On April 1, 2021, the U.S. Supreme Court ruled in favor of Facebook in Facebook v. Duguid. Writing for the unanimous court, Justice Sonia Sotomayor explained that a device must have the capacity to store or produce a telephone number using a number generator. Justice Samuel Alito filed an opinion concurring in the judgment.
Telecommunications law experts Scott Delacourt and Daniel Lyons discuss the ruling and implications.
Scott D. Delacourt, Partner, Wiley
Prof. Daniel Lyons, Professor of Law, Boston College School of Law
Moderator: Danielle Thumann, Attorney Advisor, FCC Commissioner Brendan Carr
This call is open to the public and press. Dial 888-752-3232 to access the call.
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Nick Marr: Welcome, everyone, to The Federalist Society teleforum conference call, as this afternoon, April 12, 2021 we have a Courthouse Steps Decision teleforum on Facebook v. Duguid. I'm Nick Marr, Assistant Director of Practice Groups here at The Federalist Society, and I do apologize if I messed up that name.
As always, please note that expressions of opinion on our call today are those of our experts.
We have a great panel lined up. I'm going to introduce our panelists and our moderator. Our moderator's going to background the case. We'll have some opening remarks about the ruling and bit of moderated discussion. We'll be looking to you, the audience, as always, for questions towards the end of the program, so be thinking of those as we go along and have them in mind for when we get to that portion of the call.
Okay, with that, I'll introduce our panelists. We're joined first this afternoon by Mr. Scott Delacourt, a telecommunications law practitioner. He's a partner at Wiley Rein LLP. We're also joined by Professor Daniel Lyons, who's a Professor of Law at Boston College School of Law. Daniel was on last year to cover oral arguments in this case. And we're very pleased to have him back today to cover the ruling.
The discussion today will be moderated by Ms. Danielle Thumann. She's an Attorney Advisor at FCC Commissioner Brendan Carr's office. So with those introductions—and you can find longer ones on our website—Danielle, thanks very much for being with us. I'll hand the floor to you.
Danielle Thumann: Thank you, Nick. And thank you all so much for joining us today. As Nick mentioned, my name is Danielle Thumann, and I'm a Legal Advisor to Commissioner Brendan Carr at the FCC. Today we are going to be discussing the recent decision in Facebook v. Duguid.
On April 1, the Supreme Court decided the case in favor of Facebook in a 9-0 opinion. The case was focused on a definition contained in Section 227 of the Telephone Consumer Protection Act which prohibits the use of automated telephone dialing systems, also called auto-dialers, to call a number without the consent of the party called. These automated telephone dialing systems have been defined by the TCPA as equipment which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator. The FCC has interpreted the statute to cover text messages as well.
This issue has been previously litigated. And the issue before the Court here was really a core statutory construction question about the meaning of this term, automated telephone dialing system. The Court was asked to decide whether the phrase "using a random or sequential number generator" modifies both stored and produced, as Facebook argued, or merely produced, as Duguid asserted.
With that brief background, I'm going to turn it over first to Daniel to give a deeper history of how we got here.
Prof. Daniel Lyons: Yeah, so this is actually the third time in three years that the Supreme Court has dealt with the TCPA, although they've dealt with three different sections of it, which I think is a testament to just how poorly drafted the statute was when it was created in 1991, and how poorly it's aged in the 30 years since.
So the first case was PDR Network v. Carlton & Harris, which was dealing with a separate provision of the statute about unsolicited fax advertisements. The question in that case was whether a fax that was advertising something for free, in this case, the Physicians' Desk Reference, counted as a violation of the statute if it wasn't actually soliciting anything for sale but simply offering a free resource.
And the Supreme Court remanded that case based on a nuance of whether the -- under the Hobbs Act, the lower court was required to defer to an FCC interpretation of that provision, or whether it was allowed to decide de novo what the meaning of that particular provision was.
The next year, we saw another case, Barr v. AAPC, which was getting at a portion of the statute that exempted from the robocall ban calls that were made solely to collect a debt owed to or guaranteed by the United States. So robocalls were prohibited, but the government made an exception for efforts to collect money owed to itself.
The petitioners in that case were not government debt collectors. They were entities that wanted to use robocalls for "get out the vote" efforts and other political campaigns. And their argument was that, by exempting government debt collection from other types of calls, that the statute violated the First Amendment, and therefore the whole thing should be stricken down.
