Supreme Court to decide fate of TCPA autodialer rules

The Telephone Consumer Protection Act, passed into law by Congress in 1991 and administered by the Federal Communications Commission, was created to stop unwelcomed telemarketing calls to consumers. The ins and outs of the TCPA and related legislation are intricate but what you should know is this -- the TCPA restricts telemarketing calls and the use of automatic telephone dialing systems, or ATDSs, and artificial or prerecorded voice messages.

The TCPA was enacted in response to endemic telemarketing calls that were being made at the time with technology which, when viewed from today's perspective, were primitive cave tools: random-fire autodialers that generated telephone numbers either randomly or in sequential order, and then dialed those numbers. Congress provided for steep statutory penalties for violations: $500 per call, up to $1,500 per call for willful violations. Nearly 30 years after passage of the statute, TCPA litigation has exploded, becoming the second most filed type of litigation in federal court. This explosion of litigation has spun off numerous legal issues that courts have grappled with for years now. One such issue involves the interpretation of the TCPA's definition of an ATDS.

The TCPA defines an ATDS as equipment that has the capacity "to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers." But disputes over the interpretation of this definition have roiled courts throughout the nation, leaving the circuits that have decided the issue split.

This issue has its genesis in a series of rulings by the FCC between 2003 and 2015. The FCC, seeking to keep the TCPA up to speed with advancements in dialing technology, broadly interpreted the ATDS definition to include devices that dialed from stored lists. In 2018, the U.S. Court of Appeals for the D.C. Circuit struck down the FCC's interpretations on the basis that the commission had failed to engage in reasoned rulemaking in issuing its various interpretive rulings. Since that time, lower and intermediate courts have grappled with the interpretation of the plain text statutory definition. The 2nd, 6th and 9th Circuits have broadly interpreted the statutory language to encompass any device that dials automatically from a stored list. The 3rd, 7th and 11th Circuits have narrowly interpreted the definition to encompass only devices that have the capacity to "randomly or sequentially generate" telephone numbers.

In the wake of this circuit split, the U.S. Supreme Court stepped in and granted certiorari in July of this year in the case of Facebook v. Duguid to decide the issue. In September, Facebook filed its opening brief advancing its interpretation that the statutory definition of an ATDS encompasses only devices with the capacity to randomly or sequentially generate telephone numbers (as opposed to dialing from a list). Notably, shortly after, the United States filed an amicus brief in support of the same narrow interpretation advanced by Facebook. The case is now set for telephonic oral argument on Dec. 8.

Making things even more interesting is the current vacancy on the Supreme Court, which may be filled by 7th Circuit Judge Amy Coney Barrett. Judge Barrett authored the 7th Circuit's opinion in Gadelhak v. AT&T in which the court adopted a narrow interpretation of the ATDS definition. If Judge Barrett is confirmed, it is likely the odds will tip more heavily in favor of the Supreme Court adopting that same narrow interpretation of the ATDS definition.

No matter the Supreme Court's position on the issue in Facebook v. Duguid, the future of TCPA litigation involving claims for violation of the TCPA's autodialer restriction will be impacted, either favoring businesses or consumers. If the Supreme Court adopts a broad interpretation of an ATDS, businesses will surely face increased litigation with little to no wiggle room to make the once available argument that their equipment does not use a random or sequential number generator. If the Supreme Court adopts a narrow definition of an ATDS, consumers will struggle to achieve victory in suits against businesses whose equipment has the capacity to dial telephone numbers from stored list, but not the capacity to generate random or sequential numbers. In other words, a narrow interpretation of ATDS is likely to significantly curtail TCPA litigation based upon violations of the TCPA's restrictions on the use of an ATDS.

However, while this may be true for ATDS-specific litigation, it is important to remember that use of an ATDS is only one reason why a company may have to comply with the TCPA. The TCPA also extends to the use of pre-recorded or automated voice messages, the transmission of fax solicitations, as well as calls to numbers registered on the National Do Not Call Registry. None of these rules will be impacted by the proceedings in Facebook v. Duguid. And, until the Supreme Court issues its opinion in the case, businesses that communicate with consumers using automated technology, and the platform providers that facilitate these communications, must continue to plan their compliance operations based on the potential that their equipment could be found to be an ATDS. For these reasons, companies must proceed cautiously and continue their robust compliance efforts. 