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Supreme Court Adopts Narrow Interpretation of ATDS

On April 1, 2021, the Supreme Court issued its long-awaited opinion in Facebook, Inc. v. Duguid et al., No. 19-511 (Apr. 1, 2021).  At issue in Facebook, was the question of what technology constitutes an “automatic telephone dialing system” (“ATDS”) within the meaning of the Telephone Consumer Protection Act, 47 U.S.C. §227 et seq (“TCPA”). The Supreme Court’s unanimous decision is a huge win for companies who communicate with their consumers by telephone/text message.

The case arises out of Plaintiff Noah Duguid’s claims that in 2014 he received text messages from Facebook to notify him that someone had tried to access his Facebook account from an unknown browser. Unfortunately, the Plaintiff did not have a Facebook account, nor had he ever provided his phone number to Facebook or otherwise consented to receive calls from Facebook. The Plaintiff filed a putative class action lawsuit claiming that Facebook violated the TCPA by using an ATDS to dial his phone number. But, the “ATDS” in question only had the capacity to dial phone numbers from a stored list. Facebook argued that because the dialing system used could not generate numbers randomly or sequentially, it did not meet the definition of an ATDS and therefore did not violate the TCPA.

The TCPA defines an ATDS 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.”  47 U.S.C. § 227(a)(1). The question ultimately turned on whether the phrase “using a random or sequential number generator” modifies both the words “to store” and “to produce.” After going through a lengthy discussion about “the rules of the last antecedent,” statutory context, congressional intent and historical circumstances, the Court ultimately concluded that in order to qualify as an ATDS a device must “have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.”

This is big news for callers, because most modern dialing systems do not generate numbers randomly and sequentially, and instead only place calls to consumers from a preprogrammed list. Callers should be aware that the Court’s ruling does not impact the TCPA’s restrictions on placing calling using a prerecorded/artificial voice, nor does it impact the TCPA’s Do Not Call rules.

Therefore, while the Court’s Facebook ruling may ultimately be dispositive in many future TCPA cases, this is unlikely to be the end of the TCPA. We expect to continue to see litigation particularly with respect to prerecorded/artificial voice calls, as well as Do Not Call rules. But we also anticipate that the next wave of TCPA litigation will focus on the question of an autodialer’s underlying “capacity” to generate numbers randomly and sequentially, even if not actually used to do so, which may require extensive expert discovery, onsite inspections of the dialing equipment at issue and invasive written discovery.

 

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