On April 1, 2021, the Supreme Court decided Facebook, Inc. v. Duguid, which narrowed the scope of the Telephone Consumer Protection Act of 1991 (TCPA). The Court unanimously ruled that Facebook did not violate the TCPA by sending unsolicited text messages to individuals without their consent, overturning the Ninth Circuit's decision to broadly define automatic telephone dialing systems ("autodialers") under the federal statute. The case boiled down to everyone's favorite subject—grammar.
Understanding the TCPA Issue in Duguid
In 1991, Congress passed the TCPA to address "the proliferation of intrusive, nuisance calls" to consumers and businesses from telemarketers. The nuisances Congress intended to protect us from are commonly labeled as spam, robocalls, and robotexts today. The TCPA restricts certain telemarketer communications made with an "autodialer."
47 U.S.C. § 227(a)(1) defines an 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."
Based on the statute's construction, the Court in Duguid was left to decide whether the statute applied to: (i) all equipment that stored or produced telephone numbers to be called or (ii) equipment that used sequential number generators to produce and store numbers to be called.
Noah Duguid brought a class-action lawsuit against Facebook alleging that the tech giant violated the TCPA by using prohibited autodialers to alert individuals about activity on their accounts. (Facebook has a security feature that allows users to elect to receive text messages when someone attempts to log in to the user's account from a new device or browser). Facebook alerted Duguid, who did not have a Facebook account, about unusual login activity on an account linked to his telephone number—for ten straight months. Duguid tried to stop the unwanted text messages without success. As a result, Duguid brought this lawsuit on behalf of himself and several others, alleging that Facebook's use of a database that stored phone numbers and programming its equipment to send automated text messages to users was illegal under the TCPA. In response, Facebook asserted that the TCPA did not apply because the technology it employed to text Duguid and others did not use a "random or sequential number generator," and thus not an autodialer as defined by the statute.
The Court's Holding and Reasoning
Justice Sonia Sotomayor authored the Court's decision and looked to the conventional rules of grammar to address the statutory interpretation issue concerning the TCPA's definition of autodialers. The Court applied the interpretative rule, also called the "series-qualifier canon." This rule generally reflects the most natural reading of a sentence. Sotomayor wrote, a "qualifying phrase separated from antecedents by a comma is evidence that the qualifier is supposed to apply to all the antecedents instead of only to the immediately preceding one.″ To illustrate, Sotomayor used an example of a teacher who announced that "students must not complete or check any homework to be turned in for a grade, using online homework-help websites." Sotomayor also wrote, "It would be strange to read that rule as prohibiting students from completing homework altogether, with or without online support."
Applying this grammar lesson to the case, the Court held that to meet the definition of an autodialer the equipment in question must use a random or sequential number generator. The Court reasoned that Facebook could not violate the TCPA because the company's login notification system did not use a random or sequential number generator to contact individuals whose telephone numbers were linked to an account. The court further reasoned that, although Congress was broadly concerned about intrusive telemarketing practices, "[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to the nuanced problems when Congress meant to use a scalpel."
What Does this Mean for the TCPA's Future?
Although the Court held that Facebook's practices of collecting users' phone numbers did not violate the TCPA, the question remains how long until telemarketers start using Facebook's tactics to harass individuals with more, technically legal, robocalls. If telemarketers are not already using systems like Facebook's to get around TCPA compliance, the chances are likely that they will start.
Congress passed the TCPA 30 years ago. Today's technology is drastically different from the technology of the nineties. Innovations like smartphones, tablets, and smartwatches were limited to the purview of SCI-FI novels and spy movies. The TCPA is no longer equipped to handle the nuanced tactics employed by telemarketers on such devices. To achieve its intended purpose, the TCPA must be brought into the twenty-first century (the statute is so out of date it references landlines and pagers). Distain for robocalls shares a broad bipartisan consensus. The ball is now in Congress's court to decide whether to update the three-decade-old statute and address key privacy concerns in telemarketing.
What the Court's Decision Means for Businesses
Businesses, and retail companies in particular, see the Court's decision in Duguid as a win that will reduce the risk of liability when sending electronic communications to consumers. Texting customers is a common marketing practice for companies today. Further, businesses will no longer face penalty under the TCPA for using systems that store or produce phone numbers, so long as these systems do not use random or sequential number generators.
While Duguid narrows the scope of one specific provision of the TCPA, it by no means invalidates the statute as a whole. Companies must still carefully comply with the remaining TCPA provisions, such as the sections governing pre-recorded and artificial voice phone calls, seeking consumer informed consent prior to contacting such consumers, related opt-out requirements, and limitations placed on making phone calls to numbers on the National Do Not Call Registry.
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