The Supreme Court rejected that sort of too cute by half ploy, but in a way that was remarkably fractured. Ultimately, the conclusion was 6-3 that favoring some speech over others on the basis of content violated the First Amendment, but 7-2 that the proper solution was to sever the government carve-out and leave the rest of the statute intact. And so I'd call that a Pyrrhic victory for the petitioners in that case in that they got the government carve-out eliminated, but not in a way that allowed them to make the robocalls that they sought.
So then finally we -- our third time around now is Facebook v. Duguid, which originates with the Ninth Circuit and deals with a class action involving Facebook's efforts to send text messages to alert users of potential security risks. Over the course of that program, they sent a text message to Noah Duguid, who did not have a Facebook account, and, despite his best efforts, was unable to get Facebook to stop sending him text messages highlighting that his account had been accessed. So he filed a class action alleging that Facebook was using an auto-dialer under the statute to send a message to his wireless telephone without his consent in violation of the TCPA.
Danielle Thumann: Great, thank you so much for all of that background. But could you maybe give a little bit of an overview of the primary arguments on both sides made during oral arguments?
Scott D. Delacourt: Sure. And for a full take on the oral argument, I would refer our listeners to a December teleforum, now reduced to a podcast, featuring Professor Lyons and my colleague, Megan Brown. But just to quickly boil it down, the main arguments were about statutory construction and competing canons of statutory construction.
So Facebook cited something called the series-qualifier canon in support of its argument that the definition of automatic telephone dialing systems should be quite narrow. The series-qualifier canon specifies that where a modifier comes after a list, it applies to every item in the list. And so in this case, it would mean that not only -- to be an auto-dialer, equipment must not only produce numbers using a random or sequential number generator, but also store numbers using a random or sequential number generator.
They also argue that this narrow construction of the definition of ATDS that you arrive at using the series-qualifier canon is the most consistent with addressing the narrow problem that Congress targeted in the TCPA, which was, as revealed in the legislative history, trying to prevent instances in which auto-dial equipment had been used to call hospitals, had been used to tie up lines at first responders, or had been used to call every number sequentially on an office PBX, something like that.
Duguid, in response, cited two competing of statutory construction. First is the rule of last antecedent, which is essentially the opposite of the series-qualifier canon. It says that a modifier at the end of a list applies only to the last item in that list. So this would be consistent with what the Ninth Circuit had held that equipment is an auto-dialer if it has the ability to store telephone numbers to be dialed, whether or not it uses a random or sequential number generator, which would be quite a broad definition of the equipment and applied to most modern cell phones.
As a fallback, Duguid cited that the distributive canon, which provides, and I'm going to quote here, "that a series of antecedents and consequence should be distributed to one another based on how they most naturally relate in context." The Court disposed of this latter canon relatively quickly because it usually applies to a longer list where there are more than two antecedents. And in the case of the ATDS definition, there are only the terms store and produce as the two antecedents. Duguid also ask the Court to construe the TCPA broadly in light of the act's privacy protection goals, and to keep the act up to date with modern technology.
Danielle Thumann: So that brings us to the opinion of the Court. Would one of you like to give an overview of the Court's holding?
Scott D. Delacourt: Sure, I can do that. I think it follows naturally from that setup. The Court essentially agreed with Facebook that the series-qualifier canon applied on that, and ATDS must both store numbers using a random or sequential number generator and produce numbers using a random or sequential number generator, and that this is the best fit with the objectives of the TCPA as set out by Congress.
One interesting thing about this holding by the majority is that the opinion relies so heavily on canons of statutory construction, and that Justice Alito, in his concurrence, really agreed, of course, with the finding, the holding, but had a problem with that.
He felt that the Court had kind of overdone the importance of the series-qualifier canon, and that what was more important to him in construing the statute is that this construction arrived at through applications of canon was a narrow and, to his mind, a more logical construction of the text that applied to a smaller universe of equipment that seemed more addressed to the problem Congress was trying to get at and which didn't reach modern cell phones. So he was saying, "Let's not get out there, Court, suggesting that the series-qualifier canon is going to apply in every case." He gave lots of instances in which he wouldn't apply the canon and said what matters here is that it makes the statute make the most sense.
It was also kind of interesting that, overall, this was a very textualist opinion, but it was authored by Justice Sotomayor, quoting the late Justice Scalia's text on statutory construction, and that Justice Alito was the one quibbling with the textualist approach in the concurrence.
