Supreme Court Ruling Narrows TCPA ATDS Definition; But TCPA Remains A Litigation Risk

In a decision released last week, Facebook, Inc. v. Duguid, et al., the Supreme Court unanimously ruled that an “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”) “must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.” The decision clarifies that the definition of ATDS does not extend to devices that simply use automated technology to dial from a list of stored numbers. While the clarification may appear to be a huge win for any person who initiates a call or text, the Court’s failure to clarify whether the term “capacity” is current or future capacity with basic modifications, or whether such capacity has to be used to make the call/text in question, ultimately means that not much has changed from a compliance perspective.

The case against Facebook arose from a complaint filed by Noah Duguid, the recipient of unwanted text messages from Facebook alerting him that someone was trying to access a Facebook account that he did not actually have. Duguid made multiple requests to Facebook to stop the alerts, without success. He eventually filed an unsuccessful putative class action lawsuit in California against the social media platform provider. Duguid appealed to the U.S. Court of Appeals for the Ninth Circuit, which ruled in his favor and rejected Facebook’s argument that it sent targeted, individualized texts to numbers linked to specific accounts. The Ninth Circuit interpreted the definition of ATDS to cover devices that had the mere capacity to store phone numbers and dial those numbers automatically.

Facebook appealed to the Supreme Court, which rejected the Ninth Circuit’s expansive interpretation, agreeing with Facebook that the definition of ATDS should not be read so broadly as to capture all current technology (for example, cell phones with basic smartphone functions) and future dialing technology. The Court refrained, however, from resolving the ongoing dispute over the meaning of the term “capacity” in the statutory definition.

With the question of “capacity” still unresolved, the Facebook decision, while perhaps a positive development for risk mitigation purposes and litigation defenses, does not eliminate the risks associated with use of an ATDS. Moreover, and significantly, the Facebook decision has no impact on the statute’s prohibitions related to a caller’s use of artificial or prerecorded voice calls – that is, “robocalls.” Therefore, TCPA compliance requirements remain the same:

• Obtain required level of consent
• Create and maintain proper records documenting consent
• Implement robust opt-out processes – and follow them
• Take necessary steps to avoid calls and texts to reassigned numbers
• Regularly train employees, service providers and call center personnel on TCPA and Do-Not-Call requirements

If you need assistance interpreting how the Supreme Court’s ruling may affect your business, or with TCPA compliance requirements in general, please contact any attorney in this office.

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