Courthouse Steps Oral Argument Teleforum: Facebook Inc. v. Duguid

Listen & Download

The case of Facebook Inc. v. Duguid will have oral arguments before the Supreme Court on December 8, 2020. At issue in the case is the Telephone Consumer Protection Act's definition of "automatic telephone dialing system," and whether this phrase includes any device that can store and dial phone numbers, even if it “uses a random or sequential number generator.” Megan Brown and Prof. Daniel Lyons join us to discuss the case and its implications.

Featuring:

Megan L. Brown, Partner, Wiley Rein

Prof. Daniel Lyons, Professor of Law, Boston College School of Law

 

Teleforum calls are open to all dues paying members of the Federalist Society. To become a member, sign up on our website. As a member, you should receive email announcements of upcoming Teleforum calls which contain the conference call phone number. If you are not receiving those email announcements, please contact us at 202-822-8138.

Event Transcript

[Music]

 

Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's Practice Groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of Practice Group Teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Nick Marr:  Welcome, everyone, to The Federalist Society's Teleforum Conference call, as this afternoon, December 8, 2020, we have a "Courthouse Steps Oral Argument Teleforum on Facebook Inc. v. Duguid." I'm Nick Marr, Assistant Director of Practice Groups at The Federalist Society.

 

A quick note before we get started, an email announcement went out earlier today about Capital Conversations Teleforum with Commissioner Hester Peirce. It had the wrong date on it. So today, at 3:00, it's actually Thursday at 3:00. So tune in, same number as this one, tune in on Thursday.

 

So I'll introduce our speakers, and then they'll go through the program. As always, please note that expressions of opinion on the call today are those of our experts.  

 

We're very fortunate to have with us to cover this case Megan Brown, she's a Partner at Wiley Rein, and Professor Daniel Lyons. He's Professor of Law at Boston College School of Law. So after our speakers cover the case, they're going to have a bit of a discussion. Then we'll have some time at the end for audience questions.

 

So without much further ado, thanks for being with us, Megan. I'll hand the floor off to you.

 

Megan L. Brown:  Thanks so much, Nick. It's a pleasure to be here. As mentioned, I'm a Partner at Wiley Rein where we do a fair bit of work under the Telephone Consumer Protection Act and some of the other federal statutes and regulations that govern how communications are made using new technology.

 

      So the Supreme Court today heard oral arguments this morning in a case involving Facebook. They were sued in a class action for alleged violations of the Telephone Consumer Protection Act arising out of some text messages that they had sent to an individual who had not been a customer or user of Facebook and had a hard time getting the text messages to stop. They were security-based text messages.

 

      As is not surprising with the TCPA, this is styled as a very large class action and the TCPA offers enormous statutory damages when you get class actions going. That's why it's become a favorite of the plaintiff's bar, and we've seen a substantial uptick in litigation under it. But in the case that's before the court, and Professor Lyons is going to talk in a little bit about some of the history and how we got here, TCPA has actually been sort of a frequent flyer at the Supreme Court in the past couple of terms.

 

But the Telephone Consumer Protection Act was a 1991 statute. But I'm not going to get into all of the nook and crannies of it because it can get very reticulated, as anyone listening to this morning's argument found. But it's at 47U.S.C.227. And the parties here are really fighting about the meaning of a core definition in the TCPA for automatic telephone dialing system.

 

In 1991, Congress passed the statute to protect the privacy and quietude of Americans from annoying calls by making some calls illegal if they don't meet certain conditions, and they are, like consumer consent, and they are placed using an ATDF. And this term has been vexing to many, both at the Federal Communications Commission in private litigation and in compliance planning which we do some of.

 

So there's been previous litigation. What's up at the Court now is really a core statutory construction question about the meaning of the terms in this particular provision of what is an ATDF. The definition of ATDF is a gating mechanism for the obligations on calling parties such as consent or some of the exceptions, as well as for lawsuits, for violations of the TCPA, which has a private cause of action and statutory damages. But in short, in order to sue, a plaintiff has to be able to show that the call or text was made using an automatic telephone dialing system or auto-dialer.

 

So if it's not made using an auto-dialer, you can't sue over it. The definition, and I wish I had a white board to show you all this, the text will become important, but we're not going to be too belaboring it. It defines an ATDF as equipment that has the capacity "to store or produce telephone numbers to be called," and those words are going to be important in a second, using a "random or sequential number generator." And then it also says the ATDF has the capacity to dial such numbers.

 

You wouldn't think that this would generate hundreds of cases and disputes, but it has. It's also been pending as a definitive question before the FCC for some time. But this particular case has every doctrinal statutory interpretation canon that a law student could want to review from the rules of punctuation to the placement of commas.

 

So it was a really feast who care about those statutory construction issues because the Ninth Circuit had held and the plaintiffs here would like the Court to conclude that you don't have to use -- you don't have to trigger the "random or sequential number generator" piece if you're talking about the word store. So they want to be able to say you're an ATDF if you can store telephone numbers to be called regardless of whether that storage happens via a random or sequential number generator.

