The U.S. Supreme Court has clarified the definition of an autodialer in the Telephone Consumer Protection Act (TCPA). The case, in which the Insights Association had joined an amicus brief, potentially clears up decades of convoluted and conflicting rules and decisions from the Federal Communications Commission (FCC) and various courts that have tied legitimate actors in knots and fueled a deluge of class action litigation.
Writing the 9-0 decision, Justice Sonia Sotomayor railed against expansive interpretation of autodialer technology to "encompass any equipment that merely stores and dials telephone numbers" as taking "a chainsaw to these nuanced problems when Congress meant to use a scalpel."
Howard Fienberg, VP Advocacy of the Insights Association, the leading nonprofit trade association representing the marketing research and data analytics industry, commented that, "this unanimous decision from the nation's highest court sets the TCPA on the right track, for the first time in many years, to fulifill its original purpose: targeting and punishing bad actors abusing consumers via the phone system, instead of punishing law-abiding good actors who try to abide by reasonable practices."
The 1991 TCPA law requires prior express consent to use an automatic telephone dialing system to call a cell phone. Such as system is defined as "equipment which has the capacity … to store or produce telephone numbers to be called, using a random or sequential number generator." That was intended to counter a telemarketing technology and tactic of the time to call every number in existence, or in the phone book, including emergency lines and people with cellphones (who were paying a fortune for every minute of every call received). Nowadays, cell phones are the only means to reach most consumers by phone, and As explained in IA's amicus brief, that provision “targeted a specific, now-eradicated practice: telemarketers whose equipment randomly or sequentially dialed numbers and thereby shut down hospital switchboards, knocked out nascent cellular networks, and aggravated consumers with pricey per-minute charges."
The Supreme Court adopted a narrow interpretation of the law based upon its wording and its "statutory context." Sotomayor summarized the ruling: "The question before the Court is whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not “us[e] a random or sequential number generator.” It does not. To qualify as an “automatic telephone dialing system,” a device must have 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."
IA outside counsel Stuart Pardau welcomed the Supreme Court ruling as one "that will limit, but not eliminate, future TCPA cases." However, Pardau warned insights professionals to not let their guard down on TCPA compliance just yet, since they will "still need to ensure that: (1) their dialing systems are configured to comply with applicable laws; and (2) appropriate agreements with clients, vendors and other partners remain in place."
The Insights Association had joined an amicus brief in the case, with 10 other business groups, including the U.S. Chamber of Commerce, American Financial Services Association, and Business Roundtable. Facebook had filed this case right after the Supreme Court ruled in Barr v. AAPC last year that the TCPA should remain intact, but struck down a 2015 exemption for calls collecting government debt. The Insights Association has been awaiting a court decision like this since at least March 2018, when IA and others prevailed against the FCC’s 2015 rules in a DC Circuit Court case.
"Even as rampant TCPA class actions took advantage of unclear guidance and artificially drove up the cost of research via phone, IA has been advocating for clarification and reform at the FCC, in Congress, and in court, in defense of the insights industry's ability to conduct research," Fienberg noted. While the Insights Association will provide members with further analysis in the coming days, he said, "we haven't lost sight of continuing threats, such as unfettered call blocking and labeling by default, nor have we forgotten the need for the FCC to respond to our petition with AAPOR seeking a legal differentiation between marketing and research in the TCPA, since the muddling of that difference continues to drive unnecessary lawsuits against insights companies."
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