United States: Year In Review: 2023 TCPA Litigation

This post is part of a series of articles we are doing on 2023 data protection litigation trends. To stay up to date with our writings, please subscribe to the WilmerHale Privacy and Cybersecurity Blog.

The Telephone Communications Privacy Act (TCPA) has always been a hotbed for privacy litigation, especially given the prevalence of companies' use of marketing communications and the law's private right of action for certain violations. 2023 saw an increase in TCPA-related litigation compared to the previous year. This potentially indicates that plaintiffs are looking to test new theories of liability against companies despite the Supreme Court's 2021 decision in Facebook v. Duguid.

The TCPA makes it unlawful for a person to place calls to cellular and certain specialized telephone lines using an automated telephone dialing system ("ATDS") without prior consent (and the consent standard is heightened for marketing or promotional calls).¹ The Supreme Court's decision in Duguid severely limited claims under the TCPA by narrowing the definition of what constituted an ATDS.² In that case, the Court considered whether the TCPA encompasses any device that can "store" and "automatically dial" telephone numbers, even if the device "does not use a random or sequential number generator.³ The Supreme Court agreed with Facebook (now Meta), confirming that an ATDS refers to equipment that either stores telephone numbers randomly or sequentially, or produces telephone numbers randomly or sequentially.

In the years since, plaintiffs have been searching for other paths to establish liability for TCPA violations with varying levels of success. 2023 featured the Ninth Circuit as a leading voice in shaping the post-Duguid landscape, while some disagreements at the district court level teed up interesting questions on how far reaching the Supreme Court's definition of an ATDS is. There was particular focus on footnote 7 of Duguid, which plaintiffs hoped would reopen the pathways to liability. That footnote potentially expands the definition of an ATDS to include many predictive dialers, but plaintiffs have had mixed success thus far with these claims.

This blog post summarizes a few of the most notable TCPA cases from 2023. We will continue to keep you posted on notable TCPA developments through the WilmerHale Privacy and Cybersecurity Blog.

Trim v. Reward Zone USA, LLC, 76 F.4th 1157 (9th Cir. 2023)

The Ninth Circuit upheld the dismissal of a putative class action suit against Reward Zone USA, LLC. The lawsuit alleged that the company sent several unsolicited text messages, which the plaintiffs claimed was a "prerecorded voice message" as prohibited by the TCPA. The plaintiffs argued that the use of "voice" in the statute should be read broadly to mean "an instrument or medium of expression," because the statute is remedial and had been significantly compacted by Duguid.⁴ Plaintiffs had amended their complaint to include this new theory after the Supreme Court handed down Duguid. Plaintiffs also argued that their position was supported by the FCC. Defendants filed and were granted a 12(b)(6) Motion to Dismiss for failure to state a claim.⁵

The court affirmed the motion to dismiss in a unanimous opinion, holding that the statutory text is unambiguous and the statutory scheme clear. The court's opinion was based in "the ordinary meaning of voice" and "the statutory context of the TCPA."⁶ Text messages do not count as "artificial or prerecorded voices" because they are not audible sounds.⁷ Further, reading "voice" to include text messages would make other statutory provisions duplicative or nonsensical.⁸ The panel held that since Congressional intent was clear, it did not need to consider the other interpretative tools offered by the plaintiffs in support of their position.⁹

Pascal v. Concentra, 2023 WL 2929685, (9th. Cir. 2023) (cert. denied).

Reward Zone was not the only Ninth Circuit decision to narrow the potential reach of the TCPA. The Ninth Circuit issued a brief affirmance in Pascal v. Concentra dismissing the plaintiffs' claims that Concentra violated the TCPA when it sent out job recruitment text messages to people on a pre-produced list. The lawsuit was another putative class action filed before Facebook shifted the TCPA landscape, forcing plaintiffs to find new theories of liability.

