TCPA: What the Supreme Court’s ruling means for your next campaign

Things to Know About Your Next Dial Campaign: FAQ on what the Supreme Court’s Latest Ruling in Facebook v. Duguid Actually Means for TCPA Compliance

by Steve Roberts, Andrew Pardue

In a unanimous ruling on April 1, 2021, the U.S. Supreme Court sided with Facebook in rejecting a consumer’s claim for damages under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, and in doing so, defined narrowly what constitutes an automatic telephone dialing system (“ATDS”) as regulated by the TCPA. Here, we answer many key questions partially resolved by this decision and explain how to mitigate against important remaining gaps in the law as you plan your next dial campaign.

  • What changed with the Supreme Court’s decision in Facebook v. Duguid?

The Supreme Court clarified the statutory definition of an ATDS as applying only to systems that have the capacity to “either [] store a telephone number using a random or sequential number generator or to produce a telephone number using a random or sequential number generator.”[1] In other words, the system must have the capacity (i.e., ability) to use a random or sequential number generator in either storing or producing a number to be called. For example, a system is not an ATDS simply because that system can automatically dial stored numbers (like most cell phones), if those numbers were not produced or stored using a random or sequential number generator.

  • So, is a call placed with a “random or sequential number generator” the only type of call regulated by the TCPA now?

No. The Supreme Court’s decision did not touch upon or alter the statutory prohibition on making a call using an artificial or prerecorded voice to a recipient who has not provided express consent, even if not placed using an ATDS.

  • Can I stop using a peer-to-peer dialing system and go back to a computerized dialing system, so long as it does not fall under the Supreme Court’s ATDS definition?

Not without additional risk. Nothing can prevent a plaintiff from suing, even for calls and texts that comply with the TCPA. By continuing to have human operators place each call or send each text message, businesses can add an additional layer of protection against consumer litigation. While not specifically addressed in Facebook, the ATDS definition still includes the requirement that the system be able “to dial” the numbers that were either produced or stored using a random or sequential number generator. As such, the factual question regarding the manner in which systems dial numbers will still be at issue in TCPA cases.

A consumer lawsuit must proceed through several preliminary phases, often resulting in significant cost before the defendant business, political committee, or tax-exempt organization has an opportunity to factually prove that they did not use an ATDS. Therefore, it is better for callers to give themselves numerous factual distinctions to avoid liability and to potentially reduce total litigation costs.

  • How can I be sure my dialing system lacks “the capacity” to function as an ATDS?

After Facebook the essential question is likely whether the equipment used has the capacity to use a random or sequential number generator at all, and not only whether it is currently using that capability. To demonstrate a system does not have “the capacity” to either store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator, that system should not be capable of functioning in that manner in any way. For instance, there should not be a setting or slider that allows a system to go from predictive mode to switch to a random and/or sequential mode. The system should simply lack the capability to function in that manner, short of significant software reprogramming.

  • Do the FCC’s recently announced rules promulgating the TRACED Act, with dialing limits and opt-outs, still apply?

Yes. As we described in a client alert on March 2, otherwise permissible calls under the TCPA using an artificial or prerecorded voice will be limited to 3-in-30 days (unless a recipient provides consent to receive more), and have express opt-out requirements. Since the Supreme Court’s ruling just clarifies the definition of an ATDS but leaves untouched the TCPA’s jurisdiction over calls using an artificial or prerecorded voice, we anticipate the TRACED Act rules will still take effect six months after being printed in the Federal Register.

  • Is this the final word on TCPA regulation?

Almost certainly not. We anticipate that the FCC may provide agency guidance through one or more forms clarifying previous guidance in light of the Supreme Court’s decision. Additionally, while bound by precedent on the definition of an ATDS, lower courts will likely introduce new ambiguity in the coverage of the TCPA. For instance, one area ripe for litigation is how an “artificial or prerecorded voice” is defined. Finally, there is always the possibility that Congress could get involved and pass additional legislation modifying the definition of ATDS or other parts of the TCPA.

This memo is for informational purposes only and should not be considered legal advice. Entities should confer with competent legal counsel concerning the specifics of their situation before taking any action.

[1] Facebook, Inc. v. Duguid, No. 19-511, 592 U.S. ___ (April 1, 2021) (slip op. at 1) (emphasis added).



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