A Year After SCOTUS' Duguid Decision, Companies Still Face TCPA Lawsuits

In the aftermath of the Supreme Court’s decision a year ago in Facebook v. Duguid, Telephone Consumer Protection Act lawsuits continue to be filed, lawyers told us, though at a lower rate than before the court acted. A year ago, a unanimous court sided with Facebook (see 2104010063), favoring a narrow definition of what constitutes an automatic telephone dialing system (ATDS). Lawyers also warned that some states, led by Florida, are engaging and that some litigation is shifting to the states.

Since the Duguid case was decided, a number of plaintiffs have brought cases based on footnote 7 in the Facebook opinion, which suggests “an autodialer might use a random number generator to determine the order in which to pick phone numbers from a preproduced list,” lawyers said. Plaintiffs argue that equipment “that uses a random or sequential number generator to determine the order in which to dial phone numbers from a preproduced list constitutes an ATDS,” said law firm McGuireWoods in a note to clients.

“The Supreme Court’s unanimous decision in Duguid provided clear direction to callers, courts, the FCC and litigants about the correct interpretation” of ATDS, said Hogan Lovells’ Mark Brennan: “Despite the pitched rhetoric by some that the court’s decision would lead to more robocalls, it has not. This underscores what legitimate callers have been saying all along, the robocall problem is being driven by fraudsters and scammers who aren’t following the TCPA regardless of how you interpret ATDS.”

TCPA cases aren’t going away, Brennan said. “Post-Duguid, we’ve seen a meaningful drop in TCPA litigation filings, though the plaintiffs’ bar remains active in this space,” he said. “We’ve also seen increased activity at the state level, with more ‘mini-TCPAs’ starting to appear,” he said.

“There was not the immediate fall off of ATDS allegations and cases I was hoping would come, because the Supreme Court opinion was very clear,” said Kelley Drye’s Becca Wahlquist. Wahlquist said she has followed all the decisions since the Duguid ruling. “There are still ATDS cases pending out there, lots of them, as many circuit courts haven’t yet weighed in, and some district court decisions have allowed ATDS claims to move forward,” she said.

For the first months after the Duguid decision, district courts “were kind of reluctant to recognize how sweeping that ruling was, so they weren’t dismissing cases out of hand,” Wahlquist said: “Then there was this big movement where a ton of district courts started saying, ‘You know, the allegations you’re making in your complaint are about targeted calls to customers and you are a customer of this company, so that just isn’t going to be an ATDS. It’s not a randomly and sequentially generated number if a company is calling you at the number you gave them.’”

Wahlquist said in the most recent decision of note, the 8th U.S. Circuit Court of Appeals rejected a footnote 7 argument last month in Beal v. Truman Road, as did the 9th Circuit in an unpublished decision. In Beal, a bar was using customer-provided numbers, shuffling them using software and sending the customers texts saying they had won a free drink, she said. Plaintiffs claimed the bar was randomly generating numbers to call, she said. “The 8th Circuit was really firm” and said because the numbers were provided by customers they weren’t generated by ATDS, she said. The decision "was a big deal,” she said. “That’s the first circuit case decision after Facebook, interpreting Facebook,” she said.

Some action has moved to the states, led by Florida, Wahlquist said. She predicted more cases will be filed in state courts.

“The new revisions to the Florida Telemarketing Act and the Florida Do Not Call Act provide robust protection to consumers from unwanted communications,” said Florida-based law firm Jimerson Birr: “It also forces many businesses to revisit how they conduct their marketing and consumer communications. These changes should not be taken lightly. Florida businesses should conduct a thorough evaluation of their telemarketing policies and procedures to ensure compliance.”

“Most of the litigation has involved interpretations of a footnote in the Duguid opinion, that can be read to suggest that a system that randomly selects a number from a non-random list could be an ‘autodialer’ subject to the TCPA,” emailed Gus Hurwitz, professor at the University of Nebraska College of Law: “Most courts seem to be rejecting that interpretation.” He said, “the real action on the robocall front has been, is, and will remain focused on implementation of STIR/SHAKEN.”

The FCC could provide more guidance on TCPA issues, but that’s unlikely under a split 2-2 commission, said Nelson Mullins’ Steven Augustino. He mentioned a recent letter Chairwoman Jessica Rosenworcel sent Rep. Vern Buchanan, R-Fla., that warned of diminished protection for consumers after the Duguid ruling.

“The chairwoman’s recent request to Congress to provide additional authority to address autodialers is an indication that there is not sufficient consensus to tackle the big TCPA issues right now,” Augustino said: “The principal attention appears to be focused on stopping scam calls and fraudulent robocalling schemes. Here there is unanimity in purpose and an urgent desire to stem the flow of such calls. I expect the FCC to take more aggressive enforcement, with increasing attention on those entities closest to the origination of the fraudulent calls.”

"In light of the Facebook case, the Chairwoman hopes Congress will act to clarify the definition of autodialers to help protect consumers against unwanted robocalls," an FCC spokesperson emailed.