Advertising Law Blog

April 1, 2021 will go down as a big day in the history of the Telephone Consumer Protection Act (“TCPA”), as the Supreme Court unanimously and drastically scaled back the definition of the term “automatic telephone dialing system” (“ATDS”). As a result, businesses are now permitted to use so-called robocalling technology to reach out to customers and potential customers alike by autodialer or text so long as the technology does not randomly or sequentially generate the phone numbers. In other words, thanks to the ruling in Facebook v. Duguid, get ready for an exponential increase in the number of autodialed calls and texts made in the United States.

The TCPA, codified at 47 U. S. C. §227, defines an ATDS as equipment that possesses the capacity to store or produce telephone numbers to be called, (a) using a random or sequential number generator and (b) to dial those numbers.

That definition was written thirty years ago, and technology has changed drastically during that time. Telemarketers are now perfectly capable of blanketing the country with robocalls many times over without having to generate numbers randomly or sequentially. However, courts responded to the proliferation of robocalls by stretching the statutory definition of an ATDS to cover an increasingly broad range of dialing activity, and plaintiffs’ attorneys have been able to exploit the judicial effort to keep the TCPA as a meaningful check on telemarketing activities. That trend ended with this latest ruling.

Plaintiff Noah Duguid brought a TCPA lawsuit against Facebook when the social media giant sent him numerous automatic text messages without his consent. The TCPA treats text messages the same as automated telephone calls, but in order for the TCPA and its $500 per-illegal-call penalty to apply in this situation, the texts must have been sent from an ATDS.

Like virtually anyone using ATDS technology today, Facebook did not randomly or sequentially send out the text messages in question. Rather, it sent targeted texts to numbers linked to specific accounts.

The district court originally dismissed Duguid’s lawsuit. But on appeal, the Ninth Circuit used a court-derived definition of ATDS rather than the statutory one, and reversed the district court, holding that Duguid had indeed stated a claim against Facebook for violating the TCPA.

Facebook, however, appealed to the Supreme Court and prevailed in the April 1st ruling, convincing all nine justices that the definition of an ATDS should be interpreted exactly as written by Congress.

The question before the Supreme Court was whether the definition of an ATDS encompasses equipment that can store and dial telephone numbers, even if the device does not use a random or sequential number generator. All nine justices agreed succinctly that, “It does not.” More specifically, the Supreme Court adopted a strict interpretation of the TCPA: “In sum, 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 […] which does not use such technology.”

While this ruling will undoubtedly embolden more aggressive calling policies, those considering increasing use of ATDS dialing would be wise to remember that the TCPA still forbids the use of prerecorded or artificial voice calls unless there is prior express written consent from the recipient.

TAKEAWAY: The dialing of stored numbers no longer requires prior express written consent so long as the numbers were not generated randomly or sequentially. Although caution should be exercised because there are other provisions of the TCPA that were unaffected, the Supreme Court’s ruling opens the door for businesses to use dialing technology to call or text numbers it has collected through other methods.