Client Alert: Warning: This Is Not An April Fool’s Joke—Scotus Says That To Be An “ATDS” Under The Telephone Consumer Protection Act There Must Be Capacity To Use A Random Or Sequential Number Generator

Consumer Finance Blog Apr 1, 2021 Fort Lauderdale, FL

After much anticipation, the Supreme Court of the United States issued its Opinion in Facebook v. Duguid, resolving a circuit split as to the definition of an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”) by stating an autodialer is defined based on “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’).” The unanimous decision authored by Justice Sotomayor in favor of Facebook held: a device must have “the capacity to use a random or sequential number generator to either store or produce phone numbers” to qualify as an automatic telephone dialing system under the TCPA. Thus, with the use of the rules of punctuation along with statutory construction, the Court clarified a key issue that dialing from a list of pre-loaded numbers from a system that does not have the capacity to use a random or sequential number generator, would not fall under the definition of an ATDS.

The Court highlighted a major problem with the Respondent Duguid’s desire for a broader interpretation—which sought to define an ATDS as any equipment that merely stores and dials telephone numbers without the random sequential number generator requirement—in that it “would take a chainsaw to [the] nuanced problems” the Telephone Consumer Protection Act was intended to address “when Congress meant to use a scalpel….” Indeed, the Supreme Court recognized that the alternative definition proposed would capture virtually all modern cell phones. That is exactly the result the District of Columbia Circuit Court of Appeals already shunned in ACA Int’l v. Fed. Commc’ns Comm’n, when it stated it “is untenable to construe the term ‘capacity’ in the statutory definition of an ATDS in a manner that brings within the definition’s fold the most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country. It cannot be the case that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact.” 885 F.3d 687, 688 (D.C. Cir. 2018) We can expect similar arguments to now be applied to cases interpreting other definitions in the TCPA such as “prerecorded voice” in the context of addressing soundboard technology, which may reach SCOTUS as well.

Today is April 1, but this is not a trick—and is likely to the dismay of those who relied upon the previously applied over-expansive definition to pursue class actions under the TCPA. While this is welcome news to businesses using telemarketing, it will be important to remain vigilant and mindful that certain devices will still be considered “ATDS,” as well as the fact that there are “Do-Not-Call” rules, prerecorded and artificial voice rules, state telemarketing laws, and other rules and regulations that impact marketing technology and remain unaffected by the latest Facebook opinion. We remain available to help in both compliance and litigation defense on the forefront of the TCPA.

The Order can be seen here.

Data Privacy and TCPA Litigation Team

Marketing and TCPA Compliance Team

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This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

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Client Alert: Warning: This Is Not An April Fool’s Joke—Scotus Says That To Be An “ATDS” Under The Telephone Consumer Protection Act There Must Be Capacity To Use A Random Or Sequential Number Generator

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