 

Facebook, on the other hand, says no, that adverbial phrase using a sequential number generator modifies both verbs, store or produce. So shockingly, this created a lot of verbal jousting today at the podium. Interestingly, both parties previously in their briefing had filed briefs that cited heavily to Bryan Garner, who's a linguistics guru and wrote a couple of books of Justice Scalia. He ended up representing the plaintiff at the podium, and we'll talk about in a few minutes how that all went.

 

But really, this is a fundamental fight that's been going on at the FCC and in courts for some time over how broad or how narrow to construe ATDF, particularly in light of changing technologies. And so one thing that came up repeatedly is that the lower court and the plaintiff's theory here would enable TCPA liability to attach potentially to even consumers use of smartphones, which certainly as many computers have the ability to store numbers and to dial numbers and to engage in random or sequential number generation.

 

And that's not fanciful. The FCC recognized that possibility from a previous broad interpretation they used. And it showed up repeatedly in the briefing and the arguments about the absurd consequence of the Ninth Circuit's approach here which built on a previous Ninth Circuit opinion.

 

So numerous amicus and the Solicitor General, who was involved here, urged the Court to hold that the most natural reading of this provision is that the capacity to use a random or sequential number generator relates to both storing and producing, and that if you don't have that, you don't have an ATDF.

 

On the other side, the plaintiffs and consumer groups as amicis framed Facebook's approach as a so-called narrowing of the TCPA's auto-dialer definition. They dismissed concerns that this approach to the text would convert smartphones into auto-dialers. But as we'll talk about, Justice Sotomayor recognized that's a very real possibility given the litigious nature of all of this.

 

So that's really the framing of this. It's a high-stakes debate because there are hundreds if not thousands of TCPA class actions filed in the federal courts every year. That number's been growing, particularly after a more recent Ninth Circuit case. And it's a definition that has been pulled and pushed by the FCC and litigants, and it's created a lot of uncertainty.

 

And so that's really the fight before the Court is the parsing of this statutory language, which cannons should carry the day, and how much, for example, the Court should be concerned about the fact that this is a 30-year-old statute that certainly didn't have at its inception some of the modern technologies that are used in the calling ecosystem.

 

So I think it'd be really helpful now if, Dan, if you maybe could tee up a little bit how we got here. I know you've looked at some of the cases that have come before this, we've been involved in some of those, but I'd love for you to set that table.

 

Prof. Daniel Lyons:  Yeah. So just to sharpen the pencil a little bit on some of the observations Megan was making, I think that it's exactly right that this isn't just a battle over esoteric statutory minutia that would be only of interest to telecom profs and grammar pedants. I think there's a really important backstory here that helps explain why the Supreme Court is giving this the attention that it is.

 

      According to WebRecon, which tracks these things, TCPA filings have exploded in the last decade. They've grown tenfold from something like 350 cases in 2010 to well over 3,000 -- 3,267 last year. And even that figure's down from the high point of 4,638 cases in 2016. And a lot of this is being driven by the expansive reading of the TCPA that we've seen in the Ninth Circuit and in some other circuits that are driving the case that is at the bar.

 

      And given that the average settlement for a TCPA class action is roughly about $6.5 million, it's not a surprise that this is becoming one of the hottest areas of class action litigation in drawing plaintiff's bars attention.

 

      And these are the cases that are being brought by robocallers, right, which are the entities that Congress ostensibly was targeting by the TCPA back in 1991. Then Commissioner Ajit Pai chronicled one case against the LA Lakers, who had offered fans a chance to text a message to the team to be placed on the jumbotron. And when the Lakers acknowledged the receipt of each message with a text saying not all messages are going to be selected for the jumbotron, they became the subject of a suit for violating the statute.

 

      And in 2018, the Philadelphia Inquirer was featuring a story about a 21-year-old who had really made a career out of manufacturing TCPA suits through things like placing an order, freezing his credit card payment so that the company would call back, and then suing them for having placed an unsolicited automated call.

 

      And as Megan had noted, this is not the first time the Supreme Court has taken up this statute. I wrote an article for the Free State Foundation's perspectives piece earlier this year that was noting that Duguid is the third TCPA case that the justices have heard in the last three years. Although, they involve very different problems with the statute.

 

      The first of them was a case called PDR Network, which involved the scope of the statute's junk facts provision. But the Court ultimately ended up remanding that case with regard to the intersection of the lower court's decision and some prior FCC guidance under the Hobbs Act, so which of them should control.

 

      The second case called Barr v. American Association of Political Consultants involved a portion of the statute where the government had attempted to create an exemption from the robocall ban for efforts to collect government debt. And the Court had held that favoring government speech over other types of speech for robocalls violated the First Amendment. But rather than striking down the statute as the plaintiffs had requested, the Court severed that government speech exemption.

