On Tuesday, December 8, 2020, the United States Supreme Court heard oral argument on the question of what type of dialing equipment qualifies as an “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA). The Court granted certiorari to resolve a split among the federal circuit courts of appeals that had construed the meaning of the term. The Ninth Circuit ruling on review had reaffirmed a broad definition of ATDS, but other recent decisions had construed the term more narrowly.Read More
UPDATE: Since our original publication, the Federal Communication Commission issued interpretive guidance on applicability of the emergency purpose exclusion, discussed below.
In the current environment, companies face a need to communicate with customers and patients about the impact that coronavirus (“COVID-19”) will have on their ability to provide goods and services. Companies should be aware of how the Telephone Consumer Protection Act, 42 U.S.C. §. 447 et seq. (the “TCPA”) may impact their calling and texting practices. This alert discusses certain exemptions to the TCPA that may allow companies to continue to contact clients and customers through automated and prerecorded phone calls and texts regarding the COVID-19 outbreak. Businesses can and should continue to contact clients as needed, with carefully tailored messages, to provide necessary updates regarding the COVID-19 pandemic.Read More
On Saturday, March 7, 2020, Governor Andrew Cuomo declared a disaster state of emergency in the State of New York based on the COVID-19 outbreak. One significant consequence is that under a newly-enacted law, unsolicited telemarketing calls to New York residents are now prohibited during a state of emergency.Read More
The Seventh Circuit recently acted to limit the definition of “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). In Gadelhak v. AT&T Services, Inc.,  the court ruled that a dialing system that “neither stores nor produces numbers using a random or sequential number generator,” but rather “exclusively dials numbers stored in a customer database,” “is not an ‘automatic telephone dialing system’ as defined by the Act.” In construing the definition of ATDS narrowly, the Seventh Circuit joined the interpretation adopted by the Third and Eleventh Circuits and rejected the Ninth Circuit’s differing interpretation.
In Gadelhak, the plaintiff asserted that the defendant impermissibly used an automatic telephone dialing system to text him without his prior express consent. The defendant had texted the plaintiff using a system that drew on a database containing the numbers of existing customers. The district court entered summary judgment for the defendant, ruling that the defendant’s system did not constitute an ATDS under the TCPA.
On appeal, the Seventh Circuit first concluded (as the Second and Ninth Circuits had done)  that receipt of unwanted text messages can constitute a concrete injury-in-fact for Article III standing purposes. The Seventh Circuit then proceeded to examine the statutory definition of an ATDS to determine whether the definition encompassed defendant’s system, concluding that it did not. 
The TCPA defines an “automatic telephone dialing system” 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.”  The defendant asserted that as a grammatical matter, the phrase “using a random or sequential number generator” modifies both the terms “store” and “produce.” The defendant then outlined how a different form of equipment from its system could store numbers using a random or sequential number generator such that the defendant’s interpretation would not render the term “store” mere surplusage.  Under the defendant’s interpretation, dialing systems that draw numbers from an existing database neither store nor produce numbers using a random or sequential number generator and thus cannot constitute an ATDS for TCPA purposes. 
After methodically considering the various grammatical interpretations of the definition of “automatic telephone dialing system,” the Seventh Circuit agreed with the defendant, rejecting the Ninth Circuit’s interpretation of ATDS urged by the plaintiff.  The Ninth Circuit had previously read the phrase “using a random or sequential number generator” as modifying only a system’s capacity to “produce” telephone numbers.  But the Seventh Circuit noted that such a broad interpretation would sweep into the definition of ATDS all equipment with the capacity to store and dial telephone numbers, including “[e]very iPhone today [which] has … capacity [to store telephone numbers and call or text them automatically] right out of the box.”  The Seventh Circuit found that this far-reaching result was well outside the intended plain-meaning of the statute.
The emerging trend narrowing the definition of an ATDS follows in the wake the D.C. Circuit’s 2018 decision rejecting the Federal Communications Commission’s broad definition of an ATDS.  The FCC issued notices in May and October 2018 inviting public comment concerning the interpretation of an ATDS but has yet to issue a revised definition.
The Seventh Circuit’s decision that a system which places calls using an existing database of numbers does not qualify as an ATDS will be of assistance to businesses operating within the Seventh Circuit in defending against TCPA lawsuits. And the split between the Third, Seventh, and Eleventh Circuits, on the one hand, and the Ninth Circuit, on the other, may eventually spur the Supreme Court to provide its own interpretation of the definition of ATDS.
