Supreme Court Makes a Sensible Ruling on Anti-Autodialing Statute

On April 1, the U.S. Supreme Court released its decision in Facebook v. Duguid regarding the scope of the federal statute that prohibits unwanted robocalls from "autodialers." Justice Sotomayor's opinion for the court, which was joined by seven other justices and unanimous in the result, sums up the anti-autodialing provision, the question before the court, and its ruling:

The Telephone Consumer Protection Act of 1991 (TCPA) proscribes abusive telemarketing practices by, among other things, imposing restrictions on making calls with an "automatic telephone dialing system." As defined by the TCPA, an "automatic telephone dialing system" is a piece of equipment with the capacity both "to store or produce telephone numbers to be called, using a random or sequential number generator," and to dial those numbers. 47 U. S. C. §227(a)(1). The question before the Court is whether that definition encompasses equipment that can "store" and dial telephone numbers, even if the device does not "us[e] a random or sequential number generator." It does not. To 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. 

As the Court notes, the FCC has interpreted the anti-autodialing provision to apply to text messages. At issue in the case was Facebook's sending of text messages to users whose numbers it had stored. This blog takes no view on whatever specific processes or techniques that Facebook used. Rather, the decision was important in rejecting an over-expansive definition of an "autodialer" that potentially would subject countless American's to potential claims under the TCPA:

Expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel. Duguid’s interpretation of an autodialer would capture virtually all modern cell phones, which have the capacity to "store . . . telephone numbers to be called" and "dial such numbers." §227(a)(1). The TCPA's liability provisions, then, could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses. See §227(b)(3) (authorizing a $500 fine per violation, increased to $1,500 if the sender acted "willfully" or "knowingly").  

Professor Daniel Lyons, a member of the Free State Foundation's Board of Academic Advisers, previewed the Court's just-released decision in his Perspectives from FSF Scholars paper titled "Trilogy of Supreme Court Cases Highlight Deficiencies in Anti-Robocall Statute."

Supreme Court Strikes Down Exemption from TCPA's Robocaller Ban

On July 6, the U.S. Supreme Court released its decision in Bar v. AAPC. Although significantly divided, enough Justices could agree that the robocall ban exemption bestowed on government debt collection in 2015 was unconstitutional under the First Amendment. But the Court severed the exemption for government debt collection from the rest of the Telephone Consumer Protection Act of 1991 and upheld the remainder of the Act. In so doing, the Court rejected the Petitioners' interesting First Amendment equal treatment claim that the robocall ban should have been lifted entirely and all robocalls allowed. 

Free State Foundation President Randolph May and I have addressed problems involving other aspects of the TCPA that merit action by the FCC in prior Perspectives from FSF Scholars papers, available here and here.

Supreme Court to Hear Free Speech Case Involving Autodialer Exemption

On January 10, the Supreme Court issued an order granting review in Barr v. American Association of Political Consultants. The case involves the Telephone Consumer Protection Act (TCPA), and it presents the issue of whether the government debt-collection exemption to the "autodialer" provision violates the First Amendment's Freedom of Speech Clause.

Previously, the U.S. Court of Appeals for the Fourth Circuit struck down the TCPA's carve out for government debt collection on First Amendment free speech grounds. The Fourth Circuit determined that the TCPA's government debt-collection exemption amounts to a content-based restriction of speech. It further determined that exemption was not narrowly tailored to further a compelling governmental interest but "fatally underinclusive": "First, by authorizing many of the intrusive calls that the automated call ban was enacted to prohibit, the debt-collection exemption subverts the privacy protections underlying the ban. Second, the impact of the exemption deviates from the purpose of the automated call ban and, as such, it is an outlier among the other statutory exemptions." According to the Fourth Circuit: "The exemption thus
 cannot be said to advance the purpose of privacy protection, in that it actually authorizes a broad swath of intrusive calls. In so doing, the debt-collection exemption exposes millions of American consumers to some of the most disruptive phone calls they receive."