 

      There's a First Amendment angle to the current case, the Facebook case, as well. Although, it's only really discussed in passing. Facebook had argued that if, as Duguid had suggested, the statute prohibits virtually all calls from a smartphone without consent, then the statute is overbroad and chills more speech than necessary to satisfy the TCPA's goals of protecting privacy and protecting public safety.

 

      That issue didn't come up at oral argument, and I don't really expect it to play a serious role in the Court's decision. All right, what more to you want to add, Megan?

 

Megan L. Brown:  No, I mean, I think the First Amendment angle's an interesting one. It has been brought up in repeated TCPA cases for more than a decade. I've wondered if the more modern court with a more open view of the constitutional validity of commercial speech and other speech would want to bite on that. I thought they did a nice job in Barr in explaining that the government can't self-deal when it's going to carve out exceptions to the TCPA.

 

      But I think more to be seen on the First Amendment implications of that. But the core argument is an overbroad TCPA statute really chills a lot of beneficial communications. It's not -- it has a farther reach, the TCPA does, than just getting at the annoying IRS calls or scam attempts that come in. It really does affect the legitimate communications of a variety of U.S. businesses large and small as well as charitable organizations.

 

      So I think there is a there there, and we'll continue to see that pop up. But of course, statutory arguments come first so that's sort of where the Court is ending up here. And quite frankly, it's high time that the auto-dialer definition get resolved, and we can discuss this in a little bit, but my preference would've been for the FCC to deal with this. It had ample opportunity. There were several petitions that are before them to fix this and to clarify it. And they have not done so, so they've left it to the courts to hash it out, which I think is unfortunate.

     

And I guess while we're on that, Dan, maybe I could just do a little atmospherics here for folks, right. Some of the impression folks could've taken from the oral argument is that there's a TCPA and that's it. That's the only thing standing between the marauding robocallers and the public to be victimized.

 

I think that was a myth, I think, in some of the advocacy here discussion is there is a whole lot of agency activity, both at the Federal Communications Commission, the Federal Trade Commission, and in Congress, that is putting out a lot of positive steps. They're going to be much more impactful to dealing with abuses in illegal calls than the TCPA and class action litigation.

 

You know, for the past three years, Chairman Pai on the FCC and really on a unanimous and bipartisan basis, has been, for example, clarifying the authorities of carriers to engage in blocking activity—that's not a gimme, there's risks to blocking telephone calls under federal law—getting tools out to consumers to block calls, implementing a new statute passed by Congress late last year called the TRACED Act, putting in new technology protocols called shaken and stirred that will help authenticate calls, and setting up a reassign numbers database.

 

One foot fault that a lot of folks make is if a business calls a cell number that has been reassigned, which is a pretty frequent occurrence, if they did it more than once, they could get hit with a TCPA lawsuit. So they need a reliable place to go and look for those reassigned numbers. So the FCC has been a veritable hive of activity on robocalling, and I think that was a bit missing from the discussion here. The TCPA, from my perspective, is not the central mover in protecting consumers from unwanted calls. It's a lot of the stuff that's been done in the last three years.

 

Prof. Daniel Lyons:  Yeah. I 100 percent agree with that, and we can get into this a little later if we wanted to. My sense is not only the fight against robocalls shifting to other legal tools, but in fact, the primary use of the TCPA is not helping out in the battle against robocalls at all. I think the TCPA has gone off the rails and is moving a completely different direction that is not only not helping us with robocalls but actively undermining our ability to achieve data security.

 

Megan L. Brown:  I totally agree with that. So, I guess, since folks dialed in and want to hear what happened in court today since they may not have had time to listen to C-SPAN, Dan, you want to give us your sense and then I can chime in on what happened at argument today?

 

Prof. Daniel Lyons:  Yeah. I think it was an interesting argument. In part, I think as you had mentioned earlier, right, these are two titans. Facebook was repped by Paul Clement, he's been a long-time veteran of the Supreme Court bar. He was at his typical high level. And then they're splitting time with the federal government.

 

      The plaintiffs were represented by Bryan Garner, who I think was making his Supreme Court debut. But as Megan had mentioned, right, a well-known in legal circles as an authority on legal writing. But I'm curious as to your take, Megan, but my sense was that Clement had the better of the argument today.

 

      I think most, if all, of the justices seemed willing to side with Facebook that their reading was the better or at least the least objectionable interpretation of the statute. The primary difficulty that I think Clement faced walking in was having to explain the seeming ill logic of how a device can store numbers using a random or sequential number generator.

 

      But Clement had an answer to that. He cited an amicus brief showing there were some devices that were doing more or less that in 1991. And so that gives them at least some cover to suggest this is -- it's possible this wasn't just inartful drafting.

 

And then I think by comparison, Garner seemed to face an uphill battle. I think right out of the gate, the Court was pushing him to concede that his reading of the statute wasn't the most natural reading. I think he had a pretty good example of how one might read a sentence in the way that he suggested.

