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Court Rejects Theory in TCPA Case That SQL Server’s Supposed Capacity to Generate Numbers Makes Dialing System an ATDS

In the face of mounting rulings from intermediate and lower courts requiring an ATDS to have the capacity to randomly or sequentially generate numbers (and thereby ruling out virtually all modern day list-based dialing devices), plaintiffs have tried to get creative.  The most frequently pushed theory is that a dialing system should be treated as an ATDS because either some external database from which a dialer pulls pre-existing numbers to be called, or the operating system on which the dialer operates can generate numbers in this fashion. Of course, this sort of logic means that pretty much any piece of tech that can make a phone call (including the laptop I’m typing this article on, and the phone in my pocket) is an ATDS.  One court recently examined, and rejected this whacky theory.

In Panzarella v. Navient Solutions, No. 18-3735, 2020 U.S. Dist. LEXIS 104746 (E.D. Pa. June 15, 2020), the Plaintiff argued that the Defendant’s Genesys dialing system was an ATDS because the numbers it called were stored in a database on a SQL server, which was a “necessary component” of the dialing system, and which could “generate random or sequential number tables.”

The court held there was no dispute that the dialing system used by Defendant did not have the capacity to store or produce telephone numbers to be called using a random or sequential number generator.  The court reasoned that external components, such as a SQL server used to sort and store numbers associated with customer accounts, are distinct from the dialing system itself.  As such, even assuming the external component could generate numbers, it would not mean that the dialing system had the “capacity” to perform this statutorily required function.

In its reasoning, the court pointed to the concern expressed by the D.C. Circuit in ACA International v. FCC of the “eye-popping sweep” of the FCC’s now-invalid interpretation of an ATDS.  The court stated that “[t]he widespread use of the Microsoft SQL servers . . . motivates the Court to carefully consider whether it should be regarded as part of the same system,” and criticized the Plaintiff’s theory as “risk[ing] a far-reaching and overly-broad interpretation of systems that may be considered ATDSs.”  The court also noted some other key considerations: “[t]he database server being housed in separate hardware suggests that it should be considered a distinct system,” as well as the need of the dialing system to “import” information from the SQL database.

Outside of the circuits such as the Ninth and Second, these sorts of theories are becoming one of the last bastions of plaintiffs seeking lucrative statutory damages under the TCPA.  To put it mildly, the theories are a stretch, and hopefully will continue to be rejected by courts.  

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 169

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About this Author

Artin Betpera, Class action litigation lawyer, Womble
Partner

Artin is a partner in the firm’s business litigation practice group.  Precise and analytic, Artin brings over a decade of experience to bear on complex litigation problems.

Artin adeptly manages significant volumes of litigation for some of the country’s largest banks and financial institutions, never losing sight of providing an exceptional level of service to his clients.  He has been a dedicated financial services litigator since starting the practice of law at ground-zero of the financial crisis, affording him with an unparalleled depth of...

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