Privacy Litigation 2022 Year In Review: TCPA Litigation

In 2021, the Supreme Court’s landmark opinion in Facebook, Inc. v. Duguid changed the TCPA landscape when it adopted a narrow definition of an “autodialer” as “a device [with] the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.” 141 S. Ct. 1163, 1167 (2021). Over the past year, courts across the country have continued to interpret Duguid, and guidance from several federal courts of appeals has begun to emerge.

Can we get your number?

Attempting to exploit what they viewed as some ambiguity in the Duguid opinion, some plaintiffs’ lawyers have tried to argue that an autodialer includes equipment that generates random or sequential numbers that could be indexed or linked to phone numbers. But the Ninth Circuit shut this theory down in Borden v. eFinancial, LLC, No. 21-35746, 2022 WL 16955661 (9th Cir. Nov. 16, 2022). The court held that “[w]hile we all wish for fewer calls and messages from marketers,” the Supreme Court “used the common shorthand ‘numbers’ to mean ‘telephone numbers’”—a randomly generated index number corresponding to a telephone number thus would not suffice. Id. at 5–6. The District of Connecticut reached a similar decision in Soliman v. Subway Franchisee Advertising Fund Trust Ltd, No. 3:19-cv-592 (JAM), 2022 WL 2802347 (D. Conn. July 18, 2022). As in Borden, the Court concluded that even if plaintiff was right that defendant Subway’s dialing system used “a process called indexing a random or sequential number generator [ . . .] to select which numbers to store and which numbers to produce to the auto-dialer to send text messages,” it would not qualify as an autodialer because it did not generate random telephone numbers. Id. at *1.  The court reasoned that under plaintiff’s theory, the TCPA “would likely cover every call placed by a computer or smartphone,” a proposition rejected in the Duguid decision, and it would “take a chainsaw to the[] nuanced problems [of robocalls] when Congress meant to use a scalpel.”  Id. at *2.  (emphasis in original) (internal quotations omitted).

If A Phone Rings in a Forest…

What if a server has the capacity to generate random telephone numbers, but doesn’t use it?  This was the question that the Third Circuit addressed in Panzarella v. Navient Solutions, Inc., 37 F.4th 867 (3d Cir. 2022).  The Panzarella plaintiffs were the brother and mother of a student who had taken out loans with defendant student loan servicer Navient Solutions. When the student applied for his loans, he provided both plaintiffs’ cellphone numbers, and when he became delinquent on his loan payments, Navient called the plaintiffs. Navient’s server had the capacity to generate random 10-digit numbers, but this feature went unused; instead, Navient’s server stored a list of numbers associated with student loan accounts and relayed those numbers to its dialing system. To address whether this system counted as an autodialer the Third Circuit completely sidestepped Duguid, instead constructing its own analysis from the ground up and held that to meet the definition of autodialing, “one must use its defining feature—its ability to produce or store telephone numbers through random—or sequential—number generation.” Id. at 879. Because Navient’s dialing system did not make use of its capacity to generate random telephone numbers, it did not violate the TCPA.

Brewing Conflict

In Beal v. Outfield Brew House, LLC, the Eighth Circuit relied on Duguid in ruling that an automated marketing system that sent promotional text messages to phone numbers randomly selected from a database of customers’ information did not “produce” telephone numbers to be called.  29 F.4th 391, 394-95 (8th Cir. 2022). Plaintiffs contended that defendants, two bar operators, pestered them with unwanted calls, “point[ing] to dictionary definitions and common uses of the term ‘produce’ to suggest it includes ‘select’ or ‘bring forth.’” Id. at 394. The court rejected this argument as “isolated and contextless,” finding that “just as an electrical generator does not produce by selecting electricity, a random number generator does not produce by selecting a random number.” Id. at 394-95. “Txt Live is exactly the kind of equipment Facebook excluded ‘from equipment that merely stores and dials telephone numbers,’” the court continued. Id. at 395. “And while Appellants argue Txt Live differs from the system in Facebook because it uses a numerically-based randomizer to shuffle and select phone numbers … Facebook was not concerned with how an automatic texting system may organize and select phone numbers.” Id. at 395-96.

Conclusion

Although many courts are still reckoning with Duguid nearly two years after it was decided, the courts of appeals are beginning to offer more guidance about what systems actually qualify as an autodialer, providing more certainty and predictability for businesses engaged in telephone and text marketing campaigns.