Defendant Concentra used the online texting service Textedly to send text messages specifically targeted to physical therapists in California. Defendant uploaded a list of phone numbers, which were then assigned a sequential ID number in Textedly's database. Concentra used Textedly to simultaneously send marketing text messages to an entire class of ID numbers which included Pascal. Plaintiff argued that Concentra used an ATDS to send its marketing text messages because Textedly stored sequentially generated ID numbers, as prohibited by the TCPA.¹⁰

The court disagreed; a device that uses a "sequential number generator" to store numbers only qualifies as an ATDS if it sequentially generates telephone numbers. The court came to a similar conclusion in Borden v. eFinancial, LLC in 2022, holding that a device that generates sequential identifying numbers while dialing was not an ATDS.¹¹ Pascal fully forecloses any possibility that the TCPA outlaws sequentially or randomly generating anything other than a telephone number.

Perrong v. Bradford, 2023 WL 6119281 (E.D. Penn. 2023)

Some plaintiffs have tried to take advantage of an ambiguous footnote in Facebook. Footnote 7 of the opinion leaves open the possibility that an ATDS could "use a random number generator to determine the order in which to pick phone numbers from a preproduced list."¹²

The plaintiff in Perrong v. Bradford alleged that Bradford, a state legislator, used an ATDS and a prerecorded voice to place five phone calls to his phone number. Bradford provided a preproduced list to a third-party, Cleo, LLC, who placed the calls. Plaintiff alleged that this violated the TCPA because Cleo called the numbers sequentially. Defendants filled a 12(b)(6) Motion to Dismiss for failure to state a claim.

The court granted the motion to dismiss the claims based on the use of an ATDS. A system must generate the numbers dialed; it cannot simply pull the numbers from an imported list. The court did not cite to Footnote 7 in its memorandum. The court's opinion also noted that Bradford was not engaged in telemarketing for purposes of the FCPA.

Scherrer v. FPT Operating Company, 2023 WL 4660089 (D. Colo. 2023)

Federal courts were not unanimous in adopting the strict view of Footnote 7. The U.S. Federal Court for the District of Colorado did not agree with the Eastern District of Pennsylvania and broadly construed the Act. Appellants and Amici Curiae in Reward Zone and Pascal used this opinion to support their arguments.¹³

Class action plaintiffs in Scherrer v. FPT Operating Company survived a motion to dismiss after alleging a device that selected numbers from at imported list at random was an ATDS. The complaint alleged that FPT used an "automatic dialing system to automatically call lists of leads." According to plaintiffs, the system can generate and store random or sequential telephone numbers, then call in the stored order.¹⁴

The court found these allegations sufficient to "state a claim of relief that is plausible on its face."¹⁵ The order denying the motion to dismiss made extensive reference to Footnote 7.¹⁶ Despite admitting that the footnote was dicta, the court relied on the Supreme Court's reasoning "based on its recency and due to the dearth of controlling precedent on point."¹⁷

Footnotes

1. 47 U.S.C. § 227(b)(1)(A).

2. 592 U.S. 395 (2021).

3.  Id. at 398 (internal alterations omitted).

4. Trim, 76 F.4th at 1163.

5.  Id. at 1160.

6.  Id. at 1161.

7. Id.

8. Id. at 1162.

9. Id. at 1163.

10. Pascal v. Concentra, Inc., 2021 WL 5906055 at 1-3 (N.D. Cal. 2021).

11.  Borden v. eFinancial, LLC, 53 F.4th 1230 (9th Cir. 2022).

12 . Facebook, 592 U.S. at 407, n. 7

13. See Trim v. Reward Zone, 2023 WL 8601417 (U.S.) (brief in support of petitioner); Pascal v. Concentra, Inc., 2023 WL 5606641 (U.S.) (supplemental brief of petitioner).

14. Scherrer, 2023 WL 4660089 at 5.

15.  Id. at 2 (internal quotations omitted).

16. Id. at 2-4.

17. Id. at 3.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.