On April 1, 2021, the Supreme Court answered a question that has been at the heart of the recent wave of class-action litigation under the Telephone Consumer Protection Act of 1991 (TCPA) in its long-awaited ruling in Facebook, Inc. v. Duguid. Contrary to decisions from lower courts and expansive rulings from the Federal Communications Commission, the Court adopted a narrow (and caller-friendly) reading of the TCPA that appears to exclude most modern dialing technology (including predictive dialers) that targets known lists of customers from the definition of “automatic telephone dialing system” and instead appears to include only to seldom-used robocalling machines with the capacity to dial numbers randomly or sequentially.
With limited exceptions, the TCPA prohibits calling a wireless phone number using an ATDS unless the caller has obtained either “prior express consent” for informational calls or “prior express written consent” for telemarketing calls.
The problem is that until the Duguid ruling, no one could agree on what an ATDS actually is. The 1991 statute defines an ATDS opaquely 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.”
The class-action plaintiffs in Duguid—represented by legal-writing professor and lexicographer Bryan Garner—argued that the modifier “using a random or sequential number generator” applied only to the word “produce” and not “store” in the definition’s first clause. But citing Mr. Garner’s treatise (co-authored with the late Justice Scalia), the Court applied the “series-qualifier canon” and ruled that the random/sequential number generator requirement applies to the sentence as a whole. Indeed, the problem with the plaintiffs’ broad argument was its absurd implications, including that even an iPhone would appear to meet the definition of an ATDS and thus apply substantial penalties for ordinary calls made without prior express consent.
What are the real-world implications of this linguistic tussle? The definition of ATDS is now a narrow one, and it appears to exclude modern dialing technology (including predictive dialers) that targets known lists of customers—and appears to apply only to seldom-used robocalling machines with the capacity to dial numbers randomly or sequentially (e.g., 555-1000; then 555-1001; then 555-1002, and so on). While this ruling may increase the number of calls that we all receive, it appears to be in keeping with the original intent and plain meaning of the statute.
For now, this decision is a significant victory for the companies that rely on automatic dialing to communicate with their customers.
However, we offer three notes of caution:
It is too soon to abandon the processes for obtaining and tracking consumer intent when relying on predictive dialing or other similar systems. District and circuit courts may apply Duguid narrowly, making it hard to dodge TCPA cases on a motion to dismiss. Prudence counsels patience here, as we wait to see how Duguid will be applied in a pragmatic way by the lower courts.
This decision does not address the TCPA’s parallel restrictions on calls placed using an artificial or pre-recorded voice. Accordingly, callers must still obtain the appropriate level of consent for these calls.
The reality is that this decision will lead to all of us receiving more calls and texts from businesses. Some people welcome such messages as an effective way to get an appointment or prescription reminders, post-discharge instructions, account security alerts, or myriad other helpful messages. But an increase in automated calls is likely to be an unpopular outcome. Senator Ed Markey, a co-author of the TCPA in 1991, has already stated that he intends on introducing legislation to amend the TCPA to “fix the Court’s error.” Thus, callers should continue to remain diligent in capturing necessary consent and maintaining adequate documentation of records to demonstrate that they have done so before calling or texting.
We will continue monitoring these developments in the lower courts along with any proposed legislation.
If you have questions about the decision or its implications for your calling or text messaging programs, please contact any of the authors or your regular McDermott lawyer.