The Supreme Court’s Landmark Decision in Facebook v. Duguid: Top Takeaways and Issues to Watch

TCPA Connect

On April 1, 2021, the Supreme Court issued its highly anticipated decision in Facebook v. Duguid, resolving a long-standing circuit split on the definition of an automatic telephone dialing system (ATDS or autodialer) under the Telephone Consumer Protection Act (TCPA). The Court ruled that to qualify as an ATDS under the TCPA, a device must have the capacity to either (1) store a telephone number using a random or sequential number generator or (2) produce a telephone number using a random or sequential number generator. Reversing the Ninth Circuit, the Court concluded that merely having the capacity to store numbers and dial them automatically is not enough to make a device qualify as an ATDS.

The ATDS Battle

As readers of TCPA Connect know, circuits have disagreed over how to interpret the ATDS definition since the D.C. Circuit decided ACA International in 2018, striking down the broad interpretation from the Federal Communications Commission (FCC) in its 2015 Omnibus. On the one hand, the Third, Seventh and Eleventh Circuits each held, in essence, that an ATDS requires random or sequential number generation. On the other, the Second, Sixth and Ninth Circuits held that a device need not generate random or sequential numbers as long as it could store and automatically dial numbers. District courts, particularly those in circuits that had not formally weighed in on the split, came out on either side of the coin.

Summary of Key Rulings in Facebook

Writing for a unanimous Court, Justice Sotomayor stated that “[e]xpanding 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.” Moreover, “Duguid’s interpretation of an autodialer would capture virtually all modern cell phones, which have the capacity to ‘store … telephone numbers to be called’” and “‘dial such numbers.’” Doing so “could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses.”

The high court relied on rules of grammar and the statutory language chosen by Congress, including the strategic placement of a comma in the ATDS definition. The Court was also influenced by legislative history and the “technological backdrop” under which the TCPA was passed. Autodialer technology “revolutionized telemarketing by allowing companies to dial random or sequential blocks of telephone numbers automatically.” In passing the ATDS provision, Congress “target[ed] a unique type of telemarketing equipment.” The Court noted that the technology “threatened public safety” by tying up phone lines during emergencies (Section 227(b)(1)(A)(i)); tying up multiple lines of a business at the same time (Section 227(b)(1)(D)); and reaching cell phones and pagers, where consumers had to pay fees for such calls (Section 227(b)(1)(A)(iii)).

In language reminiscent of the Ninth Circuit in the Marks decision, the Court gave short shrift to the role of human intervention: “[A]ll devices require some human intervention, whether it takes the form of programming a cell phone to respond automatically to texts received while in ‘do not disturb’ mode or commanding a computer program to produce and dial phone numbers at random.” Consequently, the Court declined “to interpret the TCPA as requiring such a difficult line-drawing exercise around how much automation is too much.”

While many wondered whether the Justices would be swayed by Duguid’s policy arguments, the Court flatly rejected them.

First, Duguid attempted to expand the interpretation of the TCPA by relying on “broad privacy-protection goals” and the threat of “unleashing” a “torrent of robocalls.” The Court focused on the narrow and unique interests at play: “Congress expressly found that the use of random or sequential number generator technology caused unique problems for business, emergency, and cellular lines. Unsurprisingly, then, the autodialer definition Congress employed includes only devices that use such technology, and the autodialer prohibitions target calls made to such lines. The narrow statutory design, therefore, does not support Duguid’s broad interpretation.”

Second, the Court rejected Duguid’s plea to treat the TCPA as “an agile tool” that adapts to modern technology, noting that the ATDS still contains broad protection for robocalls to home or cell phones. Moreover, “Duguid’s quarrel is with Con­gress, which did not define an autodialer as malleably as he would have liked. … This Court must interpret what Congress wrote[.]”

While the Court remanded for further proceedings, it concluded that Facebook’s notification system was “not an autodialer” because “it neither stores nor produces numbers ‘using a random or sequential number generator.’”

Top Takeaways:

1. The Facebook decision narrows the interpretation of autodialer, as the capacity to store or produce numbers using a random or sequential number generation is required. The Facebook decision should curb at least some ATDS lawsuits.

2. Not all automated text messages are covered by the TCPA’s autodialer provisions. For example, the ATDS provisions of the TCPA do not cover ordinary cell phone use, even if some of those messages may include automated text messages (e.g., “Do Not Disturb” messages while driving).

