On October 3, the Federal Communications Commission (FCC) instituted a brief, immediate, supplemental comment period as it seeks to resolve an issue at the heart of thousands of lawsuits filed under the Telephone Consumer Protection Act (TCPA) over the last several years, namely what constitutes an “automatic telephone dialing system” (ATDS). As highlighted by a recent 9th Circuit decision, courts have been unable to agree on the proper definition of an ATDS. The FCC will now attempt to resolve the issue in an expected upcoming order, following its supplemental comment period, ending on October 17.
The definition of an ATDS (or “autodialer”) under the TCPA hinges on the statute’s use of the word “capacity.” To fall within the TCPA’s definition of autodialer, equipment need only have 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.” 47 U.S.C. § 227(a)(1). In its July 2015 Omnibus TCPA Declaratory Ruling and Order (2015 TCPA Order), the FCC expounded on the broad concept of capacity by opining that an autodialer is distinguished from other equipment solely by its capability to store or produce random or sequential telephone numbers and subsequently dial said numbers. (See our earlier alert on the 2015 TCPA Order here.) In other words, the 2015 TCPA Order held that if a machine has the capacity to act as an ATDS, it is an ATDS, even if it is not actually used as one.
Nearly three years later, in March 2018, the U.S. Court of Appeals for the DC Circuit rejected the FCC’s definition as overly broad and “eye-popping,” holding that the 2015 TCPA Order was arbitrary and capricious. ACA International v. FCC, Case No. 15-1211, 2018 WL 1352922 (D.C. Cir. Mar. 16, 2018). But the DC Circuit did not offer an alternative definition and remanded the issue to the FCC. (See our alert on the DC Circuit’s decision here.)
To aid its inquiry and determination on a legally supportable and rational definition, the FCC instituted an open comment period in May 2018. (See our alert on the open comment period here.) Unfortunately, while the FCC considers the issue, courts and litigants are left without clear guidance on the proper definition of an ATDS. In the interim, courts sought to fill that void, with mixed results.
Off the hook: Ongoing divergence illustrated by Marks and Glasser Most notably, the month of September saw conflicting decisions on the definition of ATDS from the 9th Circuit and the Middle District of Florida.
In Marks v. Crunch San Diego, LLC, Case No. 14-56834, 2018 WL 4495553 (9th Cir. Sept. 20, 2018), the 9th Circuit adopted an expansive autodialer interpretation. The defendant, a gym, utilized a “Textmunication” system to send text messages to potential and current gym members. The Textmunication system enabled the gym to send text messages to telephone numbers that were stored either via: (1) manual entry by a Textmunication operator; (2) a current or potential customer’s text response to a marketing campaign; or (3) a customer’s response to a consent form located on the gym’s website. As described by the 9th Circuit, the gym’s employees would send promotional text messages by “log[ging] into the Textmunication system, select[ing] the recipient phone numbers, generat[ing] the content of the message, and select[ing] the date and time for the message to be sent.”
The gym utilized the Textmunication system to send three promotional text messages to the plaintiff, prompting the plaintiff’s filing of a class action suit based on allegations that the gym’s use of the Textmunication system violated the TCPA ATDS protections. The district court granted the defendant’s summary judgment motion by finding that the Textmunication system did not constitute an autodialer because it was not equipped with a random or sequential number generator as required by the plain language of the statute. The 9th Circuit reversed. Notwithstanding the plain language of the statute, the 9th Circuit viewed the ATDS statutory definition as “ambiguous on its face,” the court adopted a broad autodialer definition by relying upon the TCPA’s context and structure as well as the Congressional intent to “regulate devices that make automatic calls.” In so doing, the court found that an autodialer includes devices that can call telephone numbers created by a “random or sequential number generator” (quoting 47 U.S.C. § 227(a)(1)) and devices that can automatically dial from a stored list of telephone numbers.
The court also addressed the element of human intervention, stating that “[c]ommon sense indicates that human intervention of some sort is required before an autodialer can begin making calls . . . Congress was clearly aware that, at the very least, a human has to flip the switch on an ATDS.” The Marks decision is therefore at odds with the DC Circuit’s rejection of an overly broad definition of an ATDS, and is instead more aligned with the overturned 2015 TCPA Order.
Conversely, in Glasser v. Hilton Grand Vacations Co., Case No. 8:16-cv-952-JDW-AAS, 2018 WL 4565751 (M.D. Fla. Sept. 24, 2018), the Middle District of Florida found that human intervention is a dispositive factor in defining an autodialer. The defendant, a travel company, utilized the “Intelligent Mobile Connect” system to make promotional telephone calls to the plaintiff. In using the Intelligent Mobile Connect system, the defendant’s employees manually made telephone calls by selecting a “Make Call” button on the system’s computer screen. The Glasser court granted the defendant’s summary judgment motion and found that “human intervention was required before a cell number could be dialed by Defendant’s system.” The crucial inquiry for the court was whether the system could dial telephone numbers without the assistance of human intervention. Unlike in Marks, the court in Glasser found that the necessity of human intervention dispositive and disqualified the telephone system from constituting an autodialer.
The disarray on this issue among the courts is not limited to Marks and Glasser. See, e.g., Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018) (granting a summary judgment motion in favor of defendant where an Email SMS Service delivered text messages only to manually entered telephone numbers); Fleming v. Associated Credit Services, Inc., Case No. 16-3382 (KM) (MAH), 2018 WL 4562460 (D. N.J. Sept. 21, 2018) (granting a summary judgment motion in favor of defendant as to plaintiff’s TCPA claim where a predictive dialer system utilized a “clicker agent” to dial telephone numbers from a number list “not randomly or sequentially generated” at the time of its compilation); Maddox v. CBE Group, Inc., Case No. 1:17-CV-1909-SCJ, 2018 WL 2327037 (N.D. Ga. May 22, 2018) (holding that a Manual Clicker Application requiring defendant’s agents to initiate telephone calls via a manual click did not constitute an ATDS due to human intervention). In light of these and other diverging court decisions, the FCC opted to add a supplemental period to its earlier open comment period.
The FCC’s supplemental comment period The FCC’s newest request cites Marks, and points out that the 9th Circuit’s definition of an ATDS is directly at odds with the D.C. Circuit’s reversal of the 2015 TCPA Order. The FCC now seeks comments on the following questions.
- “To the extent the statutory definition is ambiguous, how should the Commission exercise its discretion to interpret such ambiguities here?
- Does the interpretation of the Marks court mean that any device with the capacity to dial stored numbers automatically is an automatic telephone dialing system?
- What devices have the capacity to store numbers?
- Do smartphones have such capacity?
- What devices that can store numbers also have the capacity to automatically dial such numbers?
- Do smartphones have such capacity?
- In short, how should the Commission address these two court holdings?
- We also seek comment on any other issues addressed in the Marks decision that the Commission should consider in interpreting the definition of an “automatic telephone dialing system.”
The comment period deadline of October 17 is followed by a reply period ending on October 24.
Conclusion The courts have been struggling with defining what constitutes an autodialer under the TCPA for years. The FCC is expected, after the conclusion of the comment period, to release a new interpretation that will hopefully add clarity to this key issue that determines the scope of the TCPA in many cases. Until then, defendants in TCPA litigation are subject to varying interpretations of the definition, depending on the circuit or district court in which they are sued. Unless and until the FCC provides a narrower definition than that used by the 9th Circuit, use of the kind of technology described above to contact consumers will continue to carry a risk of TCPA liability.