October 14, 2019

October 14, 2019

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District Court in the Fifth Circuit Holds that Predictive Dialers are Outside the Scope of the TCPA

Last week, the Northern District of Texas gave us our first case out of the Fifth Circuit addressing the definition of an ATDS (Automatic Telephone Dialing System) in the post-ACA International era.

In Adams v. Safe Home Security, Inc. No. 3:18-CV-03098-M, 2019 WL 3428776, at *4 (N.D. Tex. July 30, 2019), the Court held that to qualify as an ATDS a device must be able to store and produce telephone numbers randomly and sequentially and that “predictive dialers… fall outside the definition of an ATDS.”   

In reaching this conclusion, the Court undertook a two-step analysis.

First, it found that “the D.C. Circuit’s ruling [in ACA Int'l v. Fed. Commc'ns Comm'n, 885 F.3d 687, 692 (D.C. Cir. 2018)] invalidating the 2015 Order inherently overturned the same reasoning (that a predictive dialer qualified as an ATDS) in the 2003 and 2008 orders.”  Id. at *2

After finding that the FCC’s 2003 and 2008 orders were no longer valid, the Court then “independently interpret[ed] the statute to determine the scope of the definition of an ATDS and whether it applies to predictive dialers.”  Id.

In step two, the Court reviewed the statutory definition of an ATDS, and concluded that “an ATDS must both store and produce numbers that are randomly and sequentially generated and not merely store any numbers.” Id.  Notably, the Court expressly rejected the Ninth Circuit’s Marksdecision – which held that an ATDS covers devices that called from a list of stored numbers. 

The Court further supported its conclusion by looking back to the FCC’s 1992 order which held that the “TCPA did not apply to speed dialing or call forwarding ‘because the numbers called are not generated in a random or sequential fashion.’” Id. at *4. The Court also looked at the TCPA’s legislative history which permits the FCC to allow businesses to call its customers with whom they have an “established business relationship.” Pointing to these facts, the Court reasoned that it was unlikely Congress was attempting to regulate devices that have the ability to store customers’ telephone numbers.

With the Adams case, we now have at least one district court in each of the eleven circuits addressing the definition of an ATDS after ACA Int’l in some form.  It remains to be seen if any other Circuit Courts besides the Ninth Circuit will address this issue. 

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About this Author

Nicole Su, Womble Dickinson, Business litigation lawyer
Associate

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.

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