The Telephone Consumer Protection Act (“TCPA”) was passed in 1991 with the Congressional intent of curbing unwanted telemarketing calls. As enacted, the TCPA placed restrictions on the use of automated telephone dialing systems (an “ATDS”). The TCPA defined an ATDS as:

  1. The term ‘automatic telephone dialing system’ means equipment which has the capacity –
  1. to store or produce telephone numbers to be called, using a random or sequential number generator; and
  2. to dial such numbers.

Following the passage of the TCPA, the Federal Communications Commission (“FCC”) issued a series of rulings that sought to further define an ATDS. But, in 2018, the D.C. Circuit vacated the FCC’s interpretation of what sort of device qualified as an ATDS under the TCPA. Therefore, the Ninth Circuit has had to “begin anew to consider the definition of an ATDS under the TCPA.” It did so in a September 20, 2018 opinion involving a lawsuit brought by Jordan Marks against Crunch San Diego (popularly known as Crunch Fitness).

Crunch Fitness used a web-based marketing platform designed to send promotional text messages to a list of stored numbers – the Textmunication system. Using the Textmunication system, Crunch Fitness captured phone numbers in one of three ways: (1) an operator of the system manually entered a phone number into the system; (2) a current or potential customer may respond to a marketing campaign with a text; or (3) a customer provides a phone number by filling out a consent form on Crunch Fitness’s website.

When Crunch Fitness wanted to send a text message, an employee logged into the Textmunication system, selected the phone numbers to use, generated the content of the text, and selected a date and time for the message to be sent. Thereafter, the Textmunication system would automatically send those messages.

After conducting a statutory analysis of the TCPA, the Ninth Circuit held that “the statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator,’ but also includes devices with the capacity to dial stored numbers automatically. Accordingly, we read § 227(a)(1) to provide that the term automatic telephone dialing system means equipment which 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.” The Ninth Circuit also held that an automatic system need not be fully automatic; it may operate with some human intervention.

To be clear, the Ninth Circuit’s interpretation is an expansive definition of an ATDS and may require companies who use text or phone marketing to re-assess whether their practices comply with the TCPA.