On December 8, 2020, the Supreme Court heard argument in Facebook, Inc. v. Duguid,1 a case addressing a split among federal circuit courts as to what constitutes an "automatic telephone dialing system"—often referred to as an "autodialer"—under the Telephone Consumer Protection Act (TCPA).2 The Court's decision could significantly reduce the risk of TCPA litigation directed at online platforms and apps with text messaging functionality.
Background
The TCPA generally prohibits calls to cell phones made without some form of consent if the calls are placed using an "automatic telephone dialing system."3 Courts have interpreted "calls" to include text messages.4 The TCPA defines "automatic telephone dialing system" 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 statute is invoked routinely by plaintiffs' class action counsel due to its statutory damages of $500-$1,500 per violation.5
In 2015, the Federal Communications Commission (FCC), which implements the TCPA, interpreted this definition broadly to include any device with the potential capacity to automatically dial stored telephone numbers, even if the equipment would have to be modified to add that functionality.6 In ACA International v. FCC, the United States Court of Appeals for the D.C. Circuit held that the FCC's expansive interpretation was arbitrary and capricious, and invalidated that aspect of the 2015 FCC Ruling.7
Since ACA International, courts have struggled to interpret the statutory definition of an "automatic telephone dialing system," and the FCC has failed to clear up the confusion. Some Circuit Courts of Appeals have interpreted the definition to cover any system with the capability of automatically dialing stored numbers, without regard to use of "a random or sequential number generator."8 Other Circuit Courts of Appeals have interpreted the definition to require the capability of using "a random or sequential number generator" to either "store" or "produce" the numbers to be dialed, finding mere storage of numbers insufficient.9
Facebook found itself stuck under the broad autodialer definition in a suit by Noah Duguid arising out of automated account-related text messages Duguid received. Initially, the United States District Court for the Northern District of California dismissed Duguid's claim, concluding that Duguid failed to allege facts showing that Facebook's texting equipment was an automatic telephone dialing system: The court concluded that Plaintiff's allegations could be read to "suggest that Facebook does not dial numbers randomly but rather directly targets selected numbers based on the input of users and when certain logins were attempted," which the court concluded was insufficient to meet the statutory definition.10 On June 13, 2019, the United States Court of Appeals for the Ninth Circuit reversed. Relying on circuit precedent, the court concluded that any system that has "the capacity to 'store numbers to be called' and 'to dial such numbers automatically'" constitutes an automatic telephone dialing system.11
Facebook took its case to the United States Supreme Court. The Supreme Court granted certiorari on July 9, 2020, to resolve the meaning of the statutory definition of an automatic telephone dialing system. The Court heard argument in the case on December 8, 2020.
Argument Before the Supreme Court
The Supreme Court's December 8 oral argument largely focused on four topics: (1) whether grammatical rules or other rules of language compelled one reading or the other; (2) the relative roles of scrutinizing the text as written versus Congress's purpose in adopting the language; (3) the relationship between the prohibition on calls made by an automatic telephone dialing system to wireless numbers and other parts of the TCPA, such as the provision addressed at calls to residential numbers, which does not prohibit calls using an automatic telephone dialing system; and (4) the tremendous changes in technology since the TCPA was enacted in 1991. Among the most interesting questions asked at oral argument were:
- Justice Thomas's question to Facebook's counsel as to why "a text message is considered a call under the TCPA";
- Justice Kagan's question to Facebook's counsel as to whether Facebook's interpretation created surplusage, or made certain words meaningless;
- Questions by several Justices, particularly Justice Sotomayor and Justice Breyer, as to whether Duguid's interpretation would make unlawful numerous calls by individuals with cellular phones, because cellular phones can store phone numbers and automatically dial them; and
- Questions by Justice Alito, Justice Gorsuch, and Justice Barrett, regarding Duguid's position that calls made with human involvement or human intervention would be excluded from the statutory definition given that it nowhere mentions "automatic," "automatically," or "human intervention."
Overall the Justices seemed to agree that the TCPA is outdated. Justice Thomas even noted that it was enacted when cell phones were "the size of a loaf of bread." Other than that, there was no clear consensus. We will have to wait until the Court's ruling, expected in Spring 2021, to find out the fate of the autodialer definition.
Implications
The Court's decision could have significant implications, particularly for businesses that offer services with text messaging functionalities, or that engage in text messaging. Texting systems typically rely on stored phone numbers, but almost never have the capability of generating random or sequential phone numbers to be sent messages; they target messages to specific phone numbers. Thus, if the Court adopts the narrow construction of the "automatic telephone dialing system" definition, most, if not all text messages will fall outside the scope of the TCPA's prohibition on non-consented to "calls" to wireless numbers. That, in turn, would likely lead to fewer TCPA suits involving text messages. There still would be suits arising out of text messages based on other issues, but overall, we would expect the volume to come down. In turn, we would expect to see more innovation in the use of automated text messages. On the other hand, should the Court endorse the Ninth Circuit's broad definition, we would expect TCPA suits based on text messages to only increase. That could make technology companies reticent to add new texting features and might even result in the elimination of many existing and beneficial text-based services such as, in this case, unusual activity on a user's account.
Wilson Sonsini Goodrich & Rosati routinely defends companies sued under the TCPA and other privacy statutes, and helps companies adopt policies to mitigate their risk. For more information, please contact a member of the firm's Internet Strategy and Litigation group.
[3] Id. § 227(b)(1)(A)(iii). Whether written or oral consent is required depends upon the content of the calls. 47 C.F.R. § 64.1200(a)(1), (2).
[4] See, e.g., Salcedo v. Hanna, 936 F.3d 1162, 1166 (11th Cir. 2019).
[5] 47 U.S.C. § 227(b)(1), (b)(3).
[6] We described this ruling in detail at the time: FCC Issues Omnibus TCPA Declaratory Ruling and Order Addressing Numerous Issues Regarding Calling and Texting Consumers, WSGR Data Advisor (Sept. 11, 2015), https://www.wsgrdataadvisor.com/2015/09/fcc-issues-omnibus-tcpa-declaratory-ruling-and-order-addressing-numerous-issues-regarding-calling-and-texting-consumers.
[7] 885 F.3d 687, 695–700 (D.C. Cir. 2018).
[8] See Marks v. Crunch, 904 F.3d 1041(9th Cir. 2018); Duran v. La Boom Disco, Inc., 955 F.3d 279 (2d Cir. 2020).
[9] See Dominguez ex rel. Himself v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018); Glasser v. Hilton Grand Vacations Co., LLC, 948 F.3d 1301 (11th Cir. 2020); Gadelhak v. AT&T Servs., Inc., 950 F.3d 458 (7th Cir. 2020).
[10] No. 15-cv-00985-JST, 2017 U.S. Dist. LEXIS 22562, at *14–15 (N.D. Cal. Feb. 16, 2017).
[11] 926 F.3d 1146, 1151 (9th Cir. 2019) (quoting Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1053 (9th Cir. 2018)).