 

He had a hypothetical statute instructing one to maintain or acquire land using imminent domain, right. And the idea is you have a direct object there, land, but the modifier afterward, using imminent domain, obviously only affects acquiring, not maintaining. That no one could possibly understand that as meaning maintaining land using imminent domain or acquiring land using imminent domain.

 

      The Court didn't seem to want to bite on that. I think they gave him credit for the hypothetical but suggested this isn't that, that the interpretation is not the most natural interpretation, grammatical, correct interpretation is not as absurd as his imminent domain example.

 

      One thing that surprised me, I felt like given the background and the briefs and Bryan Garner's involvement, I really expected this to be a really deep clash about the cannons of statutory interpretation, like really into the nuances of grammar. But the justices seemed to really, at least at oral argument, move away from technical grammar rules. So there was a whole lot of discussion about how would an ordinary person in 1991 have interpreted this kind of clunky statute?

 

      Garner also, I think, leaned pretty heavily into the privacy aspect, and that's not a surprise to me both because the opposing party was Facebook, which has its privacy issues in the past, but also because they're trying to highlight that the purpose of the TCPA was protecting consumer privacy. But I thought Clement rather deftly parried that by talking about the notion that the automatic telephone dialer provision, right, the one provision that's at issue here, didn't apply to calls to residential landlines, which was the primary way that the average joe got a telephone call back in 1991.

 

      He at least pitched the ATDFs as a supplemental provision to the primary robocall statute. That was designed to address calls to emergency rooms and public safety and cell phones, which were very uncommon in 1991. And he built an argument that the reason why we were addressing this ATDF provision to those numbers in particular was because that they were uniquely susceptible to harm from random or sequential number generation. And so I thought that was fairly effective.

 

      As Megan indicated, the justices did seem really bothered by the breadth of plaintiff's interpretation, that if we interpret the statute broadly, that every smartphone potentially becomes a tool for litigation. And Garner tried to downplay that, at least at oral argument. I don’t' know that he did a great job with it.

 

      One --

 

Megan L. Brown:  If I could jump in there, Dan --

 

Prof. Daniel Lyons:  Yeah, go ahead.

 

Megan L. Brown:  -- I was going to saw that's something that stuck out at me was I was surprised when I heard Justice Sotomayor pipe up and ask about that, that consequentialist argument about the possibility that your average consumer using a smartphone could end up running afoul with the TCPA. And I thought Bryan gave her, maybe not a glib response, but Americans are law abiding and there's lots of deadly weapons around peoples' houses, but we don't see people abusing it.

 

And I thought that really whistled pass the graveyard there, and she did pull him back on that, noting, at least I think I recall, implicitly perhaps that given the way litigation happens under the TCPA, it doesn't take an unlawful act to be sued under the TCPA. In fact, the TCPA dockets are full of allegations that are grey at best and often are accidental and inadvertent because it's almost like a strict liability statute with these statutory damages. So I thought she certainly wasn't buying what he was selling on the idea that that's an overblown concern.

 

      And then I did think it was interesting that Justice Barrett came back towards the end. She was obviously the last questioner as the junior justice, and she was asking Bryan as well if she were to setup her iPhone responses to text messages to send an automatic reply that I'm working or I'm driving or I'm sleeping, wouldn't that be the kind of automated storage and use that his theory would potentially make unlawful or at least subject to suit.

 

      So while you can chuckle at some of the hypotheticals, the cell phone example is not super fanciful as seen by the comments of both Justices Sotomayor and Barrett.

 

Prof. Daniel Lyons:  And I think Justice Gorsuch was pushing on this too. The way that Facebook is -- I'm sorry, that Duguid is trying to limit that concern as to say well, the call still has to be made through some type of automated process. And so there's this back and forth about what counts as a fully automated call versus what counts as something where there's human intervention at some point.

 

      But I think Justice Gorsuch was correct that when you read the statute, right, that concept of human intervention isn't one that's in the statute anywhere. The statute just says that it's a violation if you use equipment that's capable of storing or producing. So if storing just means storing numbers, then the phone is an automatic telephone dialing system by virtue of the fact that it can store a number whether the calls gets placed using an automated process or even a human process.

 

Megan L. Brown:  Right.

 

Prof. Daniel Lyons:  So it was an interesting little satellite that I don't think got enough attention in the briefing but certainly got Justice Gorsuch's attention.

 

Megan L. Brown:  Well, and I think it's really important. This is where one thing I thought was absent also from the discussion was if you pass -- if a plaintiff passes through that gating question of yes, there's an ATDF in play, right. So let's say someone sets up -- a small business sets up a text messaging group text to, say, 100 customers, you know, a small business, not going to pay a third party to run this for them and someone sues them.

 

The ATDF determination is the gating mechanism, but that's doesn’t mean that the call was either lawful or not. That gets then to questions like did you have adequate consent? And depending on the type of the call and the previous relationship with the recipient, did you have express written consent? And there's a whole panoply of rules and foot faults and trips here.

