At the beginning of April 2021, the U.S. Supreme Court unanimously ruled in favor of Facebook in Facebook, Inc. v. Duguid, reversing the decision of the Ninth Circuit Court of Appeals , holding: “To qualify as an ‘automatic telephone dialing system’ under the Telephone Consumer Protection Act (TCPA), a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.” This is big news. This precedent will likely be relied on by other defendants in TCPA class action litigation to argue that the technology used to send text messages does not constitute an autodialer and,therefore, the TCPA does not apply.

The TCPA prohibits certain telemarketing tactics by restricting a business’ ability to make certain communications using an automatic telephone dialing system. The TCPA defines “autodialers” as 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. Facebook has a security feature in its platform that allows users to elect to receive text messages when someone attempts to log in to the user’s account from a new device or browser. Plaintiff, Noah Duguid, received these type of text messages from Facebook alerting him to login activity on a Facebook account linked to his telephone number. However, Duguid never created an account on Facebook. Facebook explained in its argument that Duguid may have been assigned a recycled cell phone number that was used by a Facebook user who previously opted into receiving these login notifications. Duguid claimed that he tried to stop the text messages, but he was unsuccessful. Duguid claimed that Facebook violated the TCPA by maintaining a database that stored telephone numbers, and then programming its equipment to send automated text messages. Facebook argued that the TCPA does not apply as the technology used to send those texts to Duguid did not use a “random or sequential number generator.” The Ninth Circuit court held that the TCPA did apply to a notification system that has the capacity to dial automatically-stored numbers.

The Supreme Court’s decision cited the intent of the TCPA when first introduced by Congress, saying that autodialers “threatened public safety by ‘seizing the telephone lines of public emergency services, dangerously preventing those lines from being utilized to receive calls from those needing emergency services.’ Indeed, due to the sequential manner in which they could generate numbers, autodialers could simultaneously tie up all the lines of any business with sequentially numbered phone lines. Nor were individual consumers spared: Auto-dialers could reach cell phones, pagers, and unlisted numbers, inconveniencing consumers and imposing unwanted fees.” [citation omitted.] However, the Supreme Court noted that technology has since changed (including cell phone services and the way we pay for those services), and the nuisance and threat of these autodialers has been lessened.

Neither party disputed the fact that the TCPA prohibits unsolicited text messages without prior express consent, and, therefore, the Supreme Court did not consider or resolve that issue.

The Supreme Court’s decision relies heavily on the literal interpretation of the language and grammar of the TCPA:

This case turns on whether the clause “using a random or sequential number generator” in §227(a)(1)(A) modifies both of the two verbs that precede it (“store” and “produce”), as Facebook contends, or only the closest one (“produce”), as maintained by Duguid. The most natural reading of the text and other aspects of §227(a)(1)(A) confirm Facebook’s view. First, in an ordinary case, the “series-qualifier canon” instructs that a modifier at the end of a series of nouns or verbs applies to the entire series. Here, that canon indicates that the modifying phrase “using a random or sequential number generator” qualifies both antecedent verbs, “store” and “produce.” Second, the modifying phrase immediately follows a concise, integrated clause (“store or produce telephone numbers to be called”), which uses the word “or” to connect two verbs that share a common direct object (“telephone numbers to be called”). Given this structure, it would be odd to apply the modifier to just one part of the cohesive clause. Third, the comma in §227(a)(1)(A) separating the modifying phrase from the antecedents suggests that the qualifier applies to all of the antecedents, instead of just the nearest one.

In the end, the takeaway is that an autodialer (whose use is prohibited by the TCPA) must have the ability to use a random or sequential number generator to either store or produce phone numbers to be called.