In March of this year, the D.C. Circuit published a long awaited opinion in ACA International v. Federal Communications Commission et al., where it set aside portions of the July 2015 Federal Communications Commissions (“FCC”) Order that sought to expand the scope of equipment that falls within the definition of Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). That opinion was summarized in a previous Greenspoon Marder Client Alert. The aftermath has resulted in a major narrowing of the definition of an ATDS back to its statutory definition. Most importantly, like overalls or Ray-Ban Wayfarers, predictive dialers just might be making a comeback as long as they do not randomly or sequentially generate telephone numbers to dial.
Recently, in Pinkus v. Sirius XM Radio, Inc., the Northern District of Illinois (one of the most popular forums for litigating class action TCPA claims), took up the issue of defining what constitutes an ATDS in this post-ACA International world. The plaintiff alleged that Sirius XM Radio, Inc. violated the TCPA by placing calls to his cellphone using a predictive dialer. His claim rested on the premise that as the FCC ruled in its 2003 Order and reaffirmed in the 2008 and 2015 Declaratory Rulings, a predictive dialer qualifies as an ATDS under the TCPA even if it lacks the capacity to generate randomly or sequentially telephone numbers to be dialed.
The Pinkus court, however, disagreed and held that ACA International invalidated all three of the FCC’s Orders interpreting that term. As the D.C. Circuit made clear, because at least some predictive dialers have no capacity to generate random or sequential numbers, the inclusion of all predictive dialers would set “competing interpretations” of an ATDS: “one providing that a device qualifies as an ATDS only if it can generate random or sequential numbers to be dialed, and the other that it can so qualify even if it lacks that capacity.” (internal quotation and brackets omitted). According to the Pinkus court, “the infirmity in the FCC’s reasoning that ACA International identified in invalidating the 2015 Declaratory Ruling” is equally present in the FCC’s two earlier Orders.
Based on this history, the court looked to the statutory definition of an ATDS for application in this case. 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.” Interpreting the statute, the court reasoned that “[g]iven its placement immediately after ‘telephone numbers to be called,’ the phrase ‘using a random or sequential number generator’ is best read to modify ‘telephone numbers to be called,’ describing a quality of the numbers an ATDS must have the capacity to store or produce,” and “the process by which those numbers are generated in the first place.” Therefore, according to Pinkus, “the phrase ‘using a random or sequential number generator’ necessarily conveys that an ATDS must have the capacity to generate telephone phone numbers, either randomly or sequentially, and then to dial those numbers.” This is a plain text meaning of the statute, much narrower than the interpretations previously espoused by the FCC.
Based on this “defining characteristic,” Pinkus was unable to maintain his claim against Sirius XM Radio, Inc. This is a big development in the case law, and other districts appear to be following suit. See, e.g. Gonzalez v. Ocwen Loan Servicing, LLC, No. 5:18-CV-340-OC-30PRL, 2018 WL 4217065, at *6 (M.D. Fla. Sept. 5, 2018) (citing and agreeing with Pinkus). Does this mean businesses should dust off the predictive dialers and start calling? Not necessarily. Some districts have not reached the same conclusion about the scope of ACA International—though their reasoning seems wrong and has been called into question by Pinkus—and others have not addressed the issue. However, based on Pinkus, Gonzalez, and the anticipated cases to follow, it looks like predictive dialers just might become a thing again, so long as they do not randomly or sequentially generate the telephone numbers they dial.