Written by Ernesto Mendieta and Nicole Su

Twenty days after the Supreme Court granted petition for writ of certiorari in Facebook v. Duguid to review the question of what constitutes an ATDS under the TCPA, the Sixth Circuit issued its own opinion addressing this very question. In Allan v. Penn. Higher Educ. Assistance Agency, Case No. 19-2043 (6th Circ. July 29, 2020), the Sixth Circuit held that “the plain text of [47 U.S.C.] §227, read in its entirety, makes it clear that devices that dial from a stored list of numbers” qualify as an ATDS. In so holding, the Sixth Circuit aligned itself with the Second and Ninth Circuits’ broad interpretation of what constitutes an ATDS, making three circuit courts to now adopt this broad interpretation under which devices that automatically dial from lists of numbers meet the statutory definition.

Like the Ninth Circuit’s Marks decision, the Allan court first found that the D.C. Circuit in ACA Int’l v. FCC, 855 F.3d 687 (D.C. Circ. 2018) set aside the FCC’s treatment of the definition of an ATDS as a whole.

Thus, the Court then turned to the statutory definition of an ATDS. The Court favored the reading of the statute so that the phrase “using a random or sequential number generator” only modified the word “produce”:

An ATDS is “equipment which has the capacity—

(A) to store [telephone numbers to be called];

or produce telephone numbers to be called, using a random or sequential number generator; and

(B) to dial such numbers.”
227(a)(1)

Like the Second Circuit, the Allan court found that the clause requiring use of “a random or sequential number generator” modifies only the verb “produce,” not the word “store.” The court concluded this reading of the statute was the most logical because otherwise the word “store” would be superfluous. And like the Ninth Circuit, the Allan court also looked to the statutory history and the other provisions of the autodialer ban to guide it in its interpretation of the statute.

The court noted that the TCPA’s autodialer ban contains an exception for calls “made with prior consent of the called party” that when analyzed in context, clarifies any ambiguity. 47 U.S.C. §227(b)(1)(A). The Court said that in order to give their express consent prior to receiving a call, the called party must give their number to the entity making the call. Thus, the entity making the calls would be dialing from a stored list of numbers – not randomly or sequentially generating numbers to dial. Therefore, because the TCPA provides for an exception for calls made to known, consenting recipients, then the autodialer ban only makes sense if it applies to a system that stored numbers to dial.

Moreover, the court noted that in 2015, Congress amended the autodialer ban to permit calls made to collect on a debt owed or guaranteed by the U.S. government. While this exception was struck down by the Supreme Court in Barr v. AAPC, -- S. Ct. --, 2020 WL 3633780 (July 6, 2020) the Allan court argued that “the now-defunct government-debt-collection exception implies that the autodialer ban covered stored-number systems.”

To support its conclusion, the Court resorted to other interpretative tools, including the administrative and legislative history of the statute, and practical effects of its interpretation. The Court first said that Congress enacted the TCPA to combat pervasive telemarketing, and to crack down on automated calls themselves, not just the technology making them possible at the time. Further, the Allan court suggested that the common concern that its broad interpretation of an ATDS would extend to everyday use of smartphones is “unfounded.” It reasoned that the D.C. Circuit in ACA Int’l v. FCC rejected the FCC’s interpretation of capacity to include “potential functionalities” so “that means the use of a cell phone would be subject to a fine under the TCPA only if it actually is used as an ATDS.”

Thus, the Sixth Circuit and its lower courts are now bound by this definition of an ATDS:

We accordingly read § 227(a)(1) as follows:

An ATDS is “equipment which has the capacity—
(A) to store [telephone numbers to be called];
or produce telephone numbers to be called, using a random or sequential number generator; and
(B) to dial such numbers.”

Although the Circuit Split regarding what constitutes an ATDS will be reviewed next summer by the Supreme Court, Courts will continue to hear TCPA cases where this issue comes up. These interim rulings have the potential for swaying the Supreme Court when it considers the interpretation of the statutory ATDS definition in Facebook, making stays of cases in District Courts involving the same issue pending the outcome of Facebook all the more important.


 

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About The Author

Meet the TCPA Defense Force. A team of experience professionals that focus like a laser on the TCPA and provide comprehensive services that solve a number of TCPA problems. The TCPA Defense Force aims to mitigate TCPA exposure for both creative marketing teams and conscientious companies that engage their customers through telemarketing.