Supreme Court Adopts Narrow Autodialer Definition
We have blogged several times before about the Telephone Consumer Protection Act (TCPA) and what is an “autodialer” under the rules and on April 1, 2021 the Supreme Court provided some clarity. As background, in 2015, the Federal Communications Commission (FCC) issued a TCPA Order that, in part, broadly defined what technology might constitute an “autodialer.” This is important because calls and texts made to a cell phone using an autodialer would fall within the scope of the requirement to receive either prior express consent or prior express written consent to call or text a consumer. Under this past Order, even a system with the “potential” to make autodialed calls seemed to potentially fall within the rule’s consent requirements. NAFCU members can find more background on this here.
Multiple groups challenged the FCC's 2015 Order in federal court, including NAFCU and in March 2018 a federal appeals court struck down much of the 2015 Order in the ACA International v. FCC case, including rejecting the broad interpretation of “autodialer” (more details in this NAFCU Compliance Blog post and NAFCU Compliance Monitor article). This left courts applying the TCPA’s statutory definition of an autodialer to determine which technology may or may not be an autodialer for the purposes of the TCPA, often with different results across jurisdictions. Here is that definition for reference:
“…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.”
Some federal courts took a narrow approach in applying this definition, finding that simply having the potential capacity to automatically dial numbers was not sufficient. Other courts took an approach that was broad and similar to the FCC’s 2015 Order, such as the Ninth Circuit court which determined that an autodialer includes technology with “the capacity to call numbers produced by a ‘random or sequential number generator,’ but also includes devices with the capacity to dial stored numbers automatically.” Technology would not need be “fully automatic” to be an autodialer in this court’s view.
This left credit unions with ambiguity as to when consent for certain calls and texts made to members would require consent under the TCPA. To make autodialed calls or texts to members that market products to members, the TCPA requires prior express written consent. To make other kinds of calls or texts to members’ cell phones that are more informational in nature, including collections calls, the TCPA requires prior express consent (could be written or verbal). But now we have clarification from the Supreme Court about what constitutes an autodialer, so there is a set standard that applies in all jurisdictions.
The Court heard arguments in January 2021 in a case involving Facebook that claimed the company’s texts to consumers providing security notifications violated the TCPA. NAFCU filed an amicus brief in the case, and last week in a unanimous decision, the Court adopted a narrow interpretation of the meaning of autodialer under the TCPA. Specifically, the Court held that for technology to qualify as an autodialer under the 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. To be an autodialer, “in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator.” In the Court’s view, adopting an expansive definition of autodialer would “take a chainsaw” where “Congress meant to use a scalpel.” However, some lawyers have noted that the Court did not squarely address whether having the “capacity” to randomly call numbers includes tools that can make random calls, but that feature is not being utilized. In other words, it is not wholly clear whether making use of that technology is necessary to implicate the TCPA. There is some language that seems to state this but the issue is not fully analyzed:
“…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. This definition excludes equipment like Facebook’s login notification system, which does not use such technology…” (Emphasis added.)
Overall, it seems technology that merely makes calls automatically from a stored list of numbers may not arise to an autodialer under the standard set forth by the Court. Using tools like predictive dialers could pose some risk. Credit unions may want to determine whether the systems and technology they use to call or text members with promotional or informational messages make use of random of sequential number generator.
Several law firms have written pieces on this topic that credit unions may find helpful: