In a unanimous three-judge panel vote, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded the District Court’s dismissal of the plaintiff’s Telephone Consumer Protection Act (TCPA) claims against Facebook, finding that plaintiff sufficiently alleged that defendant used an automatic telephone dialing system (ATDS) to send unwanted text messages. The Ninth Circuit also rejected Facebook’s challenge that the TCPA as a whole is facially unconstitutional, though it severed the debt-collection exception as violating the First Amendment. See Duguid v. Facebook, Inc., No. 17-15320, 2019 U.S. App. LEXIS 17675 (2019).
The facts are straightforward. The plaintiff Noah Duguid sued Facebook alleging a violation of the TCPA for using an ATDS to send repeated text messages for more than nine months alerting him that an unrecognized device accessed his account. This was particularly peculiar because Duguid was not, and has never been, a Facebook user. After several unsuccessful attempts to stop the alerts, Duguid filed a class-action suit on behalf of two classes: people who were texted by Facebook without providing their cellphone number to the company; and people who received at least one message after notifying Facebook that they did not wish to receive messages. The District court dismissed the complaint stating that Duguid had insufficiently plead that Facebook sent messages through an ATDS.
Relying on the Ninth Circuit’s decision in Marks v. Crunch San Diego, LLC and the D.C. Circuit’s decision in ACA Int’l v. Federal Communic’s Comm’n, the panel found Facebook’s equipment falls within the Ninth Circuit’s definition of ATDS: “equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers automatically.” (emphasis added). Although Facebook feared that the ATDS definition would implicate smartphones as equipment which stores numbers “to be called,” the Ninth Circuit indicated that excluding equipment like Facebook’s system, which stores numbers “to be called” automatically, would not thereby exclude smartphones.
The panel evaluated the TCPA’s constitutionality on three prongs: 1) whether the Act is content-based and is therefore subject to strict scrutiny; 2) whether the amendment containing the exception provision fails the applicable scrutiny analysis; and, 3) whether that exception is severable from the Act.
The panel relied on the Supreme Court decision in Reed v. Town of Gilbert, Arizona to conclude that the exception is content-based, meaning that provision’s applicability depends on whether the communication regards debt-collection. According to the court, the added provision transforms the TCPA into a mechanism for favoring this type of speech. In the past few years, the Fourth and Eighth Circuits made similarly reasoned decisions regarding state-specific TCPA’s. However, the Seventh Circuit upheld similar exemptions in Indiana’s TCPA analogue as content-neutral. This circuit split is only intensified by the Ninth Circuit’s ruling.
Due to the content-based nature of the provision, it must be narrowly tailored to serve a compelling government interest to survive strict scrutiny analysis. The court rejected Facebook’s assertion that security messages are commercial speech and therefore subject to intermediate scrutiny. The government asserted its compelling government interest was “protection of personal and residential privacy.” But the Ninth Circuit deemed this a “head-scratcher, because robocalls to collect government debt are just as invasive of privacy rights as robocalls placed for other purposes.”
The court differentiated emergency and consented-to robocalls from those made for debt-collection purposes to accentuate what it deemed a “tailoring defect.” Furthermore, the court deemed the exception overinclusive because Congress could have based the exception on the relationship of the party called to the government versus on the message’s content. The panel also briefly brushed off the government’s argument that its interest in the exception is to protect the public fisc by stating that Congress could achieve the same goal through less restrictive means and content-neutral phrasing.
Congress specifically provided for severability in the TCPA, and the Ninth Circuit chose to excise the debt-collection provision stating that “[t]he newly enacted exception did not suddenly and silently become so integral to the TCPA that the statute could not function without it.”
A still pending FCC public notice proceeding seeks clarification on the definition of ATDS following the D.C. Circuit decision in ACA Int’l in which the court stripped the ATDS definition down from one with FCC insight to simply the statutorily defined version of the TCPA. In Marks, the Ninth Circuit interpreted that definition to include any system which could store phone number and dial those numbers automatically. The outcome of the public notice proceeding on the definition of ATDS could influence any future litigation if Facebook chooses to appeal the case to the U.S. Supreme Court.
Gordon Rees Scully Mansukhani's Consumer Protection practice group is uniquely poised to assist your company with any questions about TCPA legislation. Please contact the author with any questions. Law Clerk Shelby Dattilo contributed to this advisory.