The Post-Facebook TCPA Landscape: How the Supreme Court Opinion on the Definition of ATDS Changed Legal Risk for Businesses Texting or Calling Consumers | Buchalter


Consumer protection law by telephone has been a source of significant legal risk for any business communicating with consumers by phone or text for more than a decade. The TCPA prohibits making calls without consent to cell phones using an “Automatic Telephone Numbering System” (“ATDS”) and contains a private right of action that provides for statutory damages of $ 500 up to 1,500 $ by offending call or SMS. Importantly, the broad interpretations by the courts and the FCC of what constitutes an ATDS – at times so broad that it encompasses everyday smartphones – have sparked a conflagration of class actions against companies in many cases. many industrial sectors, including financial services, retail, energy and healthcare.

As of 2018, however, this wave of TCPA class actions began to peak after a circuit split evolved over the interpretation of the legal definition of an ATDS. Were modern systems that automatically called or sent SMS from a database considered ATDS? Or was the definition limited to the old random / sequential dialers that plagued American households with telemarketing calls when the TCPA was adopted in 1991?

In mid-2020, the Supreme Court granted certiorari in the case of Facebook vs. Duguid to solve this circuit division. On April 1, 2021, the Supreme Court issued its opinion in Facebook, holding that “[t]o be qualified as an “automatic telephone numbering 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 a random or sequential number generator. ” Facebook, Inc. v. Duguid, 141 S.Ct. 1163, 1167 (2021). Based on this narrow interpretation of the ATDS definition, the Court concluded that the definition “excluded equipment such as Facebook’s login notification system,” which sends automated login notification texts to its users. .

The opinion of the Court in Facebook dramatically reduced the risk of using automated technology to call or text consumers’ cell phones for the simple reason that the technology probably no longer meets the ATDS definition as interpreted by the Supreme Court. However, while the Court’s opinion was very positive in this regard, there are still many other aspects of the TCPA which remain a potential source of legal risk. By assessing the impact of FacebookIt helps to start by focusing on the three key things the TCPA prohibits:

(1) Information and telemarketing calls or text messages made to mobile phones equipped with an ATDS;

(2) Information and telemarketing calls made to mobile phones or landlines with an artificial or pre-recorded voice;

(3) Telephone requests addressed to telephone numbers registered in the National Register of Excluded Telecommunications Numbers

The legal risks associated with each category of prohibition in the post-Facebook The TCPA landscape is discussed below.

Automated calls and SMS

Prior to Facebook, the extension of the ATDS definition to encompass information communications made with predictive dialing equipment, mass SMS platforms and similar technology has spawned some of the largest TCPA class actions, leading to hundreds of claims millions of dollars poured into class-wide settlements by American companies. Activities such as debt collection appeals, account alert text messages, prescription reminders, and utility notifications have become fraught with legal dangers as plaintiff lawyers have exploited overly broad interpretations of the law. ATDS definition to hammer home companies that have dared to communicate with their customers using efficient automated technologies.

These types of informational calls and SMS are the greatest benefactors of risk reduction resulting from Facebook. Indeed, according to the interpretation of the Supreme Court, the definition ATDS probably no longer extends to the technology used to send these messages given the absence of the required functionality of generation of random or sequential numbers. Concretely, this means that consent is probably no longer required to make purely informational calls or texts on cellphones (but, as discussed below, that does not mean that companies should ditch the core protocols of registration and unsubscription).

In addition, before Facebook, “telemarketing” calls or texts (that is, calls or texts made with the aim of promoting the purchase of a good or service) carry very high risks. This is because the TCPA imposes an increased requirement of “prior express written consent” for any telemarketing call or text made to a cell phone using an ATDS. “Prior Express Written Consent” is a legally defined term consisting of several elements requiring a signed agreement, with various disclosures subject to a visibility requirement. These requirements have added additional levels of risk to any business seeking to call or text consumers for promotional or marketing purposes. As a result of Facebook, these increased consent requirements probably no longer apply. Importantly, marketing and promotional calls remain subject to regulation under the separate TCPA rules for the National Do Not Call Registry, which are discussed below.

It is important to recognize that Facebook reduces, but does not completely eliminate, the risks associated with calling or texting in this category. This is mainly because some lawyers for the plaintiffs, in their final throes, will try to persuade the lower courts that modern dialing and SMS technology still somehow meets the definition of ATDS. , even under the narrow interpretation of the Supreme Court. These efforts have not yet fully penetrated the lower courts. For example, at least one lower court has ruled that the allegations of impersonal text messages are sufficient to plausibly make a plausible case for the use of an ATDS as interpreted by the Supreme Court, meaning that the matter will have to be treated with evidence in summary judgment. Montanez v. Future Vision Brain Bank, LLC, 2021 WL 1291182 (D. Co. April 7, 2021).

Pre-recorded or artificial voice calls

The opinion of the Supreme Court in Facebook did not address the TCPA’s ban on pre-recorded and artificial voice calls, so the status quo remains for these types of calls, which continue to present a higher risk profile. The TCPA prohibits calls using a pre-recorded or artificial voice message to both landlines and mobile phones without the consent of the called party. As with the ATDS restrictions, if the call is made for the purpose of “telemarketing” then the increased requirement of “prior express written consent” will apply.

National Do Not Call Register

Also unaffected by Facebook is the TCPA ban on “telephone solicitations” to telephone numbers registered on the National Do Not Call Register (“DNC”). Note that these regulations are triggered by the content of the message, not the type of technology used to make a call or text. Similar to the definition of “telemarketing”, “telephone canvassing” refers to any call made for the purpose of encouraging the purchase of a good or service. There are, however, two key exceptions to this term. Telephone solicitations do not include calls or text messages to a consumer with whom the caller has an “established business relationship” (“EBR”), or who has provided their “prior express invitation or authorization” to be called. An EBR is defined as either a consumer request for the company’s products or services made in the three months preceding the call, or a transaction with the consumer within the 18 months preceding the call. The term “prior express invitation or authorization” is defined as a signed writing in which the consumer agrees to receive calls to a specified telephone number. It is important to note that both are terminated when a consumer requests a withdrawal.

The DNC rules also impose other requirements that businesses should be aware of, including complying with opt-out requests, maintaining internal do-not-call lists, and a no-call policy.

It is important to note that, compared to the much more onerous “express prior written consent” requirements applicable to “telemarketing” calls made with an ATDS, the DNC rules give businesses much more flexibility to design phone and SMS campaigns. compliant. So, although marketing and promotional calls remain subject to regulation under the TCPA, this flexibility provides businesses with more ways to mitigate the legal risk arising from such campaigns.

Take away food

The opinion of the Supreme Court in Facebook is expected to result in a change in the way companies assess and mitigate TCPA risk arising from phone call or text message campaigns. To summarize:

  • Automated information calls benefit from the most significant risk reduction
  • Promotional / marketing messages are still subject to regulation under DNC rules, but companies have more flexibility in designing compliant campaigns
  • The status quo remains on pre-recorded or artificial voice calls

It is important to note that the opinion of the Supreme Court in Facebook should not be viewed as an authorization to flood consumers with calls or text messages. There remain a number of reasons outside of the TCPA for continuing to maintain basic opt-in and opt-out procedures. These reasons include customer experience, reputational risk, and still applicable industry guidelines such as those promulgated by the CTIA. Given these considerations, companies are wise to connect with outside advisers experienced in the many nuances of TCPA to assess their risks and adjust their practices as needed.

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