The Supreme Court has issued its much-anticipated ruling in Facebook v. Duguid, impacting many pending TCPA cases nationwide and providing guidance to the many businesses that engage in calling and texting campaigns. The TCPA generally requires an individual’s prior consent to use an automatic telephone dialing system (an “autodialer”) to call or text his or her mobile phone, including for non-marketing purposes. The definition of an autodialer is thus crucial to whether and when a business may call or text its customers, prospects, or even employees. Unanimously reversing the Ninth Circuit, the Court held that a “necessary feature of an autodialer . . . is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” The Court further held that Facebook’s text-notification system should not be considered an autodialer because it sent “targeted or individualized” texts to “numbers linked to specific accounts,” instead of randomly or sequentially storing or producing those numbers.
As background, the TCPA makes it illegal to make certain calls “using any automatic telephone dialing system” to mobile phones without express prior consent. 47 U. S. C. §227(b)(1)(A). The statute 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.” Id. §227(a)(1).
In this case, the Ninth Circuit had held that the phrase “using a random or sequential number generator” modified only the verb “produce.” That meant that any equipment with the capacity “to store” telephone numbers and then “dial” them would be an autodialer—a definition that would sweep in much of the equipment businesses use to contact their own customers.
In an opinion written by Justice Sotomayor and joined by seven Justices, the Supreme Court rejected the Ninth Circuit’s view. Applying various canons of statutory construction, the Court concluded that the phrase “using a random or sequential number generator” applies to both “store” and “produce” telephone numbers. Under this interpretation of the statute, equipment cannot be an autodialer unless it has the capacity either to “produce” numbers “using a random or sequential number generator” or to “store” numbers “using a random or sequential number generator.” One way or the other, a “random or sequential number generator” must be involved.
In reaching this conclusion, the Court rejected Duguid’s invocation of the TCPA’s “privacy‑protection” purpose: “That Congress was broadly concerned about intrusive telemarketing practices . . . does not mean it adopted a broad autodialer definition.” Instead, the Court held, Congress adopted a prohibition focused on the problem it confronted at the time—“use of random or sequential number generator technology.” The Court noted that “[e]xpanding the definition” of an autodialer “would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.” The Court also batted away Duguid’s concern that a narrow construction of the term “autodialer” would “unleash a torrent of robocalls.” To start, the Court doubted the torrent would be so great, noting that the separate prohibition on many calls using “an artificial or prerecorded voice” to various types of phone lines, including home phones and cell phones, remained in place. “In any event,” the Court concluded, “Duguid’s quarrel is with Congress, which did not define an autodialer as malleably as he would have liked.”
Justice Alito concurred in the judgment. He agreed with the majority’s bottom-line conclusion and much of its analysis, but thought it over-relied on one particular canon of statutory construction.
After the Supreme Court’s ruling in Duguid, businesses placing calls or texts to numbers linked with specific accounts or individuals may not need prior consent to make autodialed calls or texts. The Supreme Court’s ruling suggests that equipment that sends “targeted or individualized” texts or calls to “numbers linked to specific” accounts does not constitute an autodialer under the TCPA. Rather, to qualify as an autodialer, dialing software or equipment must have the “capacity to use a random or sequential number generator to either store or produce phone numbers to be called.”
Although courts may see attempts to litigate the meaning of the term “capacity,” in Duguid, the Court stressed use, not mere capacity: “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 does not use such technology.” Regardless of the narrower autodialer definition adopted by the Court, claims relating to the TCPA’s restrictions on artificial or prerecorded voice calls and fax advertising will likely continue to remain active.
The immediate effect of this ruling will be to lift stays of many pending nationwide TCPA cases. The Supreme Court’s limits on the definition of an autodialer provides a path for defendants to short-circuit the many pending cases involving claims similar to those made in Duguid.