The Sixth Circuit Limits the Meaning of ATDS Under the TCPA
Recently, the Sixth Circuit in Gary v. Trueblue, Inc., No. 18-2281, 2019 U.S. App. LEXIS 26959 (6th Cir. Sep. 5, 2019), weighed in on the meaning of Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). The TCPA generally prohibits calls and text messages to cell phones using an ATDS without prior express consent and imposes a statutory penalty of $500 per call or text in violation, or up to $1,500 per call/text for a knowing or willful violation. On a class action basis covering all calls/texts sent over four years, the potential liability can be crushing.
The Sixth Circuit in Trueblue is the latest court to opine in the ongoing battle over the interpretation of ATDS. The TCPA defines ATDS 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.” 47 U.S.C. § 227(a)(1).
That same year, the Ninth Circuit in Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), ruled that the text messaging system at issue qualified as an ATDS, as it was designed to automatically send text messages from a stored list of telephone numbers. The Ninth Circuit concluded that the TCPA’s definition of ATDS, includes not only devices with the capacity to call numbers produced by a “random or sequential number generator,” but also includes systems, which unlike a manual click-to-dial/text system, has the capacity to automatically dial phone numbers from a stored list.
In contrast to Marks, the district court in Gary v. Trueblue, Inc., 346 F.Supp.3d 1040 (E.D. Mich. 2018), concluded that to be considered an ATDS, a device must have the capacity to store or produce phone numbers using a random or sequential number generator, regardless of any capacity to automatically dial numbers from a stored list.
The Trueblue plaintiff sued a staffing company for sending him text messages about potential job opportunities after he allegedly revoked consent. The plaintiff asserted that the text messages were sent using an ATDS. However, the defendant offered evidence that its text messaging system lacked the capacity to randomly or sequentially dial or text potential workers. The plaintiff, on the other hand, offered a “series of documents he obtained from the Internet” to show that the defendant’s system combined with its third party SMS provider had the requisite capacity.
The district court was not persuaded by the plaintiff’s Internet findings, as it did not prove the defendant’s system had the capacity to randomly or sequentially dial or text phone numbers. The district court also rejected the plaintiff’s argument that the defendant’s system was an ATDS because it could operate without human intervention. The court explained, “the TCPA does not prohibit the use of devices with automated functions.” “Instead, the statute requires a showing that the system has the capacity to randomly or sequentially dial or text phone numbers.” The plaintiff had not made such a showing. For this and other reasons, the district court granted the defendant’s motion for summary judgment.
On appeal, the plaintiff argued that the district court erred by not considering the FCC’s pre-2015 orders with respect to the definition of an ATDS. The plaintiff insisted that under those orders, the defendant’s system qualified as an ATDS. The Sixth Circuit, however, rejected the plaintiff’s argument, noting that “[e]ven if these orders define an ATDS as broadly as [the plaintiff] suggests, [plaintiff] has not explained how [defendant’s] system functions in way that would satisfy this definition.” The Sixth Circuit also rejected the plaintiff’s argument that the defendant’s use of a web-based system was enough to qualify it as an ATDS, as the plaintiff’s “unhelpful, general internet articles” “did not create a genuine dispute about the matter.” Accordingly, the Sixth Circuit affirmed the district court’s judgment.
What does this mean? Although the Sixth Circuit did not explicitly hold that telephone equipment must have the capacity to randomly or sequentially generate phone numbers to qualify as an ATDS, its tacit approval of the district court’s ATDS definition will likely have an impact on cases deciding this issue, especially outside of the Ninth Circuit. But, as always, to avoid having to engage in this ongoing dispute, always make sure you have sufficient prior express consent under the TCPA before making any type of automated call or text message.