 

But the point from a litigation perspective is then you're in the suit. Then you're stuck doing discovery and what happens is if there's large class actions, it just becomes overwhelming, and the tendency is to settle because the dollar values can rack up so fast, given that it's $500 of $1,500, that few companies will litigate this all the way to determine things like adequate consent or revocation or all the other little nooks and crannies of the statute.

 

So the ATDF piece is pretty darn important, and it's, like I said before, it's a real shame that it's been left to a bunch of court decisions to hammer this out on pain of enormous liability rather than the regulator taking control of this and doing what it should do, which is address a lot of the concerns that were -- I heard voiced by several of the justices that there's a mismatch here. Technology has outpaced the statute.

 

In fact, Justice Thomas, I think, hinted at a core frustration that gets at some of what you were saying, Dan, about the technical complexities here. Well, one reason we're dealing with all of these weird technical hypotheticals is because the FCC determined that a text message is a call under the TCPA. And Justice Thomas early on asked either the government or Clement why is a text message a call? And the answer is because the FCC treated it as such. But that also contributes to this confusion potentially about how these turns lay onto technologies and mobile applications and other things that are being developed that don’t neatly fit into this, perhaps, this ATDF definition from 1991.

 

Prof. Daniel Lyons:  Yeah, and that touched on a couple of other things that I thought were really interesting. One was right out the gate, the government started by saying this case should begin and end with the grammar. And so the justices pushed the solicitor general's office pretty hard on the question of what does that mean that this is a clear statute, that there's no ambiguity?

 

      And, of course, that's an interesting question because if the statute is clear, then there's no real room for the FCC to interpret. And there is still a live docket at the FCC, an open question about the meaning of this statutory language.

 

[Crosstalk]

 

      Oh, I'm sorry. Go ahead.

 

Megan L. Brown:  I was going to say, and the SG's office is actually really clear and candid, I thought, at the podium saying we don't want to answer that precisely because even though we think the clearly better read of the statute is ours, institutionally, they didn't feel like it was fair to prejudge that for the FCC.

 

      Now, candidly, I think they should've. And I remain as much a fan as I am of Chairman Pai. I think it was a big missed opportunity for this commission not to take the opportunity, as it's been requested multiple times to address this. But I thought that was really interesting that the SG's office was so candid with the Court, that they didn't want to hem in the FCC because they haven't seen what the FCC was going to do. But they certainly indicated they thought the far better read of the statute was theirs and that it would be very difficult to come up with a contrary one.

 

Prof. Daniel Lyons:  Yeah, and I think Justice Barrett had a nice Chevron related question on that theme too, that when we considered the theory behind Chevron, the idea is that Congress is intentionally leaving ambiguity. They're teeing up a set of options for the agency to choose from. And she was questioning whether this was -- fit that scenario where this is a situation where Congress is intentionally telling the agency hey, you can go A or you can go B, rather than simply in-artfully drafting but having a clear message in mind.

 

      The other thing I thought was really interesting, subtext that was running through some of the questions, was what do we do with this statute, right? The plaintiffs were pushing on the idea that if you accept Facebook's interpretation, then this provision is basically read into oblivion. It doesn't count for anything anymore.

 

      And Facebook responded well, if you read Duguid's interpretation of the statute, then it's so broad that it captures everything. Either way, you have an imperfect statute. And so one question that comes up is okay, what do we do with that? We have this old statute from 1991 that everybody agrees is fairly outdated. Is it our job to take that into account in our analysis, or is it Congress's job to clean up its mess? And I thought that was an interesting question as well.

 

Megan L. Brown:  Yeah. I forget which justice actually asked that particular question which is basically when do we throw up our hands and say we can't fix this or we can't make hash of it, because a lot of the justices seemed uncomfortable with, for example, I know one of the justices pushed back. I think Justice Kagan was pushing back on Garner's statutory interpretation argument as being ungrammatical and saying he was the one who was, in effect, revising the statute to make it something that it's not.

 

      And so you saw this push-pull, but I think overwhelmingly, you got the sense that they're frustrated that this statute is such a mismatch. I'll say, I've been part of discussions about amendments to the TCPA and different things. It's very frustrating how difficult it is to even clean up some basic issues to modernize this just because you've got consumer and protection in the name of the statute, it makes it very difficult for people to want to do the right thing and clean up some of these issues that are out there.

 

      The TRACED Act was passed last year. It did a lot. It could be seen to ratify some of the key elements of the TCPA. I read it differently, having a little insight into the legislative process. It was really focused on moving forward these new technologies that are going to come out and making the FCC do more on that front. But I think it was a missed opportunity, with all due respect to my friends on the Hill, to clean up some of these excesses of the TCPA. But I could see the justices frustrated that they've got this poorly worded and anachronistic statute.

 

Prof. Daniel Lyons:  Yeah, 100 percent agree. Yeah, so that was more or less my take on argument. I don't know if you had any additional comments, Megan, or if you thought who had the better of the day and where you think the Court may go with this.