NOTES — F.3d —, 2020 WL 808270, at *1 (7th Cir. Feb. 19, 2020).  Melito v. Experian Mktg. Sols., Inc., 923 F.3d 85, 92-93 (2d Cir.); Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1042-43 (9th Cir. 2017).  Gadelhak, 2020 WL 808270, at *3.  47 U.S.C. § 227(a)(1).  Gadelhak, 2020 WL 808270, at *4-5.  Id. at *4.  See Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1050 (9th Cir. 2018), cert. dismissed, 139 S. Ct. 1289, 203 L. Ed. 2d 300 (2019).  See id.; Gadelhak, 2020 WL 808270, at *5-6. The Ninth Circuit was recently asked to reconsider the Marks decision to bring its interpretation of an ATDS under the TCPA into accord with the Third, Seventh, and Eleventh Circuits. See Lamkin v. Portfolio Recovery Assocs., No. 19-16947 (9th Cir.).  Gadelhak, 2020 WL 808270, at *6.  ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018).
Last week, in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., Case No. 17-1705 (2019), the Supreme Court declined to decide the level of deference that courts must afford the Federal Communications Commission (the “FCC”), finding that the answer may depend on resolution of two preliminary issues that had not been decided by the lower courts. The matter has been remanded to the Court of Appeals for the Fourth Circuit. In declining to reach the issues presented, the Supreme Court leaves open the crucial question of whether courts are bound by the FCC’s interpretation of the Telephone Consumer Protection Act (“TCPA”).Read More
Sen. John Thune (R-SD), member of the Senate Commerce Committee and chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet, and Sen. Ed Markey (D-MA), also a member of the Commerce Committee and author of the Telephone Consumer Protection Act (“TCPA”), recently reintroduced the Telephone Robocall Abuse Criminal Enforcement and Deterrence (“TRACED”) Act, S. 151. The TRACED Act is identical to the version as originally introduced in November 2018 (and previously discussed here). The bill seeks to prevent illegal robocall scams and other intentional violations of the TCPA.Read More
The Senate Commerce Committee and House Energy and Commerce Committee held back-to-back hearings late last month on abusive robocalls and caller ID spoofing and how to combat them. Committee members and witnesses both highlighted the fact that robocalls and ID spoofing have “exploded in recent years” and several noted that “over 3 billion calls were placed [in March] alone” and “about a quarter of these calls are scam calls.” Further, because the technology used to place robocalls and to spoof are evolving technically, the number of calls continues to grow. There was broad agreement on both committees that consumer education, aggressive Federal Communications Commission (“FCC”) and Federal Trade Commission (“FTC”) enforcement actions, and the use of new ID verification and robocall-blocking technologies are important tools in combating these calls. However, Republicans and Democrats and business and consumer witnesses are generally split on the question of whether legitimate businesses are part of the problem and whether the Telephone Consumer Protection Act (“TCPA”) needs to be reformed or conversely expanded through new legislation and regulations. This focus on abusive/illegal robocalls and split on the TCPA presents both risks and potential opportunities for businesses and, consequently, requires close watch.
In a recent decision, the U.S. District Court for the Northern District of Illinois found that the host of an automobile website did not violate the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), by providing its users a platform to send automated text messages regarding car listings. In Serban v. CarGurus, Inc., Case No. 1:16-cv-02531 (N.D. Ill. Mar. 12, 2018), a user of the defendant’s website mistyped her telephone number when attempting to send herself a car listing. In doing so, the user performed a multi-step process—including selecting the “Send to Phone” option, entering the telephone number, and clicking a “Send” button—to generate a text message automatically created by CarGurus based on the car selected. As a result of the mistyped telephone number, the text message was transmitted to the plaintiff rather than the user.
A federal district court recently dismissed a putative Telephone Consumer Protection Act (“TCPA”) class action against CVS Health Corporation (“CVS”) Lindenbaum v. CVS Health Corp., Case No. 17-CV-1863 (N.D. Ohio Jan. 22, 2018), because the reminder calls to renew prescriptions fell within the “emergency purposes” exception of the TCPA.
Plaintiff Shari Lindenbaum alleged that CVS made at least six prerecorded prescription reminder calls to her cellphone in early 2017. She claimed that she received these calls because she had a “recycled” cell phone number — a number that once was used by an individual from whom the caller obtained consent but had since been reassigned to a different individual — and that she had never provided “prior express written consent” to receive the calls. CVS asked the court to dismiss Lindenbaum’s claims, primarily arguing that the calls fell within the TCPA exception for “emergency purposes.”