The Supreme Court unanimously ruled that the restriction in the Telephone Consumer Protection Act barring use of autodialers to make calls and text messages to cell phones does not apply to programmed lists of telephone numbers, such as the phone numbers of existing business customers. The decision resolves a split in the federal circuit courts and represents a significant victory for businesses seeking to communicate with their customers without the threat of autodialer class action litigation.

Background           

In the absence of consent from the called party, the TCPA bars calls to cell phones, emergency lines, hospitals, health care facilities, and simultaneous calls to business lines using an automatic telephone dialing system or ATDS. The statute defines an ATDS as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” Circuit courts split over whether to interpret this language narrowly to include only calls to numbers generated randomly or sequentially, or whether automated calls to stored lists of numbers—no matter how produced—were also included in the definition.

Immediately following the 1991 enactment of the TCPA, the Federal Communications Commission (FCC), which implements the TCPA, ruled that only equipment that randomly or sequentially generated numbers fell within the definition. In 2003, however, the FCC changed course and found that the definition encompasses calls to preset lists of telephone numbers. The ruling opened the door to an expansion of TCPA litigation as cell phones became the predominant form of communications. The definition continued to vex courts as they struggled with grammatical construction and the context of the restriction.

The Supreme Court’s Ruling

The case, Facebook v. Duguid, involved a putative class action against Facebook on behalf of consumers receiving text messages that alerted them someone had tried to log in to their Facebook account from an unrecognized device. The plaintiff in this case did not have a Facebook account, and the company explained that the plaintiff likely had been reassigned a telephone number that had belonged to a Facebook account user. Facebook sought dismissal, arguing that the plaintiff had failed to allege that its dialing equipment produced or stored numbers using a random or sequential number generator.

Relying on conventional rules of grammar and cannons of statutory construction, the unanimous Supreme Court had little trouble concluding that the ATDS definition only applies to equipment that generates numbers randomly or sequentially. The key grammatical fight had been whether the random or sequential number generator clause modified both the production of numbers and the storage of numbers, or just the production of numbers. The Supreme Court found it modified both, and hence calls from preset lists using equipment without the capacity to generate numbers randomly or sequentially are not ATDS calls.

The Supreme Court also found that the narrow definition comported with the context and purpose of the ATDS restriction, which was to prevent tying up emergency or business lines by equipment dialing numbers randomly or sequentially and imposing costs on cell phone users. The Supreme Court explained that “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.” The Supreme Court further noted that the plaintiff’s expansive definition would convert everyday modern smartphones into barred autodialers. Ultimately, the Supreme Court found that the plaintiff’s concerns that the narrow definition would lead to a torrent of robocalls was overblown, and that plaintiff’s argument should be taken up with Congress.

What Does This Mean for Pending Cases?

The Supreme Court’s narrow interpretation of the ATDS definition will most likely be applied retroactively to all pending cases involving the ATDS restriction. To maintain such claims, plaintiffs must allege sufficient facts demonstrating that an autodialed call utilized equipment with the capacity to generate random or sequential numbers—a capacity lacking in  many modern telephony systems. Callers, however, are not out of the woods completely. The TCPA still bars making prerecorded or artificial voice calls without consent, and other provisions that often overlap with ATDS claims—such as violations of do-not-call requirements for marketing calls and texts—remain viable. Callers should thus ensure that they check do-not-call registries, avail themselves of the do-not-call safe harbor, and comply with time, place and manner restrictions. Moreover, many states have their own automated calling and telemarketing restrictions. It is also likely that consumers will seek congressional action to update the ATDS definition to include calls from lists.

Finally, there is another shoe waiting to potentially drop on the TCPA. Last year, the Supreme Court ruled that the restriction on ATDS and prerecorded or artificial voice calls to cell phones violated the First Amendment by exempting calls to collect government debt. This content-based restriction resulted in unequal treatment that the Supreme Court remedied by severing the government-debt exception. This led defendants to argue, with some success, that the restriction cannot be enforced during the time the unconstitutional exemption was in effect (2015 to 2020). This too has split the courts, and the issue is currently pending before the Sixth and Ninth Circuits.

*Brownstein Hyatt Farber Schreck attorneys filed an amicus brief in support of the petitioner in Facebook v. Duguid.