Prof. Daniel Lyons: Yeah. And just to add to the layers of intricacy, the text that Scott was referring to was a book that Justice Scalia had written with Bryan Garner, who's sort of the dean of statutory construction, and was representing Duguid in this case, in his first Supreme Court oral argument, if I remember correctly.
So there's all sorts of interesting connections. I am not surprised that this case -- that it comes out as complicated as it is. I'm also not surprised that Facebook ended up winning. This is kind of a messy statute, that analyzing the language of to store or produce telephone numbers to be called using a random or sequential number generator. Not at all obvious what Congress was getting at, even if you put yourself into that particular time frame, even just using 1991 technology to try to define what is it that Congress meant.
Scott, I don't know your thoughts on this, but did this take you by surprise, or is this sort of where you expected the case to come out?
Scott D. Delacourt: No, it didn't take me by surprise. And I think what's interesting is that the issue finally came before a body that was -- felt itself constrained, almost completely, by the text. And so the Court, in an appropriate role here, was not worried as the FCC has been about what's the implication of my construction on the consumers and on consumer complaints about robocalls, and wasn't as concerned with, does the statute continue to apply to modern technology?
They appropriately, I think, focused on what do the words of the statute say? And if that's your focus, if that's where you dial in, then this decision is not a surprise at all because I think their reading is one that is very plain. It's been suggested all along by litigants in various fora, and it was certainly a construction that was advanced by some of the commissioners at the FCC when this came before that body.
Prof. Daniel Lyons: Yeah. And the FCC angle, I think, is an interesting one, something I didn't touch on in my overview, but I think looms as sort of a shadow over this case because this is one of those statutes that is charged to the FCC to enforce. And the FCC, over several years, has taken passes to figure out how the statute should apply.
One of the interesting questions that I thought might have come up, but ultimately didn't in this, was, for example, does a prohibition on calls apply to text messages, which the parties seemed to concede it did. Justice Thomas raised that at oral argument, but it didn't seem to go anywhere. And the Court dispenses that with a footnote by assuming without deciding.
But the FCC has also taken some passes at what counts as an auto-dialer and what doesn’t. One thing they said in the 2015 order, which was their latest discussion of the issue, was that a device counts as an auto-dialer if it has the capacity to store or produce telephone numbers using a random or sequential number generator, even if they're not actually using that number generator in the call at issue. So just the ability to do so is enough to trigger liability.
But strangely, although the number of commentators had asked for it, the FCC ducked the question that was at issue in this case, which was, what counts as an auto-dialer? Do you have to store numbers using a random or sequential number generator, or simply store numbers to be called? If random or sequential number generator only modifies produce, then any device that stores a number to be called later could conceivably trigger TCPA liability, which is what the Ninth Circuit had held and created -- or I should say, expanded a circuit split that had developed as these cases were proliferating throughout the court system.
Scott D. Delacourt: Yeah. Professor Lyons, I think you raised a couple of interesting issues there I'd like to go back to. One is this question of whether a text is a call. And the Court did dispense with that merely in footnote 2 of the decision. But that's an issue that's received a lot of attention from TCPA practitioners.
The Court notes that it's not addressing whether the -- what the Court says in the decision is that it's not addressing whether the ATDS definition, and the associated consent requirements, apply to text messages, and that the reason for the Court's silence is that no party raised the issue. But it's implicit in the footnote that the Court is questioning an FCC decision holding that an SMS text is a call under the TCPA. And that decision was based on the fact that SMS, short text messages, use telephone numbers for the delivery of messages.
But of course, today, many of what the public understands to be text message platforms may not do that at all. On these platforms, a text is just a data service, so it doesn't ever touch the telephone network. So the question of whether a text is a call is not really academic. Really, it's a core question that goes to whether the TCPA is a good fit for text messages, particularly the penalties that apply under the TCPA look wrong when applied to text messages, which, of course, are sent in much greater volumes than automated calls.
So if the FCC's decision that a text is a call under the TCPA were eventually reversed, it would create an environment in which either the Congress or the FCC could come back and perhaps put in place a more sensible regime with respect to texts.
And I mentioned that you had raised two issues. The second one is, you raised the capacity issue in the fact that the definition of auto-dialer doesn't limit itself to saying equipment does these things with a random or sequential number generator. It says it has the capacity to do these things. And so, as you mentioned, the FCC had adopted an order in 2015 that looked at whether equipment could be modified without too much effort to give it the ability to essentially generate and send calls and texts without human intervention.
