Next TCPA Ruling Is Unlikely To End Autodialer Saga

January 26, 2021Articles Law360

After a difficult 2020, the first half of January 2021 has reminded us in stark terms that the close of one difficult chapter does not guarantee the next one will be better.

Businesses expecting the demise of the Telephone Consumer Protection Act's robocall restriction should take note. The recent change of control in the U.S. Senate could mean that any end to the restriction's terrible reign is short-lived. If not careful, its next chapter may introduce an even worse Frankenstein's monster.

The End of an Era?

On Dec. 8, 2020, the U.S. Supreme Court heard argument in Facebook Inc. v. Duguid, a case testing the continued efficacy of the TCPA's limits on the category of robocalls made to consumers using an automatic telephone dialing system, or ATDS, which Congress defined to mean "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 calls."[1]

Aptly described during argument as very nuanced language that reflects a great deal of legislative compromises, the odd placement and punctuation of the phrase "using a random or sequential number generator" has been a source of controversy.

The U.S. Courts of Appeal for the Third, Eleventh, and Seventh Circuits have read the phrase to modify both "store" and "produce," meaning an ATDS must have the ability to randomly or sequentially generate numbers and to dial them.[2]

The U.S. Court of Appeal for the Ninth Circuit ruled oppositely in Marks v. Crunch San Diego LLC, holding the phrase attaches only to the word "produce," bringing devices with the mere ability to store and dial numbers within the statute's ambit.[3] The U.S. Courts of Appeal for the Second and Sixth Circuits agreed with the outcome of Marks, solidifying a circuit split.[4]

The consequence for businesses with texting or calling programs is that, as of this writing, a caller's potential liability for a initiating a single series of contacts varies wildly by jurisdiction — even if they are made from a single device or system.

Companies sued in the Third, Eleventh and Seventh Circuits can benefit from a narrowly tailored view of the statute that excludes most commercial dialers now in use.

Unfortunate targets in the Ninth, Second and Sixth Circuits face interpretations arguably as expansive as the FCC's view rightly rejected by the U.S. Court of Appeal for the D.C. Circuit in 2018 as "unreasonably, and impermissibly, expansive."[5] Defendants elsewhere are left to guess.

With the Supreme Court now set to enter the fray, we should soon know whether the Ninth Circuit's Marks opinion resurrected the ATDS restriction or merely granted a reprieve. The justices' questions at oral argument elucidated key concerns that suggest the latter.

Oral Argument in Facebook v. Duguid

The parties' arguments in Duguid brought into sharp relief the difficulty that all have faced pinning down the exact role Congress intended the phrase "using a random or sequential number generator" to play within the ATDS definition.

No shortage of intellectual firepower was on display as the lawyers and Justices delved into grammatical concerns like sentence structure, syntax and synesis. The panel heard talk of restrictive modifiers, punctuation, modifying phrases and direct objects. Later, disjunctive and lexical verbs moved to the fore.

More than anything, though, the advocates' expertly nuanced grammatical dissertations landed softly. Ultimately, more practical concerns took precedence.

What kind of dialers existed in 1991? What capabilities did they have? How did Congress intend to regulate that equipment? How does the text of the statute apply to modern devices, both business and personal? How would the court's adoption of each alternative affect callers and call recipients? A greater picture emerged as the justices explored different facets of the competing regimes.

Practical Consequences

Encouraging for callers, several of the justices voiced skepticism for the respondents' reading.

Justice Sonia Sotomayor expressed serious concern that the respondents' approach would subject regular smartphone users to an onslaught of TCPA claims.

Justice Neil Gorsuch implied the TCPA could "make a criminal of us all" under the respondents' view.

Justice Amy Coney Barrett posited that autoreplies from an iPhone would fall within the scope of the statute, thus covering all calls made using that device.

Justice Samuel Alito noted the practical problem for the respondents' view comparing the function of call forwarding technology that was widely available in 1991 and the capacity of smartphones to dial numbers automatically based on preprogrammed commands.

