The meaning of an “automatic telephone dialing system” (“ATDS”) as defined by the Telephone Consumer Protection Act (“TCPA”) has been hotly contested since the D.C. Circuit invalidated the prior Federal Communications Commission (“FCC”) rulings interpreting the TCPA in 2018. The Ninth Circuit has held that merely calling numbers from a stored list is sufficient to meet the definition of an ATDS, while the Third Circuit has at least indicated that the ability to generate numbers randomly or sequentially is the defining characteristic.
On January 27, 2020, the Eleventh Circuit entered the fray and concluded that to qualify as an ATDS a device must be capable of generating numbers randomly or sequentially. The Eleventh Circuit acknowledged that “[c]larity, we lament, does not leap off this page of the U.S. Code.” Nonetheless it concluded that “conventional rules of grammar and punctuation” require that the phrase “using a random and sequential number generator” modifies both the verbs “store” and “produce.” Importantly, the Eleventh Circuit held that “[i]f all you need to show is storing and calling, that would apply to the ‘capacity’ of nearly every piece of equipment, whether designed to produce randomly generated numbers or not.”
Just three weeks later, on February 19, 2020, the Seventh Circuit followed the Eleventh Circuit’s reasoning and held in Gadelhak v. AT&T Services, Inc. that a defendant’s dialing system did not constitute an ATDS under the TCPA where it was not capable of generating random and sequential numbers. The Court analyzed the language of the TCPA and determined that, as written, there were four potential ways to interpret the statutory language. Relying on basic rules of grammar and punctuation, as well as the technology that was available at the time the TCPA was enacted into law in 1991, the Seventh Circuit decided that the Eleventh Circuit’s interpretation in Glasser was the most persuasive. Therefore, the Court concluded that, to be an ATDS, a device must be capable of generating random and sequential numbers. In other words, the Seventh Circuit agrees that a device is not an ATDS merely because it dials from a stored list of numbers.
Thus, under the reasoning of the Third, Seventh and Eleventh Circuits, random and sequential number generation is required for a device to be an ATDS under the TCPA; a device, such as a predictive dialer that can merely dial from a stored list of phone numbers, does not satisfy the definition. The Supreme Court is expected to weigh in on these issues and resolve the developing circuit split between the Third, Seventh, Eleventh Circuits and the Ninth Circuit.
Update: ATDS Clarity May Finally Be on the Horizon
The TCPA, 47 U.S.C. 227 et seq, makes it unlawful to call or text using an ATDS certain types of phone numbers without consent. Statutory penalties for a violation can be up to $1,500 per call or text placed in violation of the statute, giving rise to potentially catastrophic risk to companies facing class action litigation. Thus it comes as no surprise that in the nearly thirty years since the TCPA was passed, untold amounts of money, time and resources have been spent arguing over exactly what constitutes an ATDS, particularly given the evolution of technology during that time. In the past two years, a circuit split has developed. The Second and Ninth Circuits have construed the statute broadly, concluding that to be an ATDS the dialing system need only have the capacity to store and automatically dial numbers. The Seventh and Eleventh Circuits, on the other hand, have held that it is not enough to automatically dial numbers from a stored list. Rather, an ATDS must have the capacity to automatically generate telephone numbers randomly or sequentially and dial them.
On Thursday, the Supreme Court decided to take up the question, by granting certiorari in Facebook, Inc. v. Duguid, No. 19-511, a case out of the Ninth Circuit. While it remains to be seen which way the Court will rule, one thing is almost certain – after nearly thirty years we will finally know what constitutes an ATDS.