That construction was, of course, overturned by the D.C. Circuit. But in not addressing the capacity here, there has been some scuttlebutt post-Facebook decision that may be an avenue for going back to the FCC or some other body of court and getting the definition of ATDS expanded again, where the Court has just narrowed it, I think probably not a productive avenue for those who would like to pursue that.
To me, if the Court -- where the Court has said that to be an ATDS, you have to be able to store numbers using a random or sequential number generator, and to produce them using that type of technology, it's almost at odds with the logic of the Supreme Court's decision to then say if it has the capacity to do those things, even if those capabilities are not present, that it could still be an auto-dialer. So I think the Court -- I guess it's a long way of saying I think the Court has pretty much put a stake in the capacity argument, as well.
Prof. Daniel Lyons: Yeah, I think that's probably right. And it certainly came up at argument. And my sense—I don't know if you agree, Scott—but my sense was that one thing that seems to be looming in the background of the Court's decision is the argument that Facebook made about the breadth of the TCPA if you accepted Duguid's argument.
If any phone, or if any device that has the capacity to store a number to be dialed, then triggers liability if it calls a wireless service without consent, then basically, any modern smart phone is potentially a TCPA violation. And anytime you use that to call or text somebody who has a wireless phone, and you didn't have consent to do so, you're potentially facing $500 to $1500 in fines for violations.
I thought Facebook did a really good job at oral argument of laying out how broad Duguid's reading of the statute would have swept when you layer it onto modern technological systems. And the Court doesn't make a big deal out of that, but I think it definitely was moving in the minds of the majority as they were writing this up.
Scott D. Delacourt: Yeah, I agree with that. That's where the opinion quipped that reaching that broadly uses a chainsaw as opposed to the scalpel that Congress intended. And I thought that was a very frank treatment of that issue, of the idea of an ATDS that's very broad compared to the narrow construction that the Court adopted.
I thought that was interesting because the FCC, of course, had previously adopted a definition of ATDS that went beyond even what the Ninth Circuit had accepted. So that was really a chainsaw approach. So I was, I guess, not surprised that the Court -- with where the Court came down, but maybe surprised with some of that language about how obvious they thought it was.
Prof. Daniel Lyons: Well, I think what you have are two very different views of how broad or narrow the TCPA was intended to apply and how relevant it is to modern environment. The FCC has made a nice little cottage industry of taking outdated 1990's statutes and figuring out how to stretch them as much as possible to apply to technological innovations that have occurred since Congress last visited this area. They've gotten very good at saying, "This is the language that I have to use. How can I use this to fight, for example, robocalls?", who's just prompting one out of every three consumer complaints the FCC gets each year, or something like that.
And my sense in reading Justice Sotomayor's opinion is that the Court disagrees that that's what the TCPA should be used for. At least this provision of the TCPA was a very narrow provision written to address one particular problem, the use of auto-dialers specifically for calling emergency rooms, or emergency lines and hospital rooms, pagers and wireless numbers, at a time when very few of us had wireless telephony. And then it doesn't make a lot of sense to read it broadly beyond that to solve a problem bigger than the one that Congress thought it was trying to solve back in '91.
Scott D. Delacourt: I agree with that. And I thought it was interesting to juxtapose how the Court technology is playing into this argument versus how the FCC sees technology as playing in. The courts and FCC, of course, have different roles. The Court's focused on the meaning of statutes and the FCC, while being bound by statute as an expert agency, having a greater interest in technology.
And in the TCPA space, and even on the narrow definition of ATDS, the FCC has wrestled with hard technology question about dialing platforms that we use for both manual and automated dialing, how much human intervention is involved, the difference between an auto-dialer and a peer-to-peer dialing solution. The Supreme Court pretty much gave all of that the back of the hand. With respect to human intervention, in footnote 6, the Court said all devices require some human intervention. And we decline to interpret the TCPA as requiring such a difficult line drawing exercise about how much automation is too much.
So that was a showstopper for me. It's like, well, okay. A lot of us have been wasting a lot of time because there's been much argument before both the FCC and the courts about how much is too much human intervention. A lot of our counseling work focuses on how much is too much intervention before you cross the line into being an auto-dialer?
The only real interest the Court showed in technology was in a 1988 U.S. patent for a piece of equipment that stores numbers using a random number generator. And the Court was interested in this technology only for statutory construction purposes.
