Business Law

Supreme Court Holds Automatic Dialer Under TCPA Must Use a Random or Sequential Number Generator

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In Facebook v. Duguid, — S. Ct. —-, 2021 WL 1215717 (Apr. 1, 2021), a unanimous United States Supreme Court on April 1, 2021, resolved more than a decade of Telephone Consumer Protection Act (TCPA) litigation and untold millions of dollars in claims by disentangling the contorted definition of automatic telephone dialing system (ATDS), or autodialer. Courts have struggled to uniformly define this equipment, creating a Circuit split. One side takes an expansive interpretation, concluding that equipment could be deemed an autodialer if it is capable of storing telephone numbers to be called whether or not the equipment used a random or sequential number generator. The other takes a much narrower view, concluding that the equipment must either store or produce telephone numbers using a random or sequential number generator. In an opinion by Justice Sotomayor, the Court unanimously adopted Facebook’s narrow interpretation of ATDS. Specifically, the Court held that in order to qualify as an ATDS, a device must have the “capacity to use a random or sequential number generator to either store or produce phone numbers to be called.”  Slip Op. at 12. 

Most modern technology does not employ a “random or sequential number generator.” For this reason, the Facebook decision is likely to place most modern technology, including predictive dialers that automatically dial from a list, outside the scope of the TCPA’s ATDS provision. This is a big win for businesses as it significantly increases the type of technology companies may use to call cellular phones without violating the TCPA.

Businesses should still be mindful, however, that the Court left undecided what “capacity” means in the context of the statute  Thus, if a dialer has two modes, one that employs a random/sequential number generator and one that does not, it remains unanswered whether it has the requisite “capacity to use a random or sequential number generator.” It is also noteworthy that this decision only impacts the type of technology that qualifies as an ATDS under the TCPA. It does not impact the TCPA’s separate requirements, such as the do-not-call provisions, restrictions on use of pre-recorded messages, or the limits on the volume of debt collection calls or time of day that certain calls can be made. One thing is clear: the TCPA has not gone away and callers should continue to carefully consider how best to comply with its provisions to avoid further litigation and regulatory risk.

Authored by Paul Grammatico and Michael Guerrero on April 13, 2021.  Paul A. Grammatico is an Of Counsel at Kabat Chapman & Ozmer LLP. Michael R. Guerrero is a Partner at Hinshaw & Culbertson LLP

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