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Supreme Court TCPA ATDS Ruling a Big Win for Telemarketers

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Richard B. Newmanhttp://www.hinchnewman.com
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

On April 1, 2021, the U.S. Supreme Court issued a unanimous decision in the matter of Facebook, Inc. v. Duguid that is a big win for telemarketers and TCPA defense lawyers.  The ruling settles expansive interpretations of what constitutes an “automated telephone dialing system” by TCPA plaintiffs’ attorneys and various courts throughout the country.

The Court held that devices that just store numbers from a pre-made list do not qualify as an ATDS under the TCPA.  Only devices that have the capacity to store or dial using a random or sequential number generator are covered by the TCPA statute, the Court held.

It is also worth keeping in mind that human intervention is not necessarily determinative when it comes to assessing whether a particular technology constitutes an ATDS.  In fact, in its opinion, the Court states that “[A]ll devices require some human intervention, whether it takes the form of programming a cell phone to respond automatically to texts received while in “do not disturb” mode or commanding a computer program to produce and dial phone numbers at random.  We decline to interpret the TCPA as requiring such a difficult line-drawing exercise around how much automation is too much.”

The issue is now simply whether a technology has the “capacity” to store or dial using a random or sequential number generator.  However, while it mentioned it, the Court did not analyze the meaning of “capacity.”  Query how courts will address this issue, to wit, whether a telemarketer must actually use the technology.

Of course, this ruling does not abrogate the TCPA’s restrictions on numbers on the national Do-Not-Call registry, or pre-recorded and artificial voice telephone calls.  With respect to the former, there is an every-increasing wave of TCPA cases alleging Do-Not-Call violations.

The Court’s ruling limits the reach of the Telephone Consumer Protection Act by narrowing what technology qualifies as an automatic telephone dialing system.  However, it merely illustrates a shift regarding the ever-expanding interpretation of what constitutes an ATDS definition.  TCPA compliance remains extremely important, including, but not limited to, ensuring that prior express written consent is still obtained for those subject to the TCPA and assessing whether your company uses technology that has the capacity to store or dial using a random or sequential number generator.  Contact experience telemarketing compliance counsel with question about this important ruling, remaining limitations and practical impacts upon telemarketing.

Richard B. Newman is an FTC lawyer and advertising practices attorney at Hinch Newman LLP. Follow FTC defense lawyer on National Law Review.   

Attorney advertising. Informational purposes only. Not legal advice.

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