More than a year has passed since the Federal Communications Commission (FCC) ended its supplemental comment period aimed at providing guidance on the definition of an “automatic telephone dialing system” (ATDS or autodialer) under the Telephone Consumer Protection Act (TCPA). What constitutes an ATDS—and therefore what types of telecommunications devices may be subject to the TCPA—has been at the heart of thousands of lawsuits filed over the past few years. In the absence of meaningful guidance from the FCC, courts and litigants have focused on different factors and provided conflicting answers to this crucial question. Ultimately, this lack of guidance has left everyone guessing as to which devices meet the statutory definition of an ATDS, and even under what circumstances. In light of the TCPA’s statutory damages provision that allows for $500 per violation (and treble damages for reckless or intentional violations), plus attorneys’ fees with no cap on damages, this lack of clarity is particularly concerning in the context of potential class action liability.

What is an autodialer? A review of the text of the TCPA

The TCPA defines an ATDS as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”¹ At first blush, this statutory definition seems clear enough, but the TCPA was passed nearly thirty years ago and, unsurprisingly, does not adequately address contemporary issues presented by current and emerging telecommunications technology. This incongruity poses a challenge for companies trying to comply with the TCPA as they attempt to bridge the noticeable void left by the TCPA’s antiquated guidance.

The FCC, DC Circuit, and Ninth Circuit weigh in

In 2015, the FCC tried to fill this gap by largely expanding the ATDS definition to include devices with the mere capability or “capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers,” even if the device is not actually used as an ATDS.²

But then, in 2018 in ACA International v. FCC, the DC Circuit rejected the FCC’s broad definition as beyond the scope of Congressional intent and leading to a potentially “eye-popping sweep” of the statute under which every smartphone could conceivably qualify as an ATDS.³ The DC Circuit also found the 2015 Order to be inherently contradictory; on one hand, the FCC indicated that a device must be able to generate random or sequential numbers that the device can then dial, but, on the other hand, also suggested that a device need only dial from a set list of numbers to constitute an ATDS.⁴ As time would tell, the FCC would not be alone in providing an awkward interpretation of the two-pronged ATDS definition.

Later in 2018, the Ninth Circuit moved back toward the FCC’s definition—and perhaps further—in the widely cited Marks v. Crunch San Diego, LLC. In Marks, the Ninth Circuit found the ATDS statutory definition to be “ambiguous on its face” and looked to the context and structure of the TCPA, as well as the Congressional intent behind the TCPA, “to regulate devices that make automatic calls.” Under Marks, a device that “has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers automatically (even if the system must be turned on or triggered by a person),” constitutes an ATDS.⁵ Although this interpretation appears similar to the TCPA’s language, Marks goes in another direction as it significantly expands the statutory definition to cover devices that can automatically dial stored numbers, rather than merely devices that can call numbers produced by random or sequential generation.

Several courts that have considered this issue since Marks have taken an approach more faithful to the text of the statute, generally requiring satisfaction of both prongs of the TCPA’s statutory definition: (1) the act of storing or producing numbers by using a random or sequential generator; and (2) the act of dialing those numbers.

Other courts try to make sense of the issue

Storing or producing numbers

Several courts have looked more heavily to the first prong of the statutory definition, namely whether the device at issue has the “capacity . . . to store or produce telephone numbers to be called, using a random or sequential number generator.”⁶ A device’s “capacity” continues to play a large role in the analysis, and courts have attempted to apply the TCPA’s text to the various aspects of the device at issue, engaging in arguably a more factually based analysis.

For example, in September 2019, a District of Rhode Island magistrate judge’s recommendation stated that the defendant’s texting system was not an ATDS because it lacked “the capacity to generate numbers to be called randomly or sequentially without human intervention.”⁷ Instead, the texting system required human intervention in uploading and storing numbers, selecting the numbers to be called, typing the message to recipients, and selecting a delivery time, all of which demonstrated that the system did not qualify as an ATDS. In support of its recommendation, the magistrate judge relied on two decisions from the Eastern District of New York and the Southern District of Florida. The courts in those decisions analyzed the same texting system and similarly held that the system was not an ATDS.⁸

Additionally, in October 2019, the District of Maryland in Drake v. Synchrony Bank highlighted a plaintiff’s failure to allege that a “random or sequential number generator” was used to place the purported calls the plaintiff received.⁹ Although the District of Maryland stayed the decision in Drake pending a Fourth Circuit decision in another TCPA matter, the court’s focus on random or sequential generation arguably suggests that use of such technology is a necessary component for a device to constitute an ATDS.

