Tag: TCPA

1
Supreme Court Agrees to Review Growing Circuit Split on Definition of ATDS
2
Supreme Court Declares TCPA Government-Debt Exception Unconstitutional but Severs Provision to Preserve Remainder of TCPA
3
The FCC Clarifies the Definition of ATDS
4
Second Circuit Goes Against the Tide; Adopts Broad Definition of Autodialer
5
COVID-19: UPDATED Emergency and Healthcare Calls and Texts
6
COVID-19: NY State of Emergency Imposes Ban on Telemarketing Calls
7
Strength in Numbers: The Seventh Circuit Joins the Third and Eleventh Circuits in Limiting the Definition of an Automatic Telephone Dialing System under the TCPA
8
Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders
9
Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams
10
District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit

Supreme Court Agrees to Review Growing Circuit Split on Definition of ATDS

By Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie II, Molly K. McGinley, and Hollee M. Boudreau

On Thursday, the United States Supreme Court agreed to review 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’s review arises from a challenge to the Ninth Circuit’s broad definition of ATDS.  The plain language of the TCPA states that an ATDS is “equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.”  47 U.S.C. § 227(a)(1).  Since the D.C. Circuit abrogated the Federal Communications Commission (FCC) rulings construing that language, see ACA International v. FCC, 885 F.3d 687, 701 (D.C. Cir. 2018), a split has emerged among the federal circuit courts that have examined the definition.  The Ninth and Second Circuits have held that a dialing system need only have the capacity to “store numbers to be called” and “to dial such numbers automatically” to constitute an ATDS.  See Duran v. La Boom Disco, Inc., 955 F.3d 279, 283-84 (2d Cir. 2020); Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052-53 (9th Cir. 2018).  The Third, Seventh, and Eleventh Circuits, on the other hand, have reined in the definition of ATDS.  These courts have held that a system cannot constitute an ATDS where it lacks the capacity either to (1) store telephone numbers to be called using a random or sequential number generator, or (2) produce telephone numbers to be called using a random or sequential number generator.  See Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 464, 469 (7th Cir. 2020); Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301, 1310 (11th Cir. 2020); Dominguez v. Yahoo, Inc., 894 F.3d 116, 119-21 (3d Cir. 2018).   

The Supreme Court’s decision to review the definition of ATDS arises from a Ninth Circuit ruling that overturned the dismissal of a putative class action lawsuit in which the consumer claimed to have received text messages on his cell phone from an ATDS in violation of the TCPA.  The Ninth Circuit reaffirmed its broad interpretation of an ATDS and concluded that the consumer’s allegations that the disputed text messages were sent from equipment that automatically dialed his cell phone number from a database with a stored list of numbers were sufficient to plead the use of an ATDS.  The defendant’s petition for writ of certiorari asked the Court to resolve two questions—(1) “Whether the TCPA’s prohibition on calls made using an ATDS is an unconstitutional restriction of speech;” and (2) “Whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’”  The Supreme Court declined to review the first question, having issued an opinion on a related question this term discussed here.  The Court did agree to review the second question, and its decision has the potential to resolve the circuit split as to the meaning of ATDS.

Supreme Court Declares TCPA Government-Debt Exception Unconstitutional but Severs Provision to Preserve Remainder of TCPA

By Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie II, Molly K. McGinley, and Hollee M. Boudreau

On Monday, the United States Supreme Court issued a decision upholding the broad prohibition against autodialed calls to cells phones under the Telephone Consumer Protection Act (TCPA) but ruling that a 2015 exception, which had allowed autodialed calls for the purposes of collecting federally-backed debts such as student loans and mortgage debts, violated the First Amendment.  Thus, the Court held that the exception is invalid and must be severed from the statute.  Under Section 227(b)(1)(A)(iii) of the TCPA, it is unlawful to “make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice” to a cell phone.  See 47 U.S.C. § 227(b)(1)(A)(iii).  In 2015, Congress passed an exception that permitted autodialed calls “made solely to collect a debt owed to or guaranteed by the United States.”  Id.  A number of political and nonprofit organizations, seeking to make autodialed calls to cell phones for political purposes, filed suit seeking to invalidate Section 227(b)(1)(A)(iii) in its entirety on the basis that the 2015 exception impermissibly favored government debt-collection speech over political and other speech in violation of the First Amendment of the Constitution.  The plaintiffs reasoned that the 2015 exception “undermine[d] the credibility” of the government’s interest in consumer privacy and that if Congress no longer had a genuine interest in consumer privacy, then the underlying 1991 robocall re­striction is no longer justified and is thus unconstitu­tional.

