Privacy.Minded: To the Relief of Many E-Commerce Businesses, the U.S. Supreme Court Narrowly Construes a TCPA Requirement
In Facebook, Inc. v. Duguid, the Supreme Court “friended” Facebook by holding that the social media platform’s login notification texts did not constitute an “automatic telephone dialing system” under the Telephone Consumer Protection Act (“TCPA”). The Court narrowly interpreted the TCPA’s restrictions on use of automatic telephone dialing systems, which now unequivocally apply only to devices that use a “random or sequential number generator” to send calls or texts.
Quick Summary of the TCPA’s Autodialer Restriction
The TCPA was designed to safeguard consumer privacy by restricting telemarketing communications. The Act restricts telephone solicitations and the use of automated phone equipment and was signed into law in 1991 as a response to a growing rise in unregulated and harassing telemarketing calls and faxes. It was subsequently applied to text messages as the use of SMS became ubiquitous. The Act limits the use of pre-recorded voice messages, automatic dialing, and SMS and fax use. The TCPA empowers consumers to sue, individually or as a class, for violations.
The TCPA’s restrictions on “using any automatic telephone dialing system” became a thorn in the side of many businesses because the act’s definition of an “autodialer” wasn’t clear. An autodialier is “equipment which has the capacity” to “(A) store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Plaintiffs filed waves of class actions against companies that had allegedly failed to comply with the TCPA’s strict consent requirements, arguing that a company’s “equipment” is an “autodialer” if it merely “stores” phone numbers and “dials” them, regardless of whether a “random or sequential number generator” is involved. Several courts agreed with those plaintiffs . . . until now.
What happened in this case?
Noah Duguid alleged that Facebook violated the TCPA’s prohibition on autodialers by sending login notification texts using equipment that maintained a database of stored phone numbers. Facebook moved to dismiss the case, asserting that it did not use an autodialer as defined by the statute because it only texted phone numbers provided by customers, not phone numbers generated randomly or sequentially. The Ninth Circuit Court of Appeals was not at all persuaded by Facebook’s assertion and held that an autodialer only needs to “store numbers to be called” and “to dial such numbers automatically” in order to trigger the TCPA’s requirement of prior express consent.
The Supreme Court reversed the Ninth Circuit’s ruling, establishing a single, nationwide interpretation of the statutory language at issue. In an opinion heavy on the fundamentals of statutory interpretation and conventional rules of grammar, the Court held that the phrase “using a random or sequential number generator” modified both “store” and “produce.” As a result, Facebook’s automated dialing of stored phone numbers did not trigger TCPA requirements because Facebook was not “using a random or sequential number generator” to do it.
What does this mean for businesses going forward?
Because the Court held that a necessary feature of any autodialer under the TCPA is use of a random or sequential number generator, Facebook, Inc. v. Duguid will likely result in a decrease of the number of class actions brought under the statute. By confining the “prior express consent” requirement to a more traditional notion of “robocalls,” the Supreme Court exempted many of the more modern automated communication systems in use today, which leverage curated CRM databases rather than random or sequential number generators.
It’s important to remember that the TCPA’s autodialer restriction is just one of many federal and state telemarketing and privacy laws. If you’d like help understanding regulatory risks associated with your company’s automated messaging, telemarketing activity or handling of consumer data, please feel free to contact an author of this post.