The Northern District of Texas visited this issue in July 2019 and again in September 2019. First, in Adams v. Safe Home Security Inc., the court interpreted the TCPA to require that a “device have the current capacity to store or produce randomly or sequentially generated numbers—not that the calls in question are actually related to that function.”¹⁰ The Adams court, disagreeing with Marks, held that the TCPA does not prohibit predictive dialers that automatically dial any stored numbers; rather, the court looked to whether devices can store or produce numbers that are randomly or sequentially generated. Similarly, in Reed v. Quicken Loans, Inc., the magistrate judge’s recommendation stated that the plaintiff failed to allege that the text messages and phone calls he received were sent using a device that randomly or sequentially generated his phone number.¹¹ Again, how the numbers were produced was an important aspect in both cases.

Lastly, the Middle District of Florida held in September 2019 that devices must have “the capacity to generate random or sequential numbers” in order to qualify as an ATDS.¹² In so holding, the court declined to consider the Congressional intent behind the TCPA, instead finding that the natural reading of the statute requires devices to “possess the capacity (1) to store telephone numbers using a random or sequential number generator or (2) to produce telephone numbers using a random or sequential number generator.” The ability to dial automatically, without more, was not enough for a device to qualify as an ATDS under the statute. Notably, in this court’s view, callers may face liability if they use a device that has the capacity to generate random or sequential numbers, even if the caller does not rely on the device’s ability to do so when placing calls.¹³

Dialing

Other courts have more heavily analyzed the second prong of the statutory definition, namely whether the device has the capacity to dial automatically.

In October 2019, the Central District of California held that a dialing platform that required an agent to click a dialog box to initiate a phone call is not an ATDS.¹⁴ The court applied Marks and held that even though the dialing platform could store a list of numbers to be called, such aspect of the device was not alone sufficient to constitute an ATDS because the device “must be capable of automatic dialing.” The court held that because the system required human intervention to initiate the calls, it did not constitute an ATDS. Although the court looked to Marks’ expanded ATDS definition, the court ultimately reached the same conclusion as other courts that have more closely adhered to the TCPA’s language by requiring a device to be capable of automatic dialing.

In September 2019, the Sixth Circuit in Gary v. TrueBlue, Inc.¹⁵ affirmed the Eastern District of Michigan’s decision granting summary judgment in favor of the defendant. The Eastern District of Michigan had held that the plaintiff failed to show that the defendant’s device could randomly or sequentially dial or text.¹⁶

Also in September 2019, the Southern District of Florida held that to constitute an ATDS, a device “must have the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial the stored numbers.”¹⁷ In that case, the plaintiff alleged that the defendant contacted her using an ATDS, in part, because the defendant’s representative told her that the defendant used an automatic dialer to place the call. The court relied on the TCPA’s statutory definition of ATDS, requiring capacity to store or produce numbers using random or sequential number generation and to dial stored numbers, and found that the representative’s statement did not create a genuine issue of material fact sufficient to defeat summary judgment on the ATDS issue.

Conclusion

Lack of clarity or meaningful guidance on the definition of ATDS continues despite the developments in case law since the FCC’s 2015 Order. In September 2019 in Pine v. A Place for Mom, Inc., a court in the Western District of Washington echoed the sentiment of many companies that have tried to navigate the TCPA’s autodialer definition. In refusing to approve a class action settlement that included “automated telephone dialing system” in the proposed class definition, the court found that the definition referred to an ATDS, “a disputed term of art” between the parties, and therefore “lack[ed] . . . clarity.”¹⁸

As we await the FCC’s highly anticipated ATDS guidance, recent case law demonstrates an effort by the courts to work within the statutory text of the TCPA in defining what devices—and more importantly what aspects of devices—trigger the TCPA’s ATDS definition. Until the FCC issues more formal guidance and clarifies the issue, litigants will continue to look to the courts to provide a standard governing the scope and definition of ATDS, resulting in diverging findings across jurisdictions and a lack of national clarity on this issue. That clarification may come soon enough: in October 2019, a petition for certiorari to the US Supreme Court was filed in another TCPA matter, challenging a Ninth Circuit ATDS decision. Perhaps the Supreme Court will weigh in and fill the gap left by the FCC’s abdication of its responsibility to issue meaningful guidance on this critical issue.

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