Facebook and U.S. Government Submit Final Briefs in Supreme Court ATDS Fight, Oral Argument to Follow

This week, Facebook and the United States government filed responses to Plaintiff’s brief in Facebook, Inc. v. Duguid, the Supreme Court case that promises to resolve the circuit-splitting uncertainty over what does and does not qualify as an ATDS under the TCPA.  The Plaintiff’s brief—which we covered here—argues that the adverbial phrase “using a random or sequential number generator” modifies the verb “to produce” but not the verb “to store” in the statute’s definition of an ATDS.  See 47 U.S.C. § 227(a)(1).  If the TCPA is interpreted in this fashion, liability could follow from using any device that can store and automatically dial a number—including, among other things, virtually every smartphone in use today.

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Despite Absence of Settlement, Unclaimed Funds To Be Distributed To Government Or Charity Rather Than Revert To Dish Network

Last week, the federal judge presiding over a class action against Dish Network (“Dish”) denied a request for reversion of $11 million in unclaimed funds, deciding instead that the funds—which were the product of a trial rather than a settlement—should escheat to the government or be donated to a charity.  See Krakauer v. Dish Network, LLC, No. 14-0333 (M.D.N.C. Oct. 27, 2020).

In denying Dish’s request for reversion, the court explained that “[t]he TCPA is a deterrence statute, and reversion does not support th[at] statutory goal.”  Id. at 10.  It then cited cases for the proposition that unclaimed funds should not revert to a defendant if doing so would undermine the deterrence function of damages.  Id. at 5 (citing In re Lupron Mktg. & Sales Practices Litig., 677 F.3d 21, 32-33 (1st Cir. 2012); Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1307 (9th Cir. 1990)).

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Senators, State AGs, and Consumer-Protection Groups File Amicus Briefs Advocating Broad Interpretation of ATDS Definition

Last Friday, various elected officials and consumer-protection groups filed amicus briefs urging the Supreme Court to adopt the expansive interpretation of the ATDS definition for which Plaintiff Noah Duguid had advocated in a brief he filed the week before.  The recent briefs and other filings in the case can be found here.

The Facebook case arises from a security-alert text message that was sent to an individual who had not consented to automated calls, and at long last presents the Court with the critical question of what is and is not an ATDS.  (Recall that the FCC has said, and courts have either held or assumed, that text messages should be deemed “calls” for purposes of the TCPA.)

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Plaintiff in Facebook v. Duguid Files Supreme Court Brief Supporting Broad Interpretation of ATDS Definition

The Plaintiff in Facebook, Inc. v. Duguid—the case that promises to resolve the growing circuit split over the TCPA’s definition of an ATDS—has filed his merits brief in the Supreme Court.

Recall that the TCPA defines an ATDS as equipment that 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.”  47 U.S.C. § 227(a)(1).  With help from noted grammarian Bryan Garner, who signed the brief as his new co-counsel, Duguid argues that the language of the statute and the canons of construction make clear that the adverbial phrase “using a random or sequential number generator” modifies the verb “to produce” but not the verb “to store.”  For example, he argues that the “distributive-phrasing canon” requires that modifying phrases apply only to words “which, by context, they seem most properly to relate.”  Brief at 20.  Because the verb “to store” does not in his view relate to the phrase “using a random or sequential number generator,” he argues that the Court need not interpret the phrase as modifying “to store.”  Id.; see also id. at 15 (calling this outcome a “semantic mismatch between a modifier and a verb”).  He similarly argues that the “last-antecedent canon”—which provides that a modifying phrase “should ordinarily be read as modifying only the [verb] that it immediately follows”—counsels in favor of construing the adverbial phrase as modifying only the adjacent verb “to produce” and not the other verb “to store.”  Id. at 20-21.

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Advertised Businesses Not Liable for Unauthorized Fax Advertisements, FCC Declares

On September 21, the FCC’s Consumer and Governmental Affairs Bureau issued a declaratory ruling clarifying that businesses advertised via fax should not face “sender liability” for unsolicited faxes sent without prior authorization.  See Declaratory Ruling at ¶¶ 9, 17, In the Matter of Akin Gump, CG Docket No. 02-278 (Sept. 21, 2020).  This ruling provides some much-needed guidance on the scope of sender liability under the Junk Fax Prevention Act, an issue which has divided the courts.

In 2005, the Junk Fax Prevention Act amended the TCPA to prohibit the sending of unsolicited advertisements via facsimile, absent some excepted relationship between sender and recipient.  See Pub. L. No. 109-21, 119 Stat. 359 (2005).  The FCC has defined the “sender” of a fax for liability purposes as any “person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.”  47 C.F.R. § 64.1200(f)(10) (2019).[1]  The Commission also has observed that the “sender” of a fax is usually, but not always, the business advertised in the fax.  See “2006 Junk Fax Order,” FCC Rcd. 3787, 3808, ¶ 39 (2006).

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Businesses, Trade Associations, and Public Policy Groups Flood Supreme Court with Amicus Briefs Supporting Narrow Reading of ATDS Definition

Late last week, numerous trade associations and public policy institutions filed amicus briefs supporting the narrow interpretation of the ATDS definition for which Facebook and the United States had advocated in briefs filed the week before. The case, Facebook, Inc. v. Duguid, arises from an automated security-alert text message to an individual who had never consented to receive such messages. See Facebook Brief at 15. The amicus briefs seek to help the Supreme Court resolve the growing circuit split over what constitutes an ATDS.

The following amici (and others joining with them) filed briefs in support of Facebook: Lyft, Quicken Loans, Home Depot, Salesforce.com, Aetna, Midland Credit Management, Credit Union National Association, Portfolio Recovery Associates, the Retail Litigation Center, the Life Insurance Direct Marketing Association, the Washington Legal Foundation, the Professional Association for Customer Engagement, and the U.S. Chamber of Commerce. The briefs (and previous filings in the case) can be found here.

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Facebook and U.S. Government File Supreme Court Briefs Supporting Narrow Interpretation of ATDS Definition

Last Friday, Facebook and the United States government filed briefs in Facebook, Inc. v. Duguid, the Supreme Court case that promises to resolve the growing circuit split over the interpretation of the definition of an ATDS. The Supreme Court granted certiorari in July, agreeing to review a Ninth Circuit decision that had reversed the dismissal of claims targeting Facebook’s login text alerts.

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Taking Side on Circuit-Splitting Issue, Texas District Court Holds that Facebook Promotional Texts Were Not Sent Using ATDS

The Western District of Texas recently dismissed with prejudice a TCPA suit against Facebook brought by Colin Suttles, an individual who claimed he received thirty-two unsolicited texts from the company encouraging him to visit Facebook.com. Suttles v. Facebook, Inc., No. 1:18-CV-1004, at 2 (W.D. Tex. May 20, 2020).

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D.C. High Court Holds that Businesses Do Not Face Strict Liability for Junk Faxes Advertising Their Products, Agency Principles Apply

FDS Restaurant, Inc. v. All Plumbing, Inc., No. 16-CV-1009, 2020 WL 1465919 (D.C. Mar. 26, 2020)

In a recent TCPA junk-fax case, the District of Columbia Court of Appeals drew the intuitive conclusion that businesses do not incur TCPA liability whenever their products are advertised via fax. The proposition that strict vicarious liability does not apply to advertised businesses is a simple one, but—as the D.C. Court of Appeals noted—courts have diverged as to the proper standard to apply for assessing vicarious liability for faxes sent in violation of the TCPA. In FDS Restaurant, the D.C. Court of Appeals had to decide for itself which standard to apply in this context.

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