On April 1, 2021, the U.S. Supreme Court issued its long-awaited decision in Facebook, Inc. v. Duguid, 2021 WL 1215717 (2021) (No. 19-511), concerning the meaning of an “automatic telephone dialing system” (“ATDS”) or autodialer under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. The Court held that “Congress’ chosen 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.” The unanimous decision, penned by Justice Sotomayor (with a concurring opinion by Justice Alito), represents a major victory for TCPA defendants that often face business crippling harm via class actions under the TCPA’s statutory damages of $500 to $1,500 per unlawful call, text or fax, even where the alleged conduct causes little harm.
By way of background, the TCPA defines an ATDS or autodialer as equipment with the capacity both “to store or produce telephone numbers to be called, using a random or sequential number generator,” and “to dial such numbers.” 47 U.S.C. § 227(a)(1). The issue before the Court was whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not use a random or sequential number generator. The Court stated, unequivocally, it does not.
Petitioner Facebook maintained a social media platform that, as a security feature, allowed users to elect to receive texts when a person attempted to log-in to the user’s account from a new device or browser. Facebook sent such texts to Respondent Noah Duguid, alerting him to login activity on a Facebook account linked to his telephone number, but Duguid never created that account (or any account on Facebook). Duguid tried unsuccessfully to stop the unwanted messages, and subsequently filed a putative class action against Facebook. In the suit, he alleged that Facebook violated the TCPA by maintaining a database that stored telephone numbers and programming its equipment to send automated texts to these numbers each time the associated account was accessed by an unrecognized device or web browser. In its motion to dismiss, Facebook argued that the TCPA did not apply because the technology it used to text Duguid did not use a random or sequential number generator, which the District Court (N.D. Cal.) agreed with and dismissed the lawsuit. On appeal, the Ninth Circuit reversed, holding that Duguid stated a TCPA claim by alleging that Facebook’s notification system automatically dialed stored numbers. The Ninth Circuit held that an autodialer need not be able to use a random or sequential generator to store numbers; it need only have the capacity to “store numbers to be called” and “to dial such numbers automatically.” The Supreme Court granted certiorari to resolve the conflict among the Courts of Appeals regarding whether an autodialer must have the capacity to generate random or sequential phone numbers.
As noted above, the meaning of an ATDS or autodialer under the TCPA is “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). Facebook argued that the clause “using a random or sequential number generator” modifies both verbs that precede it (“store” and “produce”), while Duguid contended that it modifies only the closest one (“produce”). The Supreme Court concluded that the clause modified both, specifying how the equipment must either “store” or “produce” telephone numbers.
The Court began its analysis by examining the text of the TCPA. It found that Congress defined an autodialer in terms of what it must do (“store or produce telephone numbers to be called”) and how it must do it (“using a random or sequential number generator”). It also found that the definition follows a familiar structure: a list of verbs followed by a modifying clause. Looking to conventional rules of grammar, particularly the interpretive rule known as the “series-qualifier canon,” the Court determined that when there is a straightforward, parallel construction that involves all nouns or verbs in a series, a modifier at the end of the list normally applies to the entire series. Specifically, the Court found that the series-qualifier canon recommended qualifying both antecedent verbs, “store” and “produce,” with the phrase “using a random or sequential number generator,” which the Court determined produced the most natural construction, as confirmed by other aspects of § 227(a)(1)(A)’s text. The Court also found that this interpretation of § 227(a)(1)(A) also heeds the commands of its punctuation. In sum, the Court found that 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 excluded Facebook’s log-in notification system, which did not use such technology.
The Court also found that the statutory text confirms that the autodialer definition excludes equipment that does not use a random or sequential number generator. The Court looked to the prohibitions under § 227(b) that target a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity. The Court found that expanding the autodialer definition 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.” The Court rejected Duguid’s interpretation, finding that it would capture virtually all modern cell phones, which have the capacity to store telephone numbers to be called and to dial such numbers. Notably, Duguid argued that ordinary cell phones are not autodialers under his interpretation because they cannot dial telephone numbers automatically, and instead rely on human intervention. The Court rejected this notion, highlighting that that all devices require some human intervention, and thus declined to interpret the TCPA as requiring such a difficult line-drawing exercise around how much automation is too much. Finally, the Court rejected Duguid’s other linguistic and grammar arguments concerning the interpretation of autodialer under § 227(a)(1).
In summary, the Facebook decision is a decisive victory for the TCPA defense community. The decision is refreshing especially as TCPA actions (both individual and class cases) continue to spiral out of control to the point of having already created a cottage industry for alleged unwanted telemarketing calls, texts and faxes. For now, however, TCPA defendants can rejoice in this decision’s narrowing the ATDS meaning and of course raising the bar for TCPA autodialer claims.
To view the Facebook decision, please click here.