In Bar v. AAPC, the Supreme Court will have the final word on the TCPA exemption's constitutionality. Clearly, Barr v. AAPC has important First Amendment implications. But the Supreme Court's forthcoming ruling will not likely touch on pressing legal uncertainty problems involving other aspects of the TCPA that Free State Foundation President Randolph May and I have addressed in prior Perspectives from FSF Scholars papers (available here and here).

We recommend that the FCC ought to adopt rules to clarify the definition of an "autodialer" under the TCPA. In particular, the Commission should clarify that consumers don't become "autodialers" merely by placing a single call or text from a saved number in their smartphones. Clarifying rules of that sort are not content-based speech restrictions and can thus be adopted consistent with First Amendment free speech precedents. 

FCC Should Follow District Court's Common-Sense Ruling on Autodialers

Free State Foundation President Randolph May and I have previously written about the federal ban on "autodialers" contained in the Telephone Consumer Protection Act (TCPA). In our Perspectives from FSF Scholars paper, "The FCC Should Stop Runaway Liability for Smartphone Owners," we called on the Commission to adopt a sensible definition of "autodialers" that tracks with a plain reading of the TCPA and its intent to combat commercial automated mass robocallers. Going forward, the Commission ought to consider the common-sense reading of the TCPA's "autodialer" provision by a federal district court's decision from September 2019. 

In Smith v. Premier Dermatology, Judge Jorge Alonso of the U.S. District Court for the Northern District of Illinois wrote:

[T]he plain text of the statutory definition provides that an ATDS [autodialer] is a device that (1) stores or produces telephone numbers that (2) were randomly or sequentially generated and (3) dials them automatically. 

Because the Court finds that the statutory definition is not ambiguous, it need not reach plaintiffs' arguments about "the context and the structure of the statutory scheme." …But even if the Court were to consider them, they are unpersuasive. 

The District Court's conclusion that the TCPA's language is unambiguous as well and interpretation of prohibited "autodialer" capabilities are both contrary to the Ninth Circuit's decision in Marks v. Crunch San Diego LLC(2018). As Mr. May and I explained in our Perspectives paper, the Ninth Circuit deemed the relevant statutory language and ambiguous and misinterpreted "autodialers" to include callers using equipment that is merely capable of dialing ortexting a stored telephone number. The court disregarded the TCPA's provision that autodialer equipment also must have number generating capability – and dial the telephone numbers automatically. In consequence, the Ninth Circuit's decision in Marks makes anyone with a smartphone potentially liable under the TCPA for making a single unwanted phone call or text. (I also addressed the autodialer issue in my Perspectives paper, "The FCC Should Halt Bogus Lawsuits Threatening Popular Texting Services.")

A federal district court decision does not create binding precedent. So the legal uncertainty caused by the Ninth Circuit's misguided decision in Marks remains a problem that requires the FCC's attention. However, the Commission should take stock of the District Court's sensible ruling in Premier Dermatology. And the Commission should adopt a narrower autodialer definition that targets mass robocallers while avoiding open-ended liability for all smartphone owners.

Plaintiff Not Going Away in Dubious Lawsuit Threatening Texting Services

On September 18, Plaintiff John Salcedo filed a request with the U.S. Court of Appeals for the Eleventh Circuit for a rehearing en banc in Salcedo v. Hanna. My Perspectives from FSF Scholars paper titled "The FCC Should Halt Bogus Lawsuits Threatening Popular Texting Services" analyzed the Eleventh Circuit's panel decision in Salcedo. The case is a putative class action in which the alleged violation of the Telephone Consumer Protection Act of 1991 (TCPA) was a single unsolicited text message by an attorney to his former client. The Eleventh Circuit panel's decision in Salcedo acknowledged that just a single allegedly text message constitutes an alleged violation under the FCC's current interpretation of the TCPA provision prohibiting "autodialers." Although the Eleventh Circuit held against the Plaintiff for other good reasons, this latest filing indicates the lawsuit isn't going away – at least not yet. 

Salcedo is a case in point for why the FCC needs to modify its TCPA rules to target the real problem robocallers that Congress had in mind rather than leave the door open to lawsuits that appear frivolous. For more, read the Perspectives paper.