The fact that the equipment existed confirmed the Court's construction of the ATDS definition as equipment that can both produce telephone numbers using a random or sequential number generator and store telephone numbers using a random or sequential number generator because the patent showed that equipment that used the random number generation to store numbers actually existed. If you read the FCC opinions about TCPA, there is every nuance of different technologies being used for different purposes and how the act applies. What the Supreme Court is interested in is this 1988 patent.
Prof. Daniel Lyons: And by the way, super effective use of an amicus brief because I think Duguid's strongest arguments on statutory interpretation was it makes sense to produce a number using a random or sequential number generator. It doesn’t make sense to store a number using a number a random or sequential number generator. Why would you do that?
And so [inaudible 27:22] had an amicus brief saying, in fact, this is what people were doing it for at the time Congress was writing. You created a plausible reason why Congress might -- why the statute might be read that way. And so I think that amicus brief did a really good job of cutting down Duguid's strongest argument.
Scott D. Delacourt: Somebody really did their research coming up with that patent. But the lack of interest in technology by the Court throughout the decision -- just by comparing it to what the FCC does. But it was also a statement about the Court's role, and they got fairly explicit about it. So the FCC has always approached the TCPA with an overriding concern for keeping the act up to date with modern technology. And the Court expressly declined to do that.
Duguid argued that a random or sequential number generator is senescent or outdated technology and that the Court should construe that TCPA is an agile tool addressed to modern technology. And the Court flatly refused. They said Duguid's quarrel is with Congress, and that senescent as a number generator, and perhaps the TCPA, itself, may be, there is no justification for eschewing the best reading of Section 227.
So this was the Court sticking to its role of saying what the law is. And while the Court certainly wasn't challenging the FCC directly, it raises serious administrative law questions about why the FCC has been so concerned about making sure its regulations apply to modern technology and so unconcerned with the limits imposed by the statute.
Nick Marr: Hey Scott, this is Nick. You're breaking up a little bit.
Scott D. Delacourt: Sorry. Is that better?
Nick Marr: Yes, much. Yes.
Danielle Thumann: That's great. If we could just pause there quickly to see if we have any questions lined up from callers? Nick, are there any questions in the queue?
Nick Marr: Thanks, yeah. Let's open the floor. We'll give callers a couple minutes to line up here. None now, Danielle, so I'll give it back to you.
Danielle Thumann: Okay, great. Picking up where you left off, Scott, a few minutes ago, you had mentioned the Court declining to really entertain Duguid's argument about the impact of this decision on today's technology.
In the last two weeks since the decision came out, we've heard some calls for a rewrite of the TCPA or amendments to respond to this holding, including from Acting Chairwoman Jessica Rosenworcel. Do you think that we'll see a revisiting of the TCPA by Congress under this administration?
Scott D. Delacourt: I think there's a good possibility that we will. A lot of it will depend -- the urgency of revisiting the TCPA will depend on the response that there is in the marketplace to this decision.
Duguid, of course, took the position that if the Court narrowed the definition of ATDS, which, of course, would limit the situations in which prior consent was required to place calls and to send texts, that one could expect a large expansion in calling and texting that is either illegal or not desired by consumers. If that were to happen, then I think we would see some action on the TCPA relatively quickly. But I have some real questions about whether that's likely. I think it's unlikely.
I think this is properly viewed as a tort reform decision that what it did was bring clarity on a key definitional issue that was long overdue, and that that clarity will go a long way towards stemming some of the lottery-type class action lawsuits that have dominated the TCPA landscape. I don't think it's going to be a fire-away type of situation as a result of the Supreme Court's decision.
We already know that most of the illegal robocalls come from parties that are operating outside the law. So the Supreme Court, or another court, or the FCC changing the law won't impact their behavior. These are the callers that set up offshore or that use shell companies and just blast away. And the FCC already knew that these bad actors operate outside the law, and that's why the TRACE Act was adopted. And the FCC's implementation with carriers focuses on identifying and blocking those types of callers.
With respect to legitimate companies, they have every incentive to focus their efforts on communications that their customers want. Blasting away would be a huge turnoff to their customers and against self-interest. No legitimate business would really want to damage their brand by being associated with indiscriminate calling and texting.
