, which was proposed by the plaintiff in the underlying action, would likely encompass all modern-day cell phones.
The action arose from text messages that Facebook sent to the plaintiff as part of its account verification process. The plaintiff did not have a Facebook account, however, and sued Facebook, alleging that Facebook wrongly texted his telephone number using an ATDS. Facebook argued, and plaintiff conceded, that it sent text messages to targeted telephone numbers linked to specific accounts. While it was unclear how Facebook obtained plaintiff's telephone number, the Supreme Court found that because Facebook dialed specific numbers that it believed were linked to specific user accounts, it could not have been held to have used an ATDS within the meaning of the TCPA.
Impact of the Facebook TCPA Law Decision
Without a doubt, the unanimous decision in favor of Facebook is a resounding win for the telemarking industry. Perhaps most importantly, the Supreme Court expressly overturned the Ninth Circuit's reasoning which held that an ATDS only needed to: 1) have the capacity to store numbers to be called; and 2) dial those numbers. Under the Ninth Circuit's approach, a device need not have the capacity to use a random or sequential number generator to meet the ATDS definition. With the Supreme Court's decision, a device cannot now be deemed an ATDS under the TCPA unless it has the capacity to use a random or sequential number generator.
We would caution readers and note that the holding is vague in some respects. For example, the decision speaks only about a device's capacity. It does not state that a device must use a random or sequential number generator to constitute an ATDS. Therefore, TCPA plaintiffs may still demand extensive discovery in TCPA class actions to ascertain how calls/texts were placed/sent. For that reason, companies must still maintain proper records to demonstrate that they only market to consumers who have provided consent to be contacted. Please note that the Supreme Court also expressly stated that the scope of its decision was limited to TCPA claims alleging that an ATDS was used. Accordingly, the decision should not be interpreted to change jurisprudence surrounding pre-recorded or artificial voice calls.
While this decision does not necessarily serve as a silver bullet in all TCPA cases, the industry certainly welcomes the increased clarity that it brings to the TCPA ATDS definition. As readers know, the only constant in the world of TCPA law is change. As plaintiffs and defendants parse the Supreme Court's decision in the Facebook TCPA law case in the coming days and months, change is inevitable. Therefore, businesses should work with experienced counsel to ensure compliance with an ever-changing TCPA regulatory climate.
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