Justice Clarence Thomas went further to question whether Congress meant for calls to include text messages, a huge source of TCPA liability for conduct not possible in 1991.

The respondents' parries to these concerns, when not rejected outright, showed the vulnerability of their position and often departed from the typical positions of TCPA plaintiffs.

The most glaring example of this came during an exchange with Justice Sotomayor.

Agreeing with Facebook's view that respondents' reading would subject "every cell phone owner ... to the harsh criminal and civil penalties of the TCPA," Justice Sotomayor asked for an explanation of why Congress would have intended that result. It was a difficult question, and in my view the most critical of the day, because there was, and is, no good answer for the respondents.

Let's take the respondents' arguments in turn.

Article III judges know how to deal with frivolous claims. This point presupposes that the claims will wholly lack merit, and that dealing with such is trivial. In the justice's hypothetical, the opposite is true.

Courts will be forced to reckon with these claims in the ordinary course. Individual defendants will be forced to hire lawyers or appear in federal court pro se. Ordinary folks will face statutory damages claims that can bankrupt them.

The average person will not use their smartphone as an ATDS. This probably is inaccurate in the context of the act, but it does not matter. In the justice's hypothetical, at least one standard feature of most smartphones will implicate the statute. Whether a person uses that feature is without consequence. Congress structured the statute to focus on a device's capacity, not its use.

The respondents' counsel, Bryan Garner, a top expert on modern legal usage, seemed to suggest the court could read a use limitation into the ATDS restriction based on the fact of the word "automatic" in ATDS. A later exchange with Justice Gorsuch illustrated why this approach must fail:
Justice Gorsuch: [A]ll the statute says is you have to have equipment that stores a number and can be used to dial the number. ...

Garner: [T]hat's the word being defined, automatic dialing system, and it must be the equipment itself that does the dialing.

Justice Gorsuch: No, the equipment has to have the capacity to store and it has to have the capacity to dial. It doesn't say it must do it solely by itself. I mean, now we're really changing the grammar, aren't we?

The ordinary smartphone user will have consent. This might be true in the colloquial sense of the word, but many of our contacts will not have given prior express consent to receive calls from an ATDS.

Worse, in a very best case scenario of clear consent, the affirmative defense cannot be made until summary judgment — only after the individual defendant and courts have incurred significant time and costs. Plus, the gaps are enormous.

As experienced TCPA callers know well, numbers are reassigned. Phones are shared. Consent is revoked. What's more, if consent is our best defense against back-breaking TCPA liability, every smartphone will need to track consent.

Policy Considerations

Probably sensing the difficulties of his position as it relates to ordinary smartphones, Garner often pivoted to policy. As framed by the respondents, Facebook advances a viperine interpretation of the statute to terrible effect: "Like a viper, it kills the statute and privacy."

It does not, but an inconvenient truth for callers is that adoption of Facebook's approach may result in more unwanted calls to cell phones. But should that matter?

Justice Brett Kavanaugh smartly noted during argument that, because Congress chose not to subject residential calls to the ATDS restriction, its enactment might have been "about something other than privacy."

Thinking back to the societal ills prompting the act, it is a reasonable inference to make. The limited features of cellphones in 1991 meant the threat of bombardment to all people, at all places, at all times did not exist. But the phones were expensive, with costly pay-by-the-minute calling plans.

Perhaps, then, Congress' main aim in limiting ATDS calls to cellphones was a financial one. And perhaps the point in other instances, such as with emergency calls, was to advance public safety. If a majority of the court agrees, the respondents are in trouble.

Surplus Surplusage

The main threat emerging for business callers at oral argument related to the surplusage canon. Questioning from Justices Elena Kagan, Alito and Gorsuch appeared to suggest that, in their estimations, Facebook's reading hinged on whether Congress sensibly could have meant the phrase "using a random or sequential number generator" to modify "to store" in 1991.

Counsel arguing in support of Facebook appeared to clear these hurdles citing industry amici briefs detailing the equipment available to callers in 1991. Adding to respondents' troubles, it may not matter if Facebook falls short. The Marks view has the same problem and worse.

