It’s not an April Fools’ Day joke. After years of uncertainty as to what an “automatic telephone dialing system” (ATDS) actually means under the Telephone Consumer Protection Act (TCPA), the Supreme Court has put that question to rest.
On April 1, 2021, the Supreme Court ruled in Facebook, Inc. v. Duguid that “[t]o qualify 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.” Facebook, Inc. v. Duguid, No. 19-511, 2021 U.S. LEXIS 1742, at *2 (U.S. Apr. 1, 2021).
Duguid had alleged that Facebook violated the TCPA by maintaining a database that stored phone numbers and programming its equipment to send automated text messages. Facebook argued that the TCPA does not apply because the technology it used to text Duguid did not use a “random or sequential number generator.” The Ninth Circuit disagreed, holding that the TCPA applies to a notification system like Facebook’s that has the capacity to dial automatically stored numbers.
The Supreme Court handily rejected that argument. Thus, if your dialing system does not 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, it is not an ATDS.
What about the “human intervention test”?
Lower courts previously analyzed the extent to which a system utilized human intervention, i.e. click-to-dial systems, to help determine whether a system was an ATDS, but this led to inconsistent interpretations across the circuit courts. Interestingly, the Supreme Court refused to adopt a “human intervention test” when assessing the TCPA’s ATDS definition:
[A]ll devices require some human intervention, whether it takes the form of programming a cell phone to respond automatically to texts received while in “do not disturb” mode or commanding a computer program to produce and dial phone numbers at random. We decline to interpret the TCPA as requiring such a difficult line-drawing exercise around how much automation is too much.
Because the Supreme Court refused to interpret how much human intervention is required, this test will no longer be a standard of how to interpret whether a dialing system is an ATDS.
What does this ruling mean for businesses?
If your dialer is not an ATDS under the Supreme Court’s ruling, you do not need to obtain express consent to call cell phones unless you are also using a prerecorded voice. Texts are also permitted without express consent if you are not using an ATDS. This will make it much easier and more efficient for businesses to communicate with consumers.
Does this mean the TCPA is essentially dead?
Not at all. The TCPA still requires consent to call cell phones if you are using a prerecorded voice regardless of whether you are using an ATDS under the Supreme Court’s ruling. In addition, you cannot make unsolicited marketing calls—whether they are made to cell phones or landlines—if the person is the federal “do-not-call” list. Other behavioral restrictions will still apply.
However, this ruling will limit the TCPA’s application to a much smaller number of dialing systems and make it much harder for a plaintiff to argue that a dialing system is an ATDS. This should lead to a reduction in frivolous TCPA class actions.