 

Megan L. Brown:  I mean, I hate to make too many predictions or pick winners and losers in litigation, but I thought Clement had the better of the day. I think he has the better of the argument. I think the context of the case is particularly interesting and should weigh on the Court in that yes, it's Facebook and so it's a large company who you may -- your gut may not be terribly sympathetic when you hear large dollar values because they're a large company.

 

But when you look at the effect of TCPA litigation throughout the economy on small businesses, innovators, your regular old companies who were being faced with these class action lawsuits that are really, in my opinion, a lot -- they look a lot like shake down operations, frankly. There are some plaintiff lawyers that the U.S. Chamber has identified, for example, who keep a box of cell phones under a desk and let calls rack up so that they have more grounds for the statutory damage calculation.

 

      I think the consequences are large. It's a lot of federal litigation. And I hope the Supreme Court keeps that in mind and that it's not just oh, Facebook had a technology that sent this gentleman unwanted texts, which it does seem like that's what happened but that it's perfectly reasonable to construe the statute consistent with the intent of Congress and several FCC commissioners have long called for the statute to be construed and that if there is a problem in need of fixing, Congress can address it.

 

In fact, I would argue, it's already addressing it through many of the actions under the TRACED Act as well as the several many, many FCC activities including one today that was just rolled out to create a portal for consumers and others to report bad actions by calling parties and others that will be different from their normal consumer complaint approach.

 

      So there's certainly a lot of stuff going on, perhaps the most meaningful being these very large enforcement actions that the FCC and the FTC are bringing against what are called gateway providers who enable large amounts of traffic to come into the United States and to be transiting our network.

 

      So I hope that the Supreme Court understands that broader context of this and the risk that this cottage industry of litigation is not helping abate the problem and is really just a windfall for certain plaintiff lawyers who have seized on the TCPA to make quite a bit of money.

 

Prof. Daniel Lyons:  Yeah, I agree with that. And I think it's funny to me as somebody who teaches telecommunications law to the next generation of law students, who sometimes have trouble putting themselves into the mindset of the legislators who are writing many of these key laws back in the '90s, right? There's a sense in which it's actually kind of a benefit to us that the Supreme Court has lived through this era and understands what the state of the world was in 1991.

 

      And I need to correct that the primary goal here is to get in the heads of Congress in the '90s and ask what were they trying to do in 1991? But I think it's also -- it would not be a complete story without addressing what the real-world impact of TCPA litigation is today. And I agree with you that it's overwhelmingly, I think, a negative, even in this case, right.

 

      Duguid was complaining that he had received some texts from Facebook, but the reason why Facebook was engaged in texting him I think is important. Facebook was using two-factor authentication to tell customers who had accounts that they were being accessed from a new device, and so they sent a text to make sure that the account wasn't being hacked.

 

      It sounds like the phone number that Facebook had connected to a particular account had at some point been recycled, right. It had gone from the original number holder to Duguid. And so he was receiving notifications about someone else's Facebook account potentially being hacked.

 

      But the fact that the point was network security, right, in some sense protecting the privacy of Facebook consumers I think is important here. And the more that the TCPA allows errant text messages or phone calls to generate class action liability, the harder it's going to be for companies to use two-factor authentication to protect their consumer base. And two-factor authentication is one of the strongest tools we have in our current toolkit to lock down data security.

 

Megan L. Brown:  Totally agree. And I think you hit on two things there. One is the reassigned number issue, which is a real challenge. And two is the difference -- the question about what was in the minds of legislators in '91.

 

On the what was in the legislator's mind in 1991, right, if you look at the legislative history, they were very focused on the dinner hour interruptions from telemarketers, right. And that was the paradigmatic issue back in 1991 was that it was very annoying to consumers to get calls in the dinner hour. You pick it up and it's an automated voice, it's a pre-recorded message. So that was the -- there's other details around the edges, but that was a main use case that they were trying to address.

 

      And then when you carry the obligations now forward to text messages and you think about the many useful text messages that companies are going to send out, whether it's security as you just articulated or if it's notifications from your dentist office. Each of those kinds of communications is now fraught with these additional regulatory burdens, and some of them might be manageable.

 

But this threat of crushing liability for an errant text message or a campaign that uses an outdated list, because of the reassign number issue that you identified earlier, that the numbers -- there is no reportability, but the numbers move around a lot. And there's a lot of cases under the TCPA that were be brought because you had a number that gets switched over to a new person and the way the FCC under the Wheeler's administration, the prior FCC, have resolved that was basically a very stingy strict liability kind of regime.

 

      You get one missed dial call, and now you're on the hook. And so that's difficult for a lot of companies to have enough of a robust regime to handle both notifications of changes and then things like revocation of consent. A lot of my colleagues spend time advising companies on how to setup compliance systems and marketing campaigns. And this revocation of consent that you consent at one point because you signed up with the dentist or you want a table at the Cheesecake Factory and they're going to text you when it's ready. And then how you revoke that consent is kind of important because if they send you a text message after you've revoked, now they're on the hook.