If the court defines ATDS to capture every device that can store and dial numbers, the phrase "using a random or sequential number generator" will have no role to play. Maybe that is what the phrase deserves for the trouble it has caused, but effectively deleting it from the text seems unlikely.

Not only would such an approach depart from the prevailing view at enactment, but it also would smack of judicial overreach — a hesitation voiced by several justices. If the act's problems are rooted in outdated technology, then in the words of Justice Sotomayor, "wouldn't it be [Congress'] job, not [the Court's], to update the TCPA to bring it in line with the times?"

I expect a majority of the court will answer that question, "yes." This means that the ATDS restriction's terrible reign may soon end for business, but don't pop the champagne yet.

Long Live the TCPA?

Another critical contest was gearing up while the parties were presenting arguments in Duguid; this time in Georgia with control of the U.S. Senate at stake. In a precedent-shattering reversal, Georgia voters handed the seats to Democratic challengers Raphael Warnock and Jon Ossoff.[6]

It is too soon to say how this development could influence the future of the consumer legislation like the TCPA. Barring use of the so-called nuclear option, Democrats still do not have the 60 votes needed to break a Senate filibuster and enact a legislative fix without bipartisan support.

The political dynamic nonetheless is certain to change in ways that could affect the chances for, and substance of, an ATDS rewrite if the Supreme Court rules for Facebook in Duguid.

At minimum, the shift ensures President Joe Biden can win confirmation of his commissioner nominee to an Federal Communications Commission. Controlling the commission will be key should future legislation leave the definition of ATDS to it as 2019's Stopping Bad Robocalls Act proposed.

Further, even a business-friendly outcome in Duguid might not foreclose future rulemakings to define ATDS. Callers would be wise to stay vigilant given that Biden's FCC transition team includes Mignon Clyburn, one of the former FCC commissioners who presided over the extraordinary expansion of the ATDS restriction in 2015.

I cannot predict what will happen with the TCPA in 2021. I think the outcome of Duguid will be beneficial for businesses. Still, public pressure to rein in nuisance robocalls remains, exemplified by comedian John Oliver's big red button on HBO's "Last Week Tonight."[7]

The next round of elections is less than two years away. And it is all too easy to weaponize the true robocalls we all despise to preclude a much broader category of legitimate calls. With the benefit of 2020 hindsight, callers should worry that a Duguid win will not be the final chapter of the ATDS saga.

Adam Ragan is a partner at Fox Rothschild LLP.

[1] 47 U.S.C. §227(a)(1).

[2] Dominguez ex rel. Himself v. Yahoo, Inc. , 894 F.3d 116, 121 (3d Cir. 2018); Glasser v. Hilton Grand Vacations Co., LLC , 948 F.3d 1301, 1306 (11th Cir. 2020); Gadelhak v. AT&T Servs., Inc. , 950 F.3d 458, 464-65 (7th Cir. 2020).

[3] Marks v. Crunch San Diego, LLC , 904 F.3d 1041, 1052 (9th Cir. 2018).

[4] Duran v. La Boom Disco, Inc. , 955 F.3d 279, 284 (2d Cir. 2020); Allan v. Pa. Higher Educ. Assistance Agency , 968 F.3d 567, 574 (6th Cir. 2020).

[5] ACA Int'l v. Fed. Commc'n Comm'n , 885 F.3d 687, 700 (D.C. Cir. 2018).

[6] Nathaniel Rakich, Geoffrey Skelley, Laura Bronner & Julia Wolfe, How Democrats Won The Georgia Runoffs, FiveThirtyEight (Jan. 7, 2021, 2:47 PM), https://fivethirtyeight.com/features/how-democrats-won-the-georgia-runoffs/.

[7] Laura Bradley, Can John Oliver Troll the F.C.C. into Ending the Scourge of Robocalls?, Vanity Fair (Mar. 11, 2019), https://www.vanityfair.com/hollywood/2019/03/john-oliver-robocalling-prank-fcc-ajit-pai-last-week-tonight.

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