Supreme Court Ruling: FACEBOOK, INC. v. DUGUID

Great news for our industry – Facebook won by a landslide

In a decision issued April 1, 2021, the Supreme Court settled a long-running debate over the scope of the TCPA’s “automatic telephone dialing system” definition.  Through a unanimous decision in Facebook v. Duguid (https://www.supremecourt.gov/opinions/20pdf/19-511_p86b.pdf), the court held that toqualify as an “automatic telephone dialing system” under the TCPA, “…a device 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.”

Of significance here, The TCPA prohibits using an “automatic telephone dialing system” to call cellular and certain other numbers without the “prior express consent” of the called party. Prior express consent, as defined by law and regulation, can encompass numbers provided by consumers to their creditors during the transaction at issue or numbers provided by the consumers directly to the collection agency after being read proper disclosures. However, this means that skip-traced, call captured, or other numbers that are not linked back directly to the consumer’s delivery unfortunately cannot be dialed with equipment that qualifies as an automatic telephone dialing system (commonly referred to as an ATDS).

Over the past ten years, the FCC and certain courts have problematically defined ATDS in a manner that liberally incorporates all predictive autodialers, a relative ordinary (but necessary) technology utilized by nearly all call center environments to help make high volume calls in an efficient and strategic manner. This created an issue, in that certain cellular numbers researched and found must be dialed through a less desirable manual (non-automated) track, which does not seem to comport with the original intent of the statute which was to stop certain telemarketing practices.

On April 1, 2021 The Supreme Court cleared the air and gave the credit and collection industry the interpretive result we all hoped for. The Court unequivocally held that devices that merely store numbers from a premade list (i.e. routine predictive dialers used in debt collection) do not qualify as autodialer systems subject to the TCPA. “To qualify as an [ATDS],” explained Justice Sotomayor, writing for Court, “a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number” using either form of generation. With this victory in the books, agencies and their clients will now be able to use 21st century dialing  technology without having to fear incongruent TCPA restrictions that have the stymied the industry.

Of course, with every great result comes a grain of caution and a reminder of where statutory gaps remain that create exposure. Allow me to therefore note that completely separate from ATDS prohibitions, the TCPA still prohibits calls using “an artificial or prerecorded voice” to various types of phone lines, including home phones and cell phones unless the call falls within an applicable exemption (and the FCC is further rolling back these exemptions with their late 2020 actions). This will be the last remnant of the TCPA that survives, so we must pay close attention. Plaintiffs attorneys will key in on this piece for survival, with ATDS provisions now gutted. As the court succinctly but perhaps ominously  says regarding artificial or prerecorded voice rules,  “Our decision does not affect that prohibition…”

Still, this case will be one for the ages and one that will provide us and our industry partners with newfound opportunities to reach and engage with our customers. We are already working hand in hand with our IT and Business Intelligence Departments as well as with our outside dialer vendors to finally remove some of these age old dialing restrictions. The key is to do so in a complaint and orderly manner, to ensure that we are covered from all angles to enjoy the case’s articulated immunities and protections. With great optimism, I leave you with the pivotal words of Justice Sotomayor, who resolved this ambiguity once and for all:

“Consider the TCPA’s restrictions on the use of autodialers. As previously noted, §227(b)(1) makes it unlawful to use an autodialer to call certain “emergency telephone line[s]” and lines “for which the called party is charged for the call.” §227(b)(1)(A). It also makes it unlawful to use an autodialer “in such a way that two or more telephone lines of a multiline business are engaged simultaneously.” §227(b)(1)(D). These prohibitions target a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity.

Expanding the definition of an autodialer 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. Duguid’s interpretation of an autodialer would capture virtually all modern cell phones, which have the capacity to “store . . . telephone numbers to be called” and “dial such numbers.” §227(a)(1). The TCPA’s liability provisions, then, could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses.”

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