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The FCC Clarifies the Definition of ATDS

By Andrew C. Glass, Gregory N. Blase, Joseph C. Wylie II, Molly K. McGinley, and Hollee M. Boudreau

The Federal Communications Commission (FCC) recently issued a declaratory ruling on a petition seeking clarification of the definition of an “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.  In its order, the FCC ruled that a text messaging platform that requires a person to actively and manually dial a recipient’s number and transmit those messages, and that lacks the capacity to transmit more than one message without a person manually dialing each number, is not an ATDS under the TCPA.  The FCC concluded such a system does not meet the definition of ATDS because it does not store or produce numbers to be called using a random or sequential number generator and dial such numbers automatically.  See FCC Order ¶¶ 3, 8–12.  Although not expressly stated, the FCC ruling is consistent with prior decisions of the Third, Seventh, and Eleventh Circuit Courts of Appeals, discussed here, specifically in that curating a list of numbers, and then dialing the numbers from that list, is not sufficient to establish the use of an ATDS under the TCPA.  The FCC order may present businesses facing TCPA lawsuits with another basis to challenge the Ninth and Second Circuit Courts of Appeals’ decisions that construed the definition of ATDS more broadly than Third, Seventh, and Eleventh Circuit’s definition.

Second Circuit Goes Against the Tide; Adopts Broad Definition of Autodialer

By Joseph C. Wylie IIMolly K. McGinley, and Sarah K. Bauman

In Duran v. La Boom Disco, Inc., the Second Circuit adopted a broad definition of an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  The Second Circuit joined the Ninth Circuit, further deepening the circuit split on the definition of ATDS with the Third, Seventh, and Eleventh Circuit.

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COVID-19: UPDATED Emergency and Healthcare Calls and Texts

Authors: Joseph C. Wylie IIMolly K. McGinley, and Nicole C. Mueller

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.

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COVID-19: NY State of Emergency Imposes Ban on Telemarketing Calls

By Joseph C. Wylie IIMolly K. McGinley, and Nicole C. Mueller

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.

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Strength in Numbers: The Seventh Circuit Joins the Third and Eleventh Circuits in Limiting the Definition of an Automatic Telephone Dialing System under the TCPA

By Andrew C. GlassGregory N. BlaseJoseph C. Wylie IIMolly K. McGinleyHollee M. Boudreau, and Adam R.D. Paine

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., [1] 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.

ANALYSIS

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) [2] 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. [3]

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.” [4] 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. [5] 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. [6]

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. [7] 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. [8] 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.” [9] 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. [10] 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.

CONCLUSION

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

[1] — F.3d —, 2020 WL 808270, at *1 (7th Cir. Feb. 19, 2020).

[2] 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).

[3] Gadelhak, 2020 WL 808270, at *3.

[4] 47 U.S.C. § 227(a)(1).

[5] Gadelhak, 2020 WL 808270, at *4-5.

[6] Id. at *4.

[7] 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).

[8] 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.).

[9] Gadelhak, 2020 WL 808270, at *6.

[10] ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018).

Supreme Court Declines to Define Scope of Deference Courts Should Apply to FCC TCPA Orders

Authors: Joseph C. Wylie, Molly K. McGinley, Nicole C. Mueller

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”).

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Attorneys General Express Widespread Support for TRACED Act Reintroduced in the Senate to Stop Illegal Robocall Scams

By Pamela Garvie, Amy Carnevale, Andrew Glass, Gregory Blase, Joseph Wylie, Molly McGinley, and Hollee Watson

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.

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District Court Adopts Narrow ATDS Interpretation, Dismisses TCPA Suit

By Joseph C. Wylie II, Molly K. McGinley, and Lexi D. Bond

A district court in Illinois recently dismissed a lawsuit against Yahoo!, Inc. (“Yahoo”) alleging violations of the Telephone Consumer Protection Act (“TCPA”), reversing its previous decision denying summary judgment. In Johnson v. Yahoo! Inc., Case No. 14-cv-2028 (N.D. Ill. Nov. 29, 2018), the court granted Yahoo’s motion for reconsideration based on recent interpretations of the definition of an automatic telephone dialing system (“ATDS”) under the TCPA, particularly the decision in ACA Int’l v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018) (previously discussed here).  In its ruling, the district court rejected prior Federal Communication Commission (“FCC”) pronouncements and adopted a narrow interpretation of ATDS, holding that only a system that actually dials randomly or sequentially generated numbers can be an ATDS.

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