Supreme Court rules that Facebook's phone system isn't illegal

The Supreme Court has sided with Facebook Inc (NASDAQ:FB) in a lawsuit filed over its text alerts. The justices voted unanimously that the social networking giant's phone notification system does not violate a law that prohibits "automatic telephone dialing systems." Q4 2020 hedge fund letters, conferences and more Supreme Court rules Facebook didn't violate law […]
Supreme Court rules that Facebook's phone system isn't illegal
Image credit: mohamed_hassan / Pixabay via Valuewalk

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This story originally appeared on ValueWalk

The has sided with Facebook Inc (NASDAQ:FB) in a lawsuit filed over its text alerts. The justices voted unanimously that the social networking giant's phone notification system does not violate a law that prohibits "automatic dialing systems."

 

Q4 2020 hedge fund letters, conferences and more

Supreme Court rules Facebook didn't violate law

According to Fox Business, the court said the Telephone Consumer Protection Act of 1991 refers only to systems using sequential or random number generators. However, Facebook's phone system does not. Justice Sonia Sotomayor wrote in the opinion issued by the court that Facebook's text notification system "neither stores nor produces numbers 'using a random or sequential number generator.'" She added that the system isn't an auto-dialer.

Noah Duguid sued Facebook after receiving multiple text messages telling him that someone was attempting to log in to his account from an unknown browser. He claimed he didn't have a Facebook account and never gave the social networking giant his phone number, and he filed the lawsuit after he couldn't get the texts to stop.

Duguid argued that the text notification system violated the TCPA because he kept receiving unwanted messages. However, the problem with that allegation is that the law specifically prohibits the use of auto-dialers that can "store or produce telephone numbers to be called, using a random or sequential number generator" and then dial those numbers.

Breaking down the argument

Fox Business explained that the lawsuit's main allegations were based on syntax and whether the phrase "using a random or sequential number generator" applied to both "produce" and "store." Duguid argued that the phrase only applied to producing phone numbers, which would mean that any phone system that could store numbers and dial them without using a generator was against the law.

However, the Supreme Court ruled that the TCPA only bans systems that use sequential or random number generators, whether they were producing or storing them. The social network's system stores and dials numbers that were given to them rather than numbers it generated.

Sotomayor explained that the auto-dialer definition established by lawmakers "requires that in all cases, whether storing or producing numbers to be called, the equipment in question must use a random or sequential number generator." She added that the definition doesn't include systems like the one Facebook uses to notify users about login attempts for their accounts. The ruling reverses the decision made by the Ninth Circuit Court of Appeals.

Facebook is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.

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