SCOTUS Clarifies Definition of ATDS in Facebook Win
In a win for companies facing Telephone Consumer Protection Act lawsuits, a unanimous Supreme Court Thursday sided with Facebook, favoring a narrow definition of what constitutes an automatic telephone dialing system (ATDS) in Facebook v. Duguid. SCOTUS reversed and remanded an earlier decision by the 9th U.S. Circuit Court of Appeals, which said any device that stores and automatically dials telephone numbers can be considered an ATDS under TCPA.
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Lawyers who represent TCPA defendants said in interviews the court provided long-sought clarity and addressed a split in the judicial circuits. Consumer groups predicted a flood of unwanted texts to cellphones.
“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’),” Justice Sonia Sotomayor wrote in the 9-0 opinion: “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 excludes equipment like Facebook’s login notification system, which does not use such technology.”
Expanding the definition of an autodialer, as Noah Duguid asked, 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,” Sotomayor wrote. Justices heard the case in December (see 2012080053). Justice Samuel Alito released a concurring opinion. Duguid sued after Facebook sent him repeated texts alerting him that someone had allegedly logged into his account using an unrecognized device, though he didn’t ask for the texts or have a Facebook account.
“As the Court recognized, the law's provisions were never intended to prohibit companies from sending targeted security notifications and the court's decision will allow companies to continue working to keep the accounts of their users safe,” Facebook General Counsel Jennifer Newstead said in a statement.
“It’s now up to Congress and state legislatures to protect Americans from the torrent of robocalls and spam texts that will result from this ruling,” emailed Lemberg Law managing attorney Sergei Lemberg, who represents Duguid. He clarified in an interview that any federal or state legislation “should prohibit robocalls or spam texts” from a broader range of ATDS devices.
Sen. Ed Markey, D-Mass., and Rep. Anna Eshoo, D-Calif., said they “plan to soon introduce legislation to amend” TCPA to “fix the Court’s error” in Facebook. If the justices “find their private mobile phones ringing non-stop from now until our legislation becomes law, they’ll only have themselves to blame,” the lawmakers said: Congress intended via TCPA “to ban dialing from a database. By narrowing the scope” of the statute, the court “is allowing companies the ability to assault the public with a non-stop wave of unwanted calls and texts, around the clock.” Markey and Eshoo were among 21 congressional Democrats who jointly filed an amicus brief supporting Duguid (see 2010220064).
“We’re already talking to Congress about closing the gaps,” said National Consumer Law Center Senior Counsel Margot Saunders in an interview. “This decision means that consumers will be completely unprotected for non-telemarketing texts to phones,” and small businesses “will have no protections,” she said. Many calls that were restricted “can now be made without consent, even when the called party says ‘please stop calling me,’” she said.
“A unanimous Supreme Court did in 10 pages what the Trump and Obama FCC chairs could not accomplish in 10 years: issue a clear, reasonable ATDS interpretation so that everyone knows the rules of the road,” said Hogan Lovells’ Mark Brennan. “That all nine justices agreed that ATDS requires the use of a random or sequential number generator underscores how straightforward this issue really was.”
“To me, the issue has always been as clear as it was to the Supreme Court,” said Kelley Drye’s Becca Wahlquist. “It was a relief to have the Supreme Court, in such a simple ruling, go back to the text and the grammar and make it really clear.” The decision gives businesses certainty on how to communicate with their customers “and not face the staggering and annihilating risks of TCPA damages,” she said: “It’s going to help businesses have communications that they need to have with their customers.”
“For years, robocalls have invaded consumers’ privacy and subjected us all to incessant harassment,” said Consumer Reports Senior Policy Counsel George Slover: “Congress needs to fix this, and fast. Or consumers will be vulnerable to their phones being tied up by a potentially constant flood of robocalls and texts, with no way to stop it.”
“Americans rely on countless communications from retailers to make the shopping experience convenient and safe,” said Retail Litigation Center Deputy General Counsel Kathleen McGuigan: “The Court recognized the distinction between legitimate retail-customer communications and unwanted robocalls and restored the proper scope” of the TCPA.