Businesses Receive Clarity on What Automated Calls and Texts Violate the TCPA

The Supreme Court’s Facebook, Inc. v. Duguid decision finally settled the confusion over what equipment constitutes an automatic telephone dialing system (a robodialer) that can violate the Telephone Consumer Protection Act (TCPA). Consumers have filed a mountain of class actions—collectively seeking billions in statutory damages—in the past two decades over unwanted robocalls and texts that they received from businesses calling using software rather than manual dialing. It was unclear, however, whether the software or technology actually violated the TCPA.

The act defines automatic telephone dialing systems as equipment that 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.”  But lower courts split on whether this phrase applied more broadly to equipment that can store and dial numbers, even if it doesn’t use a number generator (i.e., a smartphone that can store and then dial numbers).

The court answered “no.” The court explained that “[t]o qualify as an ‘automatic telephone dialing system,’ a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.” Random or sequential number generation is essential to violating this portion of the act.   

The decision vindicated defendant Facebook’s position that its software for automatically texting users about their account was not an “autodialer.” While the equipment could automatically dial or text numbers, it did not generate them using a random or sequential number generator. Facebook instead obtained the numbers directly from its users and stored them in a list.    

The court’s decision has massive consequences. The TCPA carries statutory damages of up to $1,500 for offending calls, and liability from one dialing campaign could cripple a business. Because most modern technology uses prepopulated or targeted lists, rather than random or sequential ones, the universe of equipment that businesses can safely use to dial clients and customers without consent has expanded significantly.   

The decision doesn’t mean that all technology is safe to use and all phone-line-related communications are without risk. The TCPA still imposes liability for violations of the Do-Not-Call List, calls using artificial or prerecorded voices, and unsolicited fax advertisements. The court also flagged a potential violation if “an autodialer [uses] a random number generator to determine the order in which to pick phone numbers from a preproduced list.”

If you have any questions about how to proceed or you are facing a TCPA claim, call your Payne & Fears attorney for assistance.