Thursday, December 17, 2020

What Is an ATDS and Why Should I Care?

The Supreme Court had more on its plate last week than considering how to respond to election fraud claims made by Donald Trump. On December 8, the court heard oral arguments in Facebook Inc. v. Duguid, a case that has been anticipated by many who have had to determine what they could do when using phone calls or texts to reach customers.

For 10 months, Facebook sent text messages to Noah Duguid, without his consent, alerting him that someone was trying to access his Facebook account. An account Noah did not even have. Noah Duguid sued Facebook.

Such phone calls or texts are governed by the Telephone Consumer Protection Act of 1991 (TCPA), one of the few privacy-related laws that allow for a private right of action. Multi-million dollar lawsuits have stymied businesses who have failed to comply with the consent requirements of the TCPA.

At issue in Facebook Inc. v Duguid, is whether the TCPA definition of an “automatic telephone dialing system” (ATDS) encompasses any device that can “store” and “automatically dial” telephone numbers, even if the device does not “use a random or sequential number generator.”

Facebook argued that the equipment it used to send the text messages to Noah was not an ATDS and it was therefore not in violation of the TCPA. Facebook also contended its First Amendment rights would be violated if it were found liable.  

The TCPA only applies if an ATDS is used so understanding what constitutes an ATDS will be a key factor in any decision in this case. An ATDS is defined in the TCPA as “equipment which has the capacity … to store or produce telephone numbers to be called, using a random or sequential number generator.” 47 U.S.C. § 227(a)(1)(A). 

What does “capacity” mean? Is a smartphone an ATDS? 

The Supreme Court might apply a narrow definition of ATDS to mean only systems with the “capacity” to dial randomly or sequentially, or take a broader view of ATDS and have it apply to all dialers that can store from a list of numbers. This broad interpretation may bring smartphones within the ATDS ambit and make their use subject to the TCPA.

So how did the Justices respond to the oral argument? 

Facebook argued that the ATDS definition applies only to dialers that call randomly. In its view, Congress intended a very narrow ATDS definition because a broader TCPA would have violated the First Amendment. Counsel for Noah Duguid argued that the purpose of the TCPA was to protect us from unwanted calls so the TCPA should be read broadly in accordance with that goal.

It is always difficult to discern how the Supreme Court may decide a matter based on their questioning during oral argument. 

It should be noted that counsel for Noah Duguid was Bryan Garner, the editor of Blacks’ Law Dictionary, and a renowned scholar on statutory interpretation. The lawyers and Justices spent much of their time with arcane discussions of grammar and explanations of the technology at issue. Bryan Garner relished the role as grammarian and English professor.

Some Justices suggested the TCPA from 1991 was outdated and had language that was a poor fit for modern technologies. 

  • Justice Thomas suggested that perhaps text messages should not be treated under the TCPA like phone calls as there were no text messages in 1991 when the TCPA was enacted.
  • Justices Gorsuch and Thomas went so far as to point out that, while the Supreme Court had never claimed the authority to deem a statute obsolete, the TCPA might be a good candidate.

Garner argued that privacy can only be protected by a broad reading of the TCPA. Facebook took the position that privacy was not at issue and Congress didn’t really care about privacy when the TCPA was enacted in 1991. 

According to Garner, the TCPA’s language should be subject to the same interpretive rules as we would apply to cookbook recipes. If the recipe states, “using a spatula, lift the omelette and tilt the pan” according to Garner no one would believe that that spatula should be used to do the tilting. According to Garner, the spatula phrase is meant to apply only to the omelette.

A significant part of the oral argument focused on grammar and syntax including references to adverbial modifiers and conjunctive versus disjunctive distinctions. 

Justice Barrett asked Garner his thoughts on “synesis” — a linguistic concept by which strict grammatical rules are abandoned in favor of what makes sense in common usage.

It will be interesting to see how conservative Supreme Court Justices who interpret the text of statutes and the constitution in the way intended by the drafters at the time they were drafted interpret the meaning of “capacity” and what constitutes an ATDS. There will likely be a fundamental difference between these textualists and the Justices who may interpret the law in light of current technology and circumstances.

Why is this important to businesses? 

Businesses increasingly communicate with their customers via text messages and phone calls to provide more efficient customer service. If a smartphone is deemed an ATDS, the recipient of such a call or text could sue for $500.00 anytime a call or text is made without express consent and up to $1,500 per call or text if willful. TCPA litigation has already resulted in a multitude of class action lawsuits and million dollar settlements. No harm must be proven and there is no cap on statutory damages. 

TCPA litigation arises when one or more of the following statutory violations occurs: (1) automated calls or text messages are made without the required prior consent of the recipient; (2) calls or text messages are made to telephone numbers registered on the Federal do not call list; (3) calls or text messages are made to consumers who have specifically requested that the company stop calling or texting; and (4) failure of the company engaging in calls or text messages to implement and maintain the required procedures.  

What can a business do now to reduce liability? 

While we wait patiently as the textualists and grammarians debate the more modern and liberal Justices on the meaning of capacity and what constitutes an ATDS, businesses can limit their TCPA liability by: 1) maintaining or transitioning to a system involving manually dialed phone numbers without the use of pre-recorded messages; or 2) obtaining appropriate consent for the type of message at issue; and 3) ensuring compliance with do-not-call lists and requests.

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