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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
Posted in Policy & Regulation, Telecoms & Broadband Mark BrennanArpan Sura

Second Circuit Panel Sides with Ninth Circuit on What Qualifies as an Autodialer

A recent decision by the U.S. Court of Appeals for the Second Circuit in Duran v. La Boom Disco, Inc. has interrupted the emerging consensus around the definition of “autodialer” in the Telephone Consumer Protection Act (TCPA). On April 7, 2020, a Second Circuit panel joined a Ninth Circuit panel in adopting a broad reading of the statutory definition of “automatic telephone dialing system” (ATDS), commonly referred to as an autodialer. The Duran decision also rejected the reasoning in opinions issued by panels in the Seventh and Eleventh Circuits earlier this year, which deepens the split between the Courts of Appeals and increases the pressure on the Federal Communications Commission, Congress, and even the U.S. Supreme Court to provide clarity on what constitutes an autodialer under the TCPA.

Background

Duran, the plaintiff, alleged that La Boom Disco sent him hundreds of text messages without his consent using an autodialer. La Boom acknowledged that it sent the messages but claimed that the systems it used to send the messages were not autodialers because, among other things, they required too much human intervention and were not automatic. The U.S. District Court for the Eastern District of New York heard the case and agreed with La Boom that the technology systems at issue were not autodialers.

The Duran Opinion

On appeal, the Second Circuit panel considered the question of what qualifies a dialing system as an autodialer. 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 district court found that LaBoom’s dialing systems met the first requirement of the definition but failed to satisfy the second element because they lacked the capacity to dial numbers automatically. Reviewing the court’s conclusions de novo, the Second Circuit panel disagreed and vacated the judgment.

The La Boom court reasoned that equipment can qualify as an ATDS if it: (1) makes calls from stored lists, even lists initially generated by humans; or (2) makes calls to numbers produced using a random- or sequential-number-generator. In adopting this interpretation, the Second Circuit departed from recent decisions by an Eleventh Circuit panel in Glasser v. Hilton Grand Vacations Company, LLC and a Seventh Circuit panel in Gadelhak v. AT&T Services, Inc. Both of those decisions concluded that an autodialer must use a random or sequential number generator to either store or produce numbers and that systems that rely on stored calling lists do not qualify as autodialers. The Second Circuit panel rejected that interpretation and reasoned that the inclusion of the federal-debts exemption in the TCPA supports a broader reading of autodialer. To service its debts, the government necessarily must call a human-generated list of phone numbers. If the definition of autodialer did not cover such activity, the panel concluded, the federal-debts exemption would make little sense. Thus, the term autodialer must include equipment that dials from stored lists. The panel also reasoned that an interpretation of ATDS that did not cover dialing from a stored list would render the word “stored” superfluous under the statute.

Addressing the second element of the autodialer definition, the La Boom court said that human intervention must involve more than “clicking send.” Sufficient human intervention must involve “the actual or constructive inputting of numbers to make an individual telephone call or to send an individual text message.” According to the court, the action involved in the case was more akin to initiating a process than actually dialing or inputting numbers. In so holding, the La Boom court sought to distinguish the D.C. Circuit’s opinion in ACA International v. FCC, which foreclosed any reading of ATDS that would encompass a conventional smartphone.

The Duran decision deepens the split between the Courts of Appeals, with the Second and Ninth Circuit panels adopting a broad reading and the Seventh and Eleventh Circuit panels choosing a more measured approach. The split increases the pressure on the Federal Communications Commission, Congress, and even the U.S. Supreme Court to provide clarity on what qualifies as an autodialer under the TCPA.

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Our TCPA Working Group brings together more than 25 attorneys in our litigation, communications, commercial, and privacy practice areas. We provide regular TCPA counseling to clients from a broad range of industries, including technology, healthcare, communications, transportation, and financial services. We have secured dismissals and nominal settlements for clients in TCPA actions and have worked with the FCC to clarify rules addressing a number of key TCPA issues. We also have significant experience in TCPA appeals.