 

      But the FCC previously had said you can revoke in any reasonable way. You can call them. You can send them a letter. You can email them, and they made it very difficult. And so it really has become a trap for the unwary and a game of gotcha by the plaintiff's bar. And I think that's a really unfortunate trend in this TCPA litigation that I hope the Supreme Court keeps that in mind. I think some of the amicus briefs did a very nice job explaining that concept, but I think it gets short-tripped sometimes in the discussion.

 

Prof. Daniel Lyons:  Yeah. 100 percent agree with all that.

 

Megan L. Brown:  So I think, I mean, I don't know, Dan. I think we've covered a lot of waterfront here. Hopefully, folks, when they hear all these acronyms, aren't totally asleep. I think, Nick, if we have some folks who want to pose some questions, the Professor is probably extra good at answering questions. But I think we can probably see if there's anyone who wants to try and stump the briefer here.

 

Nick Marr:  Yeah, that'd be great. Thanks, Megan. And our first caller on the line here.

 

Rebecca(sp):  Hi. My name's Rebecca. Hi, Megan. We spoke just the other day. I'm wondering how -- it was wonderful for you guys to give the case law behind the most recent case, prior decisions. I was familiar with the Telephone Consumer Protection Act back during my time on the Hill but not recent case law dealing with it.

 

      And you mentioned something about the government exclusion that was struck down. How does that apply to all the incessant texts I was getting from a 703 code during the election season that would start with, "Hi, Lydia." You know, and it was from Democratic groups trying to get out the votes or whatever. One, I'm a Republican. And I sent them back nasty texts quoting the Telephone Consumer Protection Act. One actually replied to me saying they were excluded. I know charities were excluded, but do the political groups still -- are they still protected when that government thing was struck down? I wasn't quite clear on that.

 

Megan L. Brown:  So, Professor, you want to take this? 

 

Prof. Daniel Lyons:  Yeah. So Barr was focused specifically on the part of the robocall statute that was exempting attempts to collect government debt. So they said you can't allow robocalls to collect government debt while not allowing commercial robocalls for other purposes. The do not call list exemption for political speech is, I think, slightly different. That part either hasn't been challenged or if it's been challenged, it's been upheld. I don't have a clear --

 

Rebecca:  That was the next part of my question about the do not call list and how it dovetailed.

 

Prof. Daniel Lyons:  Yeah. I don't -- Megan, do you have any thoughts on that?

 

Megan L. Brown:  You know, I'm not a do not call expert, but a lot of my colleagues have advised political campaigns on robocalls and texts. And there are restrictions, like they have to meet certain requirements when they use autodialed calls. But they do have some leeway that is different than either commercial actors that are doing telemarket -- that are doing telemarketing work or the charitable exemptions.

 

      So it is fraught. We spend a fair bit of time advising folks on how not to screw it up, but it is -- they do have a different regime that gives them more latitude because of the First Amendment implications. And there are currently some activities that the FCC, for example, on various new technologies that campaigns use. So it's in flock, but unfortunately or fortunately, depending on whether you're on the receiving or the making end, the political campaign can do a lot more than your average commercial actor.

 

Prof. Daniel Lyons:  It's an interesting question whether the political campaigns want to take advantage of this leeway moving forward given how negatively folks view robocalls generally. I think Chairman Pai noted that robocalls continue to be the number one driver of consumer complaints at the FCC year after year after year. So even if legally, campaigns can engage in robocalls, it's a question whether they want to continue doing so and making it a big part of their get out the boat strategy. 

 

Megan L. Brown:  And let's be also very clear. In this past election, there was some real serious issues about folks peddling this information, engaging in what looked to be like unlawful activity, and really pushing the bounds. So there's certainly some shady activity that goes on. So I think we all struggle with that onslaught, Rebecca, of the political texts. So it's a challenge.

 

Rebecca:  But they still have to -- if you tell them to stop texting, don't they still have to stop? Or is that controlled by them?

 

Megan L. Brown:  No, I believe so. Yes.

 

Rebecca:  Thank you.

 

Nick Marr:  Okay. So we don't have any questions in the queue right now.

 

Megan L. Brown:  I'm going to follow up on Rebecca's point and direct people to the FCC's website that if you google it, you can go to their consumer page. They actually say -- I'm going to read one thing which is, "Political campaign related autodialed or prerecorded voice calls, including live calls, are prohibited to cell phones, pagers, or other mobile devices without the called party's prior express consent."

 

      So political campaign related calls are permitted to landline telephones without express consent, but it's mobile where they run into problems. And I think, Rebecca, probably some of the texts you got were illegal. But it's kind of like playing a game of whack-a-mole. I do a lot of work with the service providers, and they are constantly shutting down and trying to ferret out some of the bad actors.

