Ever since the Supreme Court granted review in Facebook, Inc. v. Duguid, businesses facing the risk of TCPA class actions have been waiting to see whether the Court would accept or reject a sweepingly broad interpretation—adopted by three circuits and rejected by three others—of what constitutes an autodialer under the statute.
Today, the Supreme Court unanimously reversed (pdf), holding that equipment must be capable of random or sequential number generation in order to qualify as an “automatic telephone dialing system” under the TCPA.
The Court’s holding has enormous practical significance for defendants facing TCPA class actions. The use of random or sequential number generators is not common (certainly far less so today than in 1991 when the TCPA was enacted and those devices were in use), while a wide range of equipment stores lists of numbers to be called. Companies should remain mindful, however, that the Court’s decision affects only alleged violations of the TCPA’s restrictions on the use of autodialers, and not the TCPA’s separate restrictions on the use of artificial or prerecorded voices or on violations of do-not-call regulations.
The TCPA, among other things, restricts certain communications made with an “automatic telephone dialing system” (ATDS), colloquially referred to as an “autodialer.” The statute defines an “automatic telephone dialing system” as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1).
The interpretive question before the Court was whether the phrase “using a random or sequential number generator” modifies both “store” and “produce,” or just “produce.”
As we have previously reported, the courts of appeals were divided on this question. Adhering to its broad interpretation of an autodialer in Marks v. Crunch San Diego, LLC, the Ninth Circuit held in Duguid that Facebook’s equipment, which sent text messages to a set list of numbers stored in its database rather than to random or sequentially generated numbers, nonetheless qualified as an ATDS. The Second and Sixth Circuits subsequently agreed with the Ninth Circuit’s approach. In contrast, the Third, Seventh, and Eleventh Circuits had all held that an autodialer must be able to generate random or sequential phone numbers. (Our firm, including Archis, represented the defendant in the Seventh Circuit case, Gadelhak v. AT&T Services, Inc.)
The Court granted review to resolve this deep circuit split.
The Court’s Opinion
In an opinion by Justice Sotomayor, a unanimous Supreme Court reversed the Ninth Circuit. The Court held that “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.”
The Court began with the text, noting that “conventional rules of grammar” support reading the phrase “using a random or sequential number generator” to apply to both antecedent verbs, “store” and “produce.” The Court first applied the “series-qualifier canon,” which says that a modifier at the end of a parallel list—here, “using a random or sequential number generator”—applies to all of the nouns and verbs in that list—here, both “store” and “produce.” The Court also observed that the clause “store or produce telephone numbers to be called” is a single, cohesive clause, so “it would be odd” to apply the random or sequential number generation requirement to only a portion of that clause.
The Court then noted that its interpretation of the statutory definition “heeds the commands of its punctuation” as well. The fact that Congress used a comma to set off the phrase “using a random or sequential number generator” demonstrated its intent for that phrase “to apply equally to both preceding elements.”
The Court did not rest on text alone but also relied on the “statutory context.” The Court recounted that when Congress passed the TCPA in 1991, it was concerned with the “uniquely harmful” impact of then-emerging technology allowing companies to dial random or sequential blocks of telephone numbers. For example, such technology could “seiz[e] the telephone lines of public emergency services,” or “simultaneously tie up all the lines of any business with sequentially numbered phone lines.” And many of the TCPA’s restrictions on the use of autodialers enacted “[a]gainst this technological backdrop” reflect that Congress was “target[ing] a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity.” For example, the TCPA “makes it unlawful to use an autodialer to call certain ‘emergency telephone line[s]’” (quoting 47 U.S.C. § 227(b)(1)(A)) or “‘in such a way that two or more telephone lines of a multi-line business are engaged simultaneously’” (quoting 47 U.S.C. § 227(b)(1)(D)).
The Court recognized that the autodialer provision of the TCPA was tailored narrowly: “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.” Indeed, the Court warned, the alternative reading of an ATDS “would capture virtually all modern cell phones” and commonplace activities such as speed dialing or sending automatic text message replies—“an outcome that makes even less sense.”
The Court concluded by rejecting the respondent’s counterarguments, noting that they could not overcome the “clear commands” of the statutory text and context. The Court remarked that respondent’s resort to his view of the broad “sense” of the text “would have some appeal” only if traditional tools of interpretation led to an impossible or implausible outcome, which they did not. The Court was unpersuaded by the respondent’s resort to broad statements of Congress’s purpose, noting that they “do not mean it adopted a broad autodialer definition.” The Court observed, for instance, that the statute separately prohibits calls using artificial or prerecorded voices regardless of the technology used—prohibitions that are unaffected by Congress’ narrow definition of an autodialer. And, more fundamentally, the respondent’s “quarrel is with Congress, which did not define an autodialer as malleably as he would have liked.”
Finally, Justice Alito’s short concurrence reflects a thought-provoking dialogue between him and the majority about the proper method of statutory interpretation. He expresses concerns about the majority’s “heavy reliance” on canons of interpretation, which he warns are not “inflexible rules” capable of mechanical application and depend heavily on context. The debate is largely academic in the context of this case, given Justice Alito’s express agreement with the majority’s reading of the statute, but it will be interesting to see how that debate plays out in future cases.