Moreover, there are controls that are in place that aren't tied to the consent requirements of the ATDS restriction. So there's the Do Not Call List. With respect to texting, many codes of conduct that are more stringent on consent than what the TCPA requires. There are second- and third-party apps that give users the ability to choose the unwanted calls and texts that they want to block. So I don't think it's at all clear that the Supreme Court's decision will increase illegal or unwanted calls, but it will cut down on frivolous lawsuits.
Prof. Daniel Lyons: Yeah, I agree with that completely. I think it's helpful to project forward what do we think is going to be the result of this. And it's helpful to note that the auto-dialer provision is actually a very narrow portion of the TCPA. It was not prohibiting all auto-dialer calls. It was prohibiting auto-dialer calls to very specific types of called parties.
The ruling doesn't touch at all the separate provision of the TCPA, which prohibits calling people using a prerecorded or artificial voice, which is the bulk of what we think of as robocalls today. A lot of the heat and light coming out of the opinion was, "Oh, we're going to see a big increase in robocalls." But most of the robocalls that we all suffer from, and we all do, are already illegal. The problem is not that they're not prohibited. The problem is that we can't enforce the law against the robocallers for reasons Scott identified, because they're anonymous, or overseas, and hard to track down.
What the real effect of this is going to be, I agree, is cutting down on TCPA filing -- TCPA class-actions that have very little to do with robocalling and a lot to do with creative, let's say, interpretations of the statute. So I found some stats earlier that TCPA filing -- TCPA has been a huge growth area for class-action litigation the last decade or so, growing from 351 cases in 2010 to over 3,000 in 2019. And the high point was 4,600 in 2016.
And a lot of these are cases like the one that Commissioner Pai highlighted in an FCC order where the Lakers had offered fans a chance to text the team a message and get a chance to put your message up on the Jumbotron at a game. And when the Lakers acknowledged the receipt of each message with a text saying, "By the way, not all messages will be put on the Jumbotron," they were sued for violating the TCPA because it was an unsolicited text.
The Philadelphia Inquirer ran a feature a couple years ago about a 21-year-old who had made a career out of manufacturing TCPA suits, things like making an order, freezing his credit card payments so the company would have to call him back, and then suing them for an unsolicited auto-dialer call. The expanded definition of auto-dialer is what made that possible. And by tidying that up, I think the Court has cut down a lot on those types of suits without really, I think, affecting the robocall landscape.
I think it does raise the broader question of whether the private right of action that's at the core of the TCPA is still a useful tool for combating robocalls. My answer is no, probably not. I think technological innovation is probably going to be our more effective toolkit moving forward.
Scott D. Delacourt: Yeah, I agree with that. And to add to the Lakers example, even this case, itself, the Facebook v. Duguid case, bears some of those hallmarks of being sort of a cheeky case, looking for lottery damages where the harms aren't there.
So the texts that were sued about in this case were security alerts that there'd been unauthorized access to one's account. Those are things that people generally desire to get, and in fact, in some instances, are required because it's a desirable -- there are desirable public policy reasons to have that as a cybersecurity measure, and to prevent hacking, etc.
So but it's no accident that in an instance where Facebook was unable to turn off those security alerts to an individual who didn't have a Facebook account that a suit was brought because Facebook is a deep-pocketed company. And that's where the TCPA litigation tends to be found with well-financed, well-capitalized companies that make errors or have had issues around the margins in where their overall [inaudible 37:46] reflects attempting to comply.
So I think the Court's decision here is a helpful one to cut down on that sort of litigation and to give Congress an opportunity, if it wants to legislate in this area, to construct a regime that is more meaningful and that can achieve the same results without the waste of these lottery verdicts.
Prof. Daniel Lyons: It also, I think, highlights some of the difficulties that either Congress or the FCC would have in trying to craft the right piece of legislation in this area. So assuming that you want to write a statute or a regulation that's deterring unsolicited text messages, you have to really think about what the unintended consequence would be on something like two-factor authentication.
Facebook sending a notice to your phone when your account has been accessed is what -- that two-factor authentication is the gold standard for cybersecurity protection. But there're going to be instances in which those messages go to the wrong number, either there's a user input error where when the person signs up, he or she mistypes the number, or what Facebook estimated or predicted probably happened in this case was that Duguid received a cell phone number that had been recycled, that used to belong to somebody who had a Facebook account.
You can't predict in advance all of those scenarios. And deciding that -- if you want to eliminate those types of unwanted context without throwing the baby out with the bathwater and eliminating two-factor authentication, it becomes, I think, really hard to thread that needle.
