Supreme Court narrowly construes autodialer in favor of TCPA defendants

Houston, TX – The United States Supreme Court issued a big win for TCPA defendants today, resolving a widening circuit split on what technology is considered an “autodialer” and subject to TCPA liability. For years, lower courts disputed whether Congress’ definition of “autodialer” in the 1991 law applied to those modern technologies that do not neatly fit within the TCPA’s statutory definition. For example, in Facebook, Inc. v. Duguid, the technology at issue was Facebook’s “login notification system,” which is “an optional security feature that sends users ‘login notification’ text messages” to a phone number the user provides “when an attempt is made to access their Facebook account from an unknown device or browser.” No. 19-511, 2021 WL 1215717, at *3 (U.S. Apr. 1, 2021). The Supreme Court adopted a narrow interpretation, leaving it to Congress to address how the law should apply to calling systems that fall outside the TCPA’s ATDS definition. Id. at *7.

The TCPA defines an “automatic telephone dialing system” (ATDS or autodialer) 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.” 47 U.S.C. § 227(a)(1). Several Circuits, including the Third, Seventh, and Eleventh Circuits, adopted a narrow reading, holding that “‘using a random or sequential number generator’ modifies both ‘store’ and ‘produce’; thus, a dialer that “exclusively dials numbers stored in a” database “neither stores nor produces numbers using a random or sequential number generator[.]” Gadelhak v. AT&T Services, Inc., 950 F.3d 458, 460 (7th Cir. 2020).[1] The Second, Sixth, and Ninth Circuits took a broader approach, holding the phrase “‘using a random or sequential number generator’ modifies only the verb ‘to produce,’ and not the preceding verb, ‘to store’; thus, it is sufficient for an ATDS “to merely have the capacity to ‘store numbers to be called’ and ‘to dial such numbers automatically.’” Duguid v. Facebook, Inc., 926 F.3d 1146, 1151 (9th Cir. 2019).[2]

The Supreme Court rejected the plaintiff’s (the respondent on appeal) expansive “interpretation of an autodialer,” which “would capture virtually all modern cell phones, which have the capacity to ‘store… telephone numbers to be called’ and ‘dial such numbers.’” Facebook, 2021 WL 1215717, at *6. Such an expansive definition of an autodialer, the Supreme Court reasoned, would “encompass any equipment that merely stores and dials telephone numbers” and “would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.” Id. The Supreme Court also rejected the plaintiff’s appeal to congressional intent and legislative purpose, see id. at *7, ultimately concluding that “Congress’ definition of an autodialer requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator,” id. at *5. Any issue with that definition must be taken up with Congress. Id. at *7.

In sum, the Supreme Court’s narrow interpretation of an ATDS is a win for TCPA defendants, as TCPA actions and settlements have been mounting for years affecting companies’ ability to interact with their customers.

McDowell Hetherington is a national litigation firm that has appeared in matters in nearly every state in the country and has significant experience defending TCPA lawsuits. For more information or to discuss how this may impact any pending TCPA suits, contact McDowell Hetherington attorneys Matt Matthews, Will Thomas, Diane Wizig, or David Villarreal.

[1] See also Dominguez on Behalf of Himself v. Yahoo, Inc., 894 F.3d 116, 119 (3d Cir. 2018) (same); Glasser v. Hilton Grand Vacations Co., LLC, 938 F.3d 1301, 1306-307 (11th Cir. 2020) (same).

[2] See also Duran v. La Boom Disco, Inc., 955 F.3d 279, 290 (2d Cir. 2020) (same); Allan v. Pennsylvania Higher Educ. Assistance Agency, 968 F. 3d 567, 579–580 (6th Cir. 2020) (same).