Businesses and other stakeholders continue to grapple with what constitutes an “automatic telephone dialing system” (ATDS or autodialer) as it is defined in the Telephone Consumer Protection Act (TCPA). As noted previously, the Federal Communications Commission’s (FCC) July 2015 Order did little to elucidate the murky and ambiguous boundaries of what qualifies as an ATDS. All eyes are now on the US Court of Appeals for the DC Circuit as the judges of that court decide a challenge to the FCC’s July 2015 Order, alleging, in part, that the definition of autodialer is unwieldy and impractical. While businesses and the legal community await the court’s guidance, a number of lower courts have tried to apply common sense principles to determine what types of technology fall within the ambit of the TCPA, focusing on, for example, whether and to what degree human intervention is required to make a call. Nonetheless, lingering uncertainty over the definition of an ATDS continues to plague businesses making good faith efforts to comply with the TCPA.

Court Challenge to the FCC’s Definition of Autodialer

The TCPA restricts the use of autodialers (or ATDSs), which are defined by the statute 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 In July 2015, the FCC issued an Omnibus Order interpreting certain provisions of the TCPA, including the term autodialer. Taken literally, the description of autodialer in the Order could include technology with the mere capacity or capability alone to store or produce, and dial random or sequential numbers, without any showing that such functionality had been utilized or even could have been utilized at the time the calls were made. The FCC’s guidance included the less than helpful statement that while “it might be theoretically possible to modify a rotary-dial phone to such an extreme that it would satisfy the definition of ‘autodialer,’…such a possibility is too attenuated for us to find that a rotary-dial phone has the requisite ‘capacity’ and therefore is an autodialer.” Such comparisons with rotary phones are not meaningful and provide no practical guidance. More than a dozen petitions challenging the Order were filed in the days and weeks following the FCC’s Order.

In October 2016, the DC Circuit heard oral argument in ACA International v. FCC, Case No. 15-1211 (D.C. Cir. Oct. 19, 2016), on the petitions challenging the FCC’s July 2015 TCPA Order. During argument, the court placed special emphasis on the autodialer definition promulgated by the FCC, specifically the agency’s view that an ATDS includes equipment that has the potential “capacity” to dial random or sequential numbers even if the “capacity” at issue has been deactivated. Petitioners argued that such an expanded definition of an ATDS would lead to absurd results and encompass almost any technology involving a computer.

The FCC argued in response that a standard narrower than the one adopted in the July 2015 Order would set an impractically difficult pleading standard for potential plaintiffs since they would have to plead not only that a call was placed using equipment with autodialing functionality but also that the functionality was specifically used for the call. At the argument, the court seemed skeptical of the FCC’s position, however, noting that requiring the plaintiffs to allege use of autodialer functionality was not unreasonable since that is what the statute prohibits.

A decision by the DC Circuit is expected in the coming months, and a decision in favor of the petitioners could significantly narrow the types of technology that fall under the autodialer definition.

Recent Court Decisions

In the wake of the FCC’s July 2015 Order, courts interpreting the TCPA (and parties looking to comply with it) have been working to apply the FCC’s rules to the reality of modern technology. Many courts, viewing the issue practically, have focused on human intervention as the touchstone for whether a piece of technology qualifies as an ATDS. Other courts have applied the FCC’s interpretation of what is considered an autodialer but have done so largely based on the facts of particular cases.

The need for human intervention was a primary factor for the court in Pozo v. Stellar Recovery Collection Agency, Inc., Case No. 15-cv-929, 2016 WL 7851415 (M.D. Fla. Sept. 2, 2016), in determining that certain technology did not constitute an ATDS. The defendant, a collection agency, called the plaintiff intending to collect a debt. The defendant used a manual call system called Human Call Initiator (HCI) from LiveVox, a third-party vendor. To initiate a call, an employee needed to click a dialogue box confirming that a call should be made to a phone number. HCI was one of the human-initiated systems offered by LiveVox, which also made available systems with autodialing functionality. HCI was stored on a separate server from the other LiveVox systems and used its own unique software and hardware. The plaintiff filed the lawsuit claiming that the call made with HCI violated the TCPA. The magistrate judge, who the parties agreed would hear the case, ordered summary judgment in favor of the defendant on the TCPA claim, noting that a key feature of an ATDS is “the capacity to dial numbers without human intervention,” and “dialing systems which require an agent to manually initiate calls do not qualify as autodialers under the TCPA.” The court also explained that because HCI was housed on a server separate from LiveVox’s autodialing offerings, the plaintiff could not argue that HCI had the potential capability (through modification) to become an autodialer based on LiveVox’s other available technologies.

The Pozo court referenced Strauss v. CBE Group, Inc., Case No. 15-62026-CIV, 2016 WL 1273913 (S.D. Fla. Mar. 28, 2016), where the defendant, CBE Group, employed a Manual Clicker Application (MCA) to initiate calls. The system alone could not initiate the call until the agent pointed to and clicked a dialogue box, which triggered the call. The MCA also allowed the employee to view ongoing call activity and decide, based on that information, when to place the call to ensure that operators would be available to handle the call. The court granted judgment in favor of the defendant because the need for human intervention took the system outside the definition of autodialer.

Other courts have analyzed the element of human intervention on a more granular basis. See, e.g., Espejo v. Santander, Case No. 11 C 8987 (N.D. Ill. Oct. 14, 2016) (denying motion to dismiss a TCPA claim where the only human intervention required was an agent logging on to a calling system to signal his or her availability and the system made the calls otherwise unaided); Sherman v. Yahoo!, 150 F. Supp. 3d 1213 (S.D. Cal. 2015) (denying a summary judgment motion in favor of defendant where an automatic welcome message was triggered by a Yahoo! user sending an instant message by computer to a mobile phone number not in Yahoo!’s database); Keim v. ADF Midatlantic, LLC., Case No. 12-80577-CIV, 2015 WL 11713593 (S.D. Fla. Nov. 9, 2015) (denying motion to dismiss where human intervention was limited to people texting friends’ numbers to defendant, who then sent automated text message advertisements to those numbers months later).

Conclusion

The lingering uncertainty, among both the courts and businesses striving to comply with the TCPA, over the meaning of ATDS, and with it the broader issue of the scope of the TCPA, creates compliance burdens on companies looking to communicate with their customers without exposing themselves to liability under the TCPA. The expected decision by the DC Circuit in the appellate challenge to the FCC’s July 2015 Order has the potential to clarify this fundamental question affecting the scope of the TCPA.