Window to the Law: TPCA Update on Cell Phone Marketing

Window to the Law: TPCA Update on Cell Phone Marketing: Transcript

Hello, I’m Jonathan Waclawski, Senior Political Compliance Counsel and Director of Legal Affairs at NAR. Welcome to this episode of Window to the Law.  

In this episode, I will share with you an important legal update speaking to real estate professionals’ ability to more freely use their cell phones for marketing purposes without fear of TCPA liability.

On April 1, 2021, the United States Supreme Court issued its long-awaited opinion in Facebook v. Duguid.  In its unanimous decision, the Supreme Court not only overruled the Ninth Circuit Court of Appeals, but resolved a growing divide among federal courts by narrowly interpreting what constitutes an automated telephone dialing system (or ATDS) under the Telephone Consumer Protection Act (or TCPA).  The Court’s holding made clear that the TCPA and its prior consent requirements only apply to devices that have the capacity to store or dial numbers actually using a random or sequential number generator.  Importantly, the decision has no impact and does not change adherence to existing Do Not Call registry requirements.

You may recall that the TCPA requires prior express consent when using an automated telephone dialing system to make calls or texts to wireless numbers.  Failure to obtain such consent can lead to legal liability and exorbitant penalties and fees.

Prior to the Facebook decision, real estate professionals, were often times left wondering whether use of their cellular phones to make individualized marketing calls triggered the TCPA consent requirements.  A handful of federal courts, like the Ninth Circuit, created this confusion by interpreting ATDS so broadly to include any device that could store telephone numbers, even if the device did not employ a random or sequential number generator.  This broad definition implicated any smartphone used to make calls or send texts.

The Supreme Court recognized the impracticality of such a broad definition reasoning that, “Expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress mean to use a scalpel.”

While the Facebook decision will likely quell caustic and costly class action TCPA lawsuits, don’t get your hopes up too high yet.

The Court’s opinion left some ambiguity as to what constitutes “capacity” and “use” in the definition of an ATDS.  As a result, certain calling technology, such as predictive dialers and blast texts may be the subject of future litigation on the issue of whether they constitute an ATDS.  Furthermore, the Facebook decision did not sit well with certain pro-consumer rights federal and state legislators who believe the TCPA should be broadly applied.  Therefore, Congress and perhaps even state legislatures may consider new laws affecting marketing calls on the heels of the Facebook decision.

That said, as a result of the Facebook decision, real estate professionals may, without fear of TCPA liability, use their cell phones to make marketing calls and texts without consent so long as they are not using a random or sequential number generator AND are otherwise adhering to the Do Not Call registry restrictions.  Obtaining prior consent from those you are looking to call or text for marketing purposes is still highly recommended and remains the gold standard to protecting against TCPA liability.

Check out NAR’s TCPA and Do Not Call resources to ensure your calling and texting activities are compliant.

Thank you for watching this episode of Window to the Law.