New TCPA Rulings Suggest Shorter Life For Autodialer Suits

• Published date: 22 October 2021
• Subject Matter: Consumer Protection, Media, Telecoms, IT, Entertainment, Mobile & Cable Communications, Dodd-Frank, Consumer Protection Act
• Law Firm: Kelley Drye & Warren LLP
• Author: Ms Becca Wahlquist and Lauri A. Mazzuchetti

The Telephone Consumer Protection Act bar has been watching closely the federal court decisions coming down over the past six months in the wake of the U.S. Supreme Court's Facebook v. Duguid decision.¹

The Facebook opinion was clear and unanimous, but now comes the real test of the strength of the Facebook opinion: Can it keep meritless claims based on automatic telephone dialing systems from embroiling a defendant in expensive and burdensome discovery, potential expert battles and extensive summary judgment briefing on ATDS?

Courts have thus far been divided on how early to consider the ATDS question in a litigation, but a growing number of strong and well-reasoned decisions provides hope that many ATDS-based lawsuits can be stopped at the pleadings stage of litigation.

Background ' The Facebook Decision

In Facebook, the Supreme Court had been called upon to resolve a deepening circuit split. Starting about a decade ago the plaintiffs bar had been able to expand the reach of the ATDS to the point where in several federal circuits ' including the Ninth and Second Circuits ' any system that could merely store telephone numbers was to be considered an ATDS. ^2]

As to what dialers could support claims of illegal use of an ATDS, the Supreme Court was clear about the statutory definition of ATDS located in Title 47 of the U.S. Code, Section 227(a)(1):

Congress' definition of an autodialer requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator.³

The Supreme Court thus came down on the side of the U.S. Courts of Appeal for the Seventh and Eleventh Circuits, which each held that for a system to be an ATDS, it must randomly or sequentially create telephone numbers ' not merely dial numbers from a stored database.⁴

In the context of reviewing a motion to dismiss, the court found that Facebook's targeted text alert messages to a customer-provided number were not made using a random or sequential number generator, and that no viable claim of illegal use of an ATDS could be made.

It was very significant that the ruling was definitive and made in the context of a motion to dismiss: The Supreme Court signaled that the lack of a viable ATDS claim could be determined from the pleadings alone, without requiring any further discovery, where it was clear that Facebook was placing targeted calls to the plaintiff's telephone number.

Developments Since Facebook in Responsive Pleadings

For a few heady weeks after that April 1 decision, there was real hope that the Supreme Court's clear rejection of expansive ATDS definitions would finally put an end to "gotcha" TCPA litigation brought against thousands of businesses that were contacting only targeted and customer-provided numbers.

Not all that surprisingly, when the significant and often staggering amounts of available...