 

Prof. Daniel Lyons:  And that is, I think, the biggest problem that we see with, practically, with robocalls moving forward is that the TCPA's use of the private right of action as the way to chill robocalls assumes that the robocall sender is somebody that you can identify and sue. And in a world where call connectivity globally is super easy, it's much more difficult, I think, for us to identify and nail down and then sue people who are engaged in robocalls.

 

      So robocall numbers are up dramatically over the last five or six years. But almost always, they are coming from hard to trace numbers that are beyond our border, which means the TCPA is a very limited use in combating them. I think a lot of the technical measures that you cited earlier, Megan, will end up being in a practical sense the more useful tools to combat the robocall problem moving froward.

 

Megan L. Brown:  Yeah. There's a whole effort called the Industry Traceback Group, which is being codified into certain regulatory obligations, that its whole focus is to try and find the root cause and source of the bad traffic because it's not the typical TCPA defendants that are doing these massive robocall scams and campaign.

 

      They've brought enforcement actions against some particularly bad actors, and the industry is working hard with the FCC, DOJ, and the FTC to do things like know your customer and trace the origins of the calls. But that requires technology changes in the way calls are signed and handled. And so I'm not going to bore the audience with that, but it is very promising what's going on. And I think that's really where federal resources are probably going to be most effective is to look at the real bad guys and try and change the incentives for them and go after them. Because what they're doing is criminal and civil -- subject to criminal and civil liability.

 

      So that's a place to really dedicate resources. I think that's why my frustration with TCPA litigation is it feels like it's a waste of resources compared to something that could actually make a difference.

 

      So, Nick, do we have any other folks in the queue, or are we wrapping up?

 

Nick Marr:  Yup. We don't have any questions right now, and since we're coming up here on the end of our time, I'll offer a chance for closing remarks. And then we can close out a little bit early.

 

Megan L. Brown:  I'll go first so Dan, you can have the last word. I think if you want a good overview of the statutory construction cannons, I highly recommend grabbing the United States reply brief off of SCOTUS blog and reading through that, a lot of the ins and outs of some of the key cannons of statutory construction.

 

      If you want a sense of what's at stake, I like the U.S. Chambers has done a lot of research on these issues. They have several studies that they've done on the proliferation of lawsuits. And their amicus brief in this case walks through some of the really terrible unintended consequences.

 

      So from my perspective, I am optimistic that the Court is going to have a reasonable approach to the storage question and clean up this auto-dialer problem that's been vexing the courts as these cases percolate. And hopefully, the FCC will do the same. Although, I think the window for a reasonable approach to that is drawing closed because what we saw at the end of the previous administration was a very, very aggressive and plaintiff friendly approach.

 

      So that's my overview of what's at stake in this case and how I think it's going to hopefully come out, which is in Facebook's favor.

 

Prof. Daniel Lyons:  Yeah. I think I agree that this case is Facebook's to lose. I think they've had the better of the argument on the statute, and I think oral argument today tilted in their favor. If you go look at the briefs, it's a bit of a flex, right, that both Facebook and the government are citing back to Bryan Garner's treatise, using his own tools against him. And that came up in the questions too.

 

      And, you know, just one of the strategies for selecting Garner, right, is to be able to make the case this is atypical, this is unusual. But if that's your litigation strategy, you really got to pull it off, and I'm not sure that it was ultimately successful.

 

      I will say that the real complicated -- and so Justice Scalia once described the 1996 Telecommunications Act as not a model of clarity. In fact, in some ways, it was a model of ambiguity. I think the TCPA is similar in its ability to confuse more than help. And as the years pass, this becomes error-carried forward or error-compounded, right, that the inartful drafting in the '90s has only gotten worse as technology has made even the clear parts more and more obsolete.

 

      So in my mind, the fact that the TCPA has been up three times in three years and we continue to go back and forth on the net neutrality fight just suggests to me that it's long past time for Congress to overhaul a lot of our telecommunications statutory infrastructure and to think about what it looks like to create a series of statutes that aren't contingent or aren't premised on the ideas that we all have residential landlines and that we want to create competition among local telephone providers using various FCC cost formulas, right.

 

      I think we are long overdue to revamp this whole area. That having been said, I think the likelihood of seeing a lot of movement in Congress on any of these issues in the next administration or in the next couple of years, I think, is not great. So maybe that we have to continue limping along and having the courts do their best with the language that we're given.

 

      And so just to plug, I think, Megan's theme earlier, that's going to involve a lot of heavy lifting by the FCC if they're going to make sense of these particular in-artfully drafted statutes and modify them to do the minimum amount of harm to this mid-21st Century telecom architecture.

 

Nick Marr:  Great. Thank you both very much. And on behalf of The Federalist Society, I want to thank you both for the benefit of your valuable time and expertise this afternoon in covering this case. Thank you to our audience for calling in and for the great question we got. Keep an eye on your emails and on our website for announcements about upcoming Teleforum calls. We have a few more this week, a couple more next week so check those out and hope to see you there. Thank you all for joining us this afternoon. We are adjourned.

 

[Music]

 

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.