3. The decision does not impact the TCPA’s automated calling restrictions with respect to artificial voices or prerecorded voice messages. Companies should maintain robust compliance in connection with artificial voice or prerecorded voice message calls, including Interactive Voice Response (IVR), ringless voicemail or voicemail drops, and artificial intelligence (AI) messages.

4. The decision does not impact other requirements of the TCPA, including the Do Not Call rules, which do not depend on the type of technology used to make a call. Companies should continue to comply with these requirements and maintain robust policies and procedures.

Top Issues to Watch in the Wake of Facebook:

While the decision provides clarity to the ATDS debate, companies should be mindful that the lower courts will have an opportunity to interpret the decision and that Congress as well as the FCC may weigh in. Here are the top issues to watch.

1. Capacity to store or produce a telephone number using a random or sequential number generator. With the importance of random or sequential number generation (whether to store or to produce telephone numbers), we expect the plaintiffs’ bar to test the scope and meaning of this phrase. Footnote 7 of the Court’s Order will provide a starting ground for this debate, where the Court provided the following example focused on storage: “For instance, an autodialer might use a ran­dom number generator to determine the order in which to pick phone numbers from a preproduced list. It would then store those numbers to be dialed at a later time.” In certain cases, these issues could lead to a battle of the ATDS experts after substantial litigation. 

2. “Use” versus “capacity” debate. We expect cases to litigate the issue of whether devices must actually use a random or sequential number generator to be deemed an autodialer or whether the capacity to use a random or sequential number generator will be sufficient. While much of the decision frames the issue in terms of “capacity,” other parts of the decision do not. See, e.g., page 7 (“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.”).

3. Human intervention debate. The role that human intervention plays in determining whether equipment is an autodialer will be a key focus post-Facebook. The Court’s comments in this regard appear to be dicta and in direct contravention of long-standing FCC authority stating that the “basic function” of an ATDS is to dial numbers “without human intervention.” See Rules and Regulations Implementing the Telephone Consumer Protection Act, CG Docket No. 02-278, Report and Order, 18 FCC Rcd 14014, para 132 (2003).

4. Whether text messages are “calls” under the TCPA. The Court expressly declined to decide whether text messages are covered. However, at oral argument, Justice Thomas questioned the ATDS provision’s applicability to text messages. Moreover, the unanimous decision focuses on the provision’s narrow purpose covering “unique” and “senescent” technology that existed at the time of the TCPA’s enactment. Text messaging did not. 

5. Congressional action. Facebook’s win sparked outrage from Congress and consumer advocacy groups within hours of its release, aided by the Supreme Court’s commentary that number generation—and perhaps the TCPA itself—is “senescent” (i.e., old). Sen. Markey, one of the original authors of the TCPA, and Rep. Eshoo denounced the decision and threatened legislative response. “Today, the Supreme Court tossed aside years of precedent, clear legislative history, and essential consumer protection to issue a ruling that is disastrous for everyone who has a mobile phone in the United States. … By narrowing the scope of the TCPA, the Court is allowing companies the ability to assault the public with a non-stop wave of unwanted calls and texts, around the clock. Fortunately, we can and will act to make right what the Supreme Court got wrong. We plan to soon introduce legislation to amend the TCPA, fix the Court’s error, and protect consumers. If the Justices find their private mobile phones ringing non-stop from now until our legislation becomes law, they’ll only have themselves to blame.” Legislation to reform the TCPA or to create a new law may be introduced and may garner wide support under a Biden administration in which Democrats control both the House and the Senate.

6. FCC action. The FCC has remained silent on its interpretation of ATDS since the D.C. Circuit’s reversal of its 2015 Declaratory Order, in which the FCC clarified that “capacity” under the statute meant potential capacity. While former Chairman Ajit Pai was quick to request public comments following the Ninth Circuit’s decision in Marks, signaling likely dissatisfaction with the court’s expansive reading, no ruling issued. The FCC might consider further guidance in the wake of Facebook. This is an opportunity for the FCC under a new administration to weigh in, especially on open questions. However, the FCC is one member short and currently lacks a permanent chairperson, which could delay any guidance.

7. Carrier requirements. Carriers will continue to monitor and/or block traffic over their network, and many carriers have their own requirements. Some carriers are starting to implement fairly strict policies, especially in light of the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act.

Companies are advised to remain vigilant and continue to ensure compliance with the TCPA. Companies should assess their dialing and text message platforms, especially before changing their dialing practices, to determine how Facebook impacts their calling risk. Companies are reminded that proper consent under the TCPA is still paramount and can avoid or substantially mitigate autodialer issues.

To read the opinion in Facebook v. Duguid, click here.



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