Scott D. Delacourt: Yeah, I agree with that. One model that has had some success is the Do Not Call provisions because those provisions explicitly in the statute have a safe harbor. So if a company is trying to comply with the Do Not Call requirements, and maintains a Do Not Call list, a company's specific Do Not Call list has in place measures to dip the National Do Not Call database on a per call basis to ensure that they're not hitting those numbers, and trains their employees, reports on their conduct, and nevertheless, despite taking all of those measures, has some breakdown. And as a result of that breakdown, they may have called numbers on the Do Not Call List. There's a safe harbor to address that.
So it's not a strict liability approach. The ATDS provisions have essentially been strict liability. And that's something that should be revisited if legislation is forthcoming.
Prof. Daniel Lyons: I don't know. The solution might be to route complaints through the Federal Communications Commission rather than to allow private right of action to the court system, to cut down on the class action lottery ticket dynamic of current TCPA practices and allow an expert agency a little bit more judgment about, is this the kind of situation in which we think liability should lie?
Nick Marr: So Danielle, no questions in the queue. Perhaps you have some more.
Danielle Thumann: Okay, thank you Nick.
So you talked about the strict liability, removing strict liability and establishing a process where the FCC could respond to or address complaints. Is that something that the FCC would be able to do, or is that something that would require Congress to act and to modify the statute?
Prof. Daniel Lyons: Yeah. I was thinking in terms of, as you draft the next statutory provision, can you create a liability rule that gives the agency some discretion in deciding whether this is the type of violation that Congress intended to trigger liability, something like the unjust and unreasonable standard that the FCC would apply in charges in discrimination cases under the common carrier standard. It didn't mean that all discrimination in charges or service triggered liability, only that which was unreasonable. And the FCC had a lot of discretion deciding whether this form of discrimination was a net positive or a net negative for the operation of the telephone system.
Scott D. Delacourt: Right. I think that sort of approach makes a lot of sense. But of course, Danielle, to go to your question, the FCC is not in a position to eliminate the private right of action that's in this statute. That would take an act of Congress. But if Congress were to take that action, it wouldn't be unusual or out of step with the way the FCC usually enforces the Telecom Act to have a standard like the type that Professor Lyons described.
Prof. Daniel Lyons: You brought up a little bit earlier the other technical measures that the FCC's taken to try to combat robocalls. Let me talk a little bit about that, sort of the stir-shaken framework and other aspects that Congress has authorized the FCC as moving forward on anyway.
Scott D. Delacourt: Yeah. There is a bit of a partisan split in the way that the FCC has approached the TCPA. And the Wheeler FCC was very focused on expanding the regulation to reach more unsolicited calls, to apply consent requirements more broadly. And that was the FCC administration that adopted the 2015 omnibus order with the very expansive definition of ATDS.
Under the last FCC, under Chairman Pai, the focus was different, not as focused on expanding the consent requirements, but rather on reaching -- using tools at the FCC's availability that could bring down the volume of calls that were essentially wholly illegal and taking place regardless of any regulations that were in place. And that effort was oriented around giving the carriers greater flexibility to block calls that bore the hallmarks of being illegal robocalls, normally under a duty to complete calls, regardless.
That's their common carrier duty, if a call is placed, to put it through. And the Pai FCC gave the carriers some flexibility to not complete calls, to block calls without the fear of having enforcement action brought, where those calls had the hallmarks of being illegal robocalls, whether it's the volume, whether where they originated, etc.
Subsequent to that -- well before that, the FCC also worked with the carriers on developing the shaken and stir protocol, which is a method -- a standard for identifying the origins of calls where a call traverses multiple carrier networks. One of the difficulties of preventing robocalls had been the fact that a call would arrive on a carrier's network, and it would have no ability to determine where it originated. And that would prevent its ability from identifying a particular caller as being a repeat illegal robocaller.
So the carriers developed standards to trace back the origin of the call and did that as a voluntary measure. And then Congress built on that with the TRACE Act which made it mandatory, and the FCC has gone forward with implementing that. By all accounts, it has brought down the volume of illegal robocalls. And it's been accompanied with some aggressive enforcement against illegal robocalls, and the commission having adopted some of its highest finds ever in this space, including one very recently.
