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Another District Court Within Seventh Circuit Holds ATDS Requires Random or Sequential Number Generation

The lower courts in the Seventh Circuit have been very active when it comes to the definition of an ATDS after ACA International v. FCC, 885 F.3d 687, 691 (D.C. Cir. 2018).  The vast majority of the opinions coming out of the lower courts in the Seventh Circuit have adopted the statutory definition of an ATDS, requiring a device to have the capacity to generate telephone numbers randomly or sequentially.

Earlier this week, a District Court in the Northern District of Illinois again found that random or sequential number generation is required for a device to meet the legal definition of an ATDS.

In Smith v. Premier Dermatology, Case No. 17 C 3712, 2019 WL 4261245, at *5 (N.D. Ill. Sept. 9, 2019), the Court held that “an ATDS is a device that (1) stores or produces telephone numbers that (2) were randomly or sequentially generated and (3) dials them automatically.”

In reaching this conclusion, the Court first examined the effect of ACA International v. FCC on the FCC’s 2015 and prior orders interpreting the TCPA’s ATDS definition to include predictive dialers.  The Court agreed with the Ninth Circuit’s opinion in Marks v. Crunch, 904 F.3d 1041, 1045 (9th Cir. 2018) that when the D.C. Circuit rejected the FCC’s 2015 ruling on ATDS, it also necessarily set aside the prior FCC orders on this subject.

Finding that ACA International set aside the FCC’s interpretation of an ATDS, the Court then turned to the statutory definition of an ATDS, and parted ways with the Marks court from there. The Court found that the plain meaning of the statutory language defines “an ATDS as a device that is capable of using randomly or sequentially generated numbers.”  The Court also noted that it is the “present capacity,” not the “potential capacity” of the device that matters.  As such, the Court held that because Defendant’s system did not have the present capacity to randomly or sequentially generate numbers to dial, it did not qualify as an ATDS. 

While this is yet another well-reasoned decision from a lower court in the Seventh Circuit, we are all eagerly awaiting the Seventh Circuit’s opinion in Gadelhak v. AT&T Services, Inc., Case No 19-1738. Gadelhak is seeking reversal from the Seventh Circuit of the District Court’s decision finding that an ATDS requires random or sequential number generation. It remains to be seen how the Seventh Circuit will rule, but the outcome of the Gadelhak case will likely have a significant impact on this issue considering the sheer number of ATDS rulings from the lower courts within the Seventh Circuit. 

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume IX, Number 255


About this Author

Nicole Su, Womble Dickinson, Business litigation lawyer

Nicole focuses her business litigation practice on commercial and financial services cases, with a particular emphasis on Telephone Consumer Protection Act (TCPA). She is part of a nationally-recognized team that is at the forefront of the TCPA space.  Along with the team, Nicole brings the experience and capability to vigorously defend financial institutions in TCPA actions nationwide. 

Nicole is dedicated to achieving cutting-edge results for her clients.  She uses her in-depth knowledge of the TCPA to come up with creative solutions for difficult problems.