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By Alison Frankel, October 18, 2019
(Reuters) – Last June, when the 9th U.S. Circuit Court of Appeals revived (926 F.3d 1146) Noah Duguid’s Telephone Consumer Protection Act class action against Facebook, the appeals court made two important determinations. First, it concluded that a 2014 amendment carving out government debt collection calls from liability was unconstitutional under the First Amendment, though it agreed with the 4th Circuit in a previous case, AAPC v. FCC (923 F.3d 159) that the offending provision can be severed from the rest of the law. Second, the 9th Circuit confirmed its own 2018 precedent from Marks v. Crunch San Diego (904 F.3d 1014) that a defendant can be liable under the TCPA not just if it uses an automated system to dial randomly generated numbers but also if it has an automated system that dials stored numbers.
Now Facebook is asking the U.S. Supreme Court to look at both pieces of the 9th Circuit’s decision, arguing that the appeals court erred both in restricting the remedy for the TCPA’s constitutional violation and in expanding the definition of automatic dialing. Either justifies Supreme Court review, wrote Facebook’s Supreme Court counsel of record Paul Clement of Kirkland & Ellis. “Both together compel it,” he added.
TCPA plaintiffs lawyer Sergei Lemberg of Lemberg Law downplayed the prospect that the Supreme Court will take the case. “I’m not convinced that of all the problems in our society, the Supreme Court should be getting involved with a case where a Facebook’s broken, fully-automated computer system was spam texting our client and thousands of others,” he said in an email.
The TCPA, as you know, was originally enacted in 1991 to curtail spam telephone calls and faxes. It took aim at telemarketers that used automated dialing systems, typically to place calls or send faxes to randomly generated numbers, and allowed the recipients of such calls to sue for hefty statutory damages of as much as $1500. Importantly, the law included an exception: Defendants could not be liable for dialing phone numbers they’d previously obtained consent to call.
As TCPA class actions proliferated, one of defendants’ biggest bugaboos was that the law did not adequately reflect today’s digital reality, in which telephone numbers are frequently reassigned to different users. Companies asserted that they were being sued for calling numbers they’d received consent to dial when those numbers were recycled.
Facebook believes that’s what happened in the Duguid case. The social media company has a policy of alerting users about unauthorized attempts to access their accounts. If a Facebook user has consented to receive such alerts via a text message, Facebook will send a text to the user’s cell phone. Noah Duguid had no Facebook account and, obviously, never consented to receive text alerts from Facebook. He nevertheless received several. He brought a class action, alleging that Facebook violated the TCPA by improperly sending texts to his phone using an automated dialing system.
Facebook argued that the texts were sent by mistake. Duguid’s assertions, it said, took aim at practices the TCPA never contemplated: The social media company said it was not randomly calling phone numbers with unsolicited sales pitches but was calling numbers supplied by its users, with their consent, to alert them about potential security breaches. Yes, Facebook said, the calls were automated, in the sense that they were triggered when users’ accounts were improperly accessed. But extending TCPA liability to all instances in which stored numbers are automatically dialed, Facebook said, would expose every cell phone owner who has ever automatically redialed someone on their contact list to a TCPA claim.
The company also argued that the TCPA is an unconstitutional restriction on free speech – an argument that has been frequently tested and rejected since the law’s passage nearly 30 years ago. But the 9th Circuit, like the 4th Circuit in the AACP case, homed in on the 2014 amendment exempting private companies from TCPA liability when they are engaged in the collection of debt owed to the U.S. The 9th Circuit said that exemption showed the TCPA’s bar on automatically dialed calls was content-based and unconstitutional under the First Amendment. But the appeals court said the remedy was essentially to erase the statutory language shielding government debt collectors.
The 9th Circuit brushed aside Facebook’s doomsday warnings about the implications of its interpretation of an automated dialing system. “Our reading supports the TCPA’s animating purpose – protecting privacy by restricting unsolicited, automated telephone calls,” the appeals court said. “The messages Duguid received were automated, unsolicited and unwanted.” (Facebook was represented at the 9th Circuit by Latham & Watkins, which is counsel alongside Clement on the Supreme Court petition.)
In its new petition for Supreme Court review, Facebook argued that the 9th Circuit improperly usurped Congressional lawmaking power by severing the TCPA’s unconstitutional protection for government debt collectors. It also improperly denied any relief to Facebook for successfully asserting a constitutional challenge, the petition said.
Perhaps more persuasively, for the purposes of convincing the justices to grant review, Facebook argued that the 9th Circuit’s holding on TCPA liability for defendants that automatically dial stored numbers is contrary to the 3rd Circuit’s 2018 decision in Dominguez v. Yahoo (894 F.3d 116), in which that court said that a phone system must have the capacity to generate random numbers in order to be considered an “automated telephone dialing system” under the TCPA. The Federal Communications Commission, Facebook said, has even sought public comment on the 9th Circuit’s interpretation, whose implications, according to Facebook, are incompatible with precedent from the D.C. Circuit on TCPA liability for smart phone users.
“This deep and well-entrenched conflict at all levels of the federal courts is untenable,” Facebook said. “Billions of dollars are at stake in putative class actions seeking $1,500-per-call statutory penalties. The lower courts are hopelessly fractured, and certiorari is warranted.”
TCPA lawyer Lemberg doesn’t seem too worried, based on the email he sent in response to my query about Facebook’s petition. We’ll see whether he files an opposition brief with more legal analysis than he provided to me.
Original story: At Reuters
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