Prof. Daniel Lyons: Yeah. And I think in regard to that 2019 order, it's important to recognize the ultimate decision is still in the hands of the consumer, whether to allow the carrier to use this call blocking technology.
The carriers developed this technology to identify suspected robocalls, and they can block them for you or not. What the FCC clarified was the classic opt out/opt in question. Prior to 2019, the carriers were concerned about not giving consumers that technology unless the consumer firmly opted in. And the FCC confirmed that, in fact, the carriers can set it as the default that will block suspected robocalls unless you opt out and want every call to come through to you.
And yeah, I think that during the pandemic, this aggressive targeting of gateway providers, getting at the middlemen who are connecting overseas robocalls, winds up being actually really helpful in trying to reduce the volume of calls that are coming in, at least from overseas through gateway providers and trying to stop them as they get onto the North American telephone network.
Nick Marr: We do have one question in the queue, and we'll go to it now. We've got about seven minutes left here. Okay, caller with the area code 443, you have the floor.
Caller 1: Yes. Good afternoon. Thanks very much for the interesting discussion. My question doesn't really relate to the telecommunications particularities -- peculiarities of the decision, but more to any potential implications the decision might have with respect to the canons of construction questions, and then maybe the application of those to agencies.
It seems for a very long time that you could find a countervailing canon that would defeat the canon that your opponent advanced. And it seemed like sort of a fruitless exercise to try to argue canons of construction. I don't know any of the panelists have any opinion about whether or not this may revitalize or rationalize some of that area of inquiry, and then the extent to which it might require agencies to be more diligent in parsing the language of statutes or regulations they promulgate.
Prof. Daniel Lyons: Yeah, my sense is -- I don't think it's a straight-line trajectory, but my sense is that as part of the growing skepticism of Chevron, you're seeing appellate courts and even some Supreme Court cases taking a more aggressive approach at step one, trying to work hard to figure out what a statute means before concluding it's ambiguous, and we'll go on to step two.
I think this case actually provides some ammunition for that approach, as did the Encino Cars case a few years ago, which pops up a couple of times in Sotomayor's opinion. The Chevron case itself makes clear that you only go to step two if you decide, after using the normal tools of statutory interpretation, that the statute remains ambiguous and that the canons of statutory construction are one of those tools that you use at step one.
So the more you strengthen the canon, the more likely it is you're going to see courts try to rely upon them. And as an advocate, I would certainly use them more than I would have 10 years ago when I was actually in practice to try to argue that a statute is clear at step one.
Scott D. Delacourt: I would just add to that that the decision itself, of course, is very much focused on the canons of statutory construction and would seem to breathe some life into the type of effort that Professor Lyons described.
But keep in mind that Justice Alito threw cold water on it to some degree in his concurrence. I think the spirit of his concurrence is that while construction are useful, he sees them as most useful in combination with other tools. To him, it was most meaningful that when you applied the particular that the Court favored, it also resulted in the construction that, to him, seemed to accord best with the purpose of the statute as identified by the Congress.
Danielle Thumann: Great, thank you both. Nick, do we have any other questions in the queue?
Nick Marr: We don't have any more questions in the queue. We've got about three minutes left here, so perhaps some closing remarks.
Danielle Thumann: Yeah, that would be great. Go ahead.
Scott D. Delacourt: I was just going to say, my bottom line for this case is I think it was an important -- while it's styled as TCPA decision, I think it was an important tort reform decision and brought some long-needed clarity to a statute where such clarity has long been needed.
Prof. Daniel Lyons: I one hundred percent agree with that. And although I don't think the Court's decision will have much effect on the volume of robocalls coming through, the fact that it's shining the spotlight on the robocall problem, again, maybe getting some heat and light on Congress to think of alternatives to a private right of action as a solution, is probably not a bad thing.
Danielle Thumann: Well, thank you both so much for this excellent discussion and to all of our listeners for joining us today. Nick, I'll turn it back over to you to close us out.
Nick Marr: Thanks so much, Danielle. I just want to offer a quick thanks on behalf of The Federalist Society, first to our panelists, and to our moderator, Danielle. Thanks very much for your time and the benefit of your expertise today in covering this important case, and to our audience for calling in and your good questions.
As always, we welcome your feedback on these programs and others by email at firstname.lastname@example.org. And be checking our website and your emails for announcements about upcoming teleforum calls, Zoom events, and all kinds of other things. So with that, thank you very much for being with us here today. We are adjourned.
Dean Reuter: Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.