April 19, 2021

Volume XI, Number 109

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April 16, 2021

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Supreme Court Resolves Circuit Split on “Autodialer” Definition, Narrowing TCPA Applicability

On April 1, 2021, the Supreme Court answered a question that has been at the heart of the recent wave of class-action litigation under the Telephone Consumer Protection Act of 1991 (TCPA) in its long-awaited ruling in Facebook, Inc. v. Duguid. Contrary to decisions from lower courts and expansive rulings from the Federal Communications Commission, the Court adopted a narrow (and caller-friendly) reading of the TCPA that appears to exclude most modern dialing technology (including predictive dialers) that targets known lists of customers from the definition of “automatic telephone dialing system” and instead appears to include only to seldom-used robocalling machines with the capacity to dial numbers randomly or sequentially.

IN DEPTH


With limited exceptions, the TCPA prohibits calling a wireless phone number using an ATDS unless the caller has obtained either “prior express consent” for informational calls or “prior express written consent” for telemarketing calls.

The problem is that until the Duguid ruling, no one could agree on what an ATDS actually is. The 1991 statute defines an ATDS opaquely 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 class-action plaintiffs in Duguidrepresented by legal-writing professor and lexicographer Bryan Garner—argued that the modifier “using a random or sequential number generator” applied only to the word “produce” and not “store” in the definition’s first clause. But citing Mr. Garner’s treatise (co-authored with the late Justice Scalia), the Court applied the “series-qualifier canon” and ruled that the random/sequential number generator requirement applies to the sentence as a whole. Indeed, the problem with the plaintiffs’ broad argument was its absurd implications, including that even an iPhone would appear to meet the definition of an ATDS and thus apply substantial penalties for ordinary calls made without prior express consent.

What are the real-world implications of this linguistic tussle? The definition of ATDS is now a narrow one, and it appears to exclude modern dialing technology (including predictive dialers) that targets known lists of customers—and appears to apply only to seldom-used robocalling machines with the capacity to dial numbers randomly or sequentially (e.g., 555-1000; then 555-1001; then 555-1002, and so on). While this ruling may increase the number of calls that we all receive, it appears to be in keeping with the original intent and plain meaning of the statute.

NEXT STEPS

For now, this decision is a significant victory for the companies that rely on automatic dialing to communicate with their customers.

However, we offer three notes of caution:

  • It is too soon to abandon the processes for obtaining and tracking consumer intent when relying on predictive dialing or other similar systems. District and circuit courts may apply Duguid narrowly, making it hard to dodge TCPA cases on a motion to dismiss. Prudence counsels patience here, as we wait to see how Duguid will be applied in a pragmatic way by the lower courts.

  • This decision does not address the TCPA’s parallel restrictions on calls placed using an artificial or pre-recorded voice. Accordingly, callers must still obtain the appropriate level of consent for these calls.

  • The reality is that this decision will lead to all of us receiving more calls and texts from businesses. Some people welcome such messages as an effective way to get an appointment or prescription reminders, post-discharge instructions, account security alerts, or myriad other helpful messages. But an increase in automated calls is likely to be an unpopular outcome. Senator Ed Markey, a co-author of the TCPA in 1991, has already stated that he intends on introducing legislation to amend the TCPA to “fix the Court’s error.” Thus, callers should continue to remain diligent in capturing necessary consent and maintaining adequate documentation of records to demonstrate that they have done so before calling or texting.

We will continue monitoring these developments in the lower courts along with any proposed legislation.

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© 2021 McDermott Will & EmeryNational Law Review, Volume XI, Number 97
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About this Author

Daniel F. Gottlieb, Health Care Industry Attorney, McDermott Will Emery Law firm
Partner

Daniel Gottlieb is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Daniel represents a wide range of health care industry clients, including health care providers, health information technology vendors, pharmaceutical companies, medical device companies, and health plans.  He has extensive experience in advising clients on compliance with federal and state health care laws as well as representing health care industry clients in mergers, acquisitions, joint ventures, and...

312 984 6471
Matthew L. Knowles, McDermott Law Firm, Commercial Litigation Attorney
Associate

Matt Knowles focuses his practice on complex commercial litigation and government investigations. He represents clients in a broad range of civil and criminal proceedings at the trial and appellate levels in state and federal court.

Matt graduated cum laude from Harvard Law School, where he was the recipient of the Charles H. Smith Bequest Scholarship in 2009 and 2010, and was named a Dean’s Scholar in the Federal Courts and the Federal System. He served as an honors legal intern in the Office of Legal Counsel for the US Department of...

617-535-3885
Matthew Cin, McDermott Law Firm, Chicago, Cybersecurity Law Attorney
Associate

Matthew R. Cin focuses his practice in technology transactional and regulatory matters, with particular focus on software licensing and data privacy and security in the United States and internationally. He represents technology companies, cloud service providers, health care providers, health information technology vendors, retailers, financial institutions and consumer analysis providers with US and international privacy, security and security breach response issues, including navigating the Health Insurance Portability and Accountability Act of...

312-984-2099
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