Facebook Case Seen as Best Chance for SCOTUS to Rule on ATDS

SCOTUS could end hundreds of pending lawsuits if the court agrees with Facebook, said Becca Wahlquist of Snell & Wilmer. Everyone hates robocalls, but that’s not what’s at stake, she said. “The litigation is targeting text messages” from “legitimate” businesses, she said. In two decades, Wahlquist said, she has never represented what most would think of as a robocaller. The courts, not Congress, expanded the definition of ATDS, she said. For the solicitor general to file in favor of a plaintiff is “really rare,” she said.

Justices will focus on a single central question: “whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’” Consumer advocates favor a broad definition, while lawyers who represent defendants in TCPA cases advocate a more constrained approach (see 2007130062).

The 9th U.S. Circuit Court of Appeals’ definition in Jordan Marks v. Crunch San Diego (see 1809210029) is in industry’s crosshairs. Noah Duguid filed a class-action lawsuit against Facebook in 2015 after he began receiving text messages warning him about suspicious account activity, even though he didn’t have a Facebook account. Duguid says Facebook didn’t respond to his complaints and did nothing to stop the messages.

The 7th and 11th circuits ruled that a platform must generate phone numbers to be considered an ATDS. The 2nd, 6th and 9th circuits ruled that a platform can be an ATDS as long it merely stores phone numbers to be called later.

Consumers see “more than ample support” for a broad interpretation in the decisions from three of the federal circuits, said National Consumer Law Center Senior Counsel Margot Saunders. “That support comes from legislative history, as well as just simply interpreting the words in the statute,” she said. “We are hopeful that [SCOTUS] will see the light and follow three circuits.” Saunders was disappointed in the administration pleading but said it likely reflects a pro-business bent: “It’s a political decision.”

"This is the best opportunity yet for the Supreme Court to provide much-needed clarity,” said Hogan Lovells’ Mark Brennan. “In the earlier TCPA cases, the Supreme Court found other avenues to resolve the case without having to reach the ATDS issue. Here, it seems likely that the court will provide at least some parameters around the technologies subject to the law."

“Facebook knows nearly everything about us: our biographical details; our relationships; our work, education, and home addresses; places we go, friends we keep, searches we make, ads we click; and much more -- including our phone numbers,” Duguid told the high court. “Facebook now asks this Court to let it and others use that information to make unwanted robocalls and texts to cellphones,” he said: Only the TCPA “stands in the way.”

“If the Court rules as Petitioner proposes and interprets the ATDS definition to encompass only equipment that generates and automatically dials random or sequential telephone numbers, the consequence will be that autodialed calls and texts to all cell phones and the other protected lines will be virtually unstoppable,” said the National Consumer Law Center, Consumer Federation of America and Consumer Reports. “Business cell phones will effectively be unprotected from all automated texts and all automated calls that do not include a prerecorded voice.”

Sen. Ed Markey, D-Mass., and 20 other members of Congress supported Duguid. “Even with the TCPA in place, robocalls are already threatening the viability of the telephone as a useful means of communication for commercial, governmental, or social uses,” they said in a brief. Congress defined ATDS to “encompass systems like predictive dialers that dial telephone numbers stored in a list or database … and systems that dial arbitrary numbers produced by a random or sequential number generator,” they said.

The 9th Circuit’s “expansive construction of the ATDS definition is incompatible with text, context, common sense, and principles of constitutional avoidance,” Facebook wrote: “That reading converts a statute designed to protect ordinary consumers and businesses from abusive telemarketers into one that threatens ordinary consumers and businesses with potentially massive TCPA liability and raises unprecedented overbreadth problems.”

The U.S. Chamber of Commerce, Business Roundtable, American Bankers Association and other business groups support Facebook. “Modern businesses must communicate with their customers in a rapid, efficient manner,” they said, which is hampered by the threat of lawsuits. “Businesses face impossible choices when making these communications, and so customers are deprived of them,” they said. The 9th Circuit’s definition “captures nearly every modern calling device, from the equipment that organizations use to make these communications to the smartphone in your pocket,” the groups argued.

The FCC hasn't provided clarity on the TCPA in response to the D.C. Circuit’s 2018 remand in ACA International v. FCC, No. 15-1211 (see 1803160006). ACA shot down two key agency decisions from 2015 and affirmed two others.

“Since 2015, the uncertainty around the definition of an ATDS has been a drain on legitimate marketing across the country,” said Kelley Drye’s Steve Augustino. “The question has become more uncertain in the interim, particularly as the FCC has failed to act in the ACA International remand,” he said. “The question is squarely presented in the Facebook case and all parties have asked the Supreme Court to provide greater guidance, so the chances are greater that the court will provide the clarity the industry seeks. We all are hoping that this will resolve the circuit split and narrow the questions for the FCC to address on remand in ACA International.”