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UNBELIEVABLE – Sixth Circuit Court of Appeals Follows Marks: Re-Shapes TCPA ATDS Landscape at The Worst Possible Time

The score is now 3-2 in favor of the bad guys. We’ll get to that.

Just last week I urged everyone to stay TCPA ATDS cases in “yellow” jurisdictions for fear of creating more negative case law heading into the critical Supreme Court ATDS appeal.The occasion then was a crippling ruling at the district court level within the Fourth Circuit’s footprint. But this one hurts even more.

Today the Sixth Circuit Court of Appeals ruled (for the first time) that a predictive dialer system is an automatic telephone dialing system (“ATDS”) because the Telephone Consumer Protection Act’s ATDS definition includes all dialers that call from a list, not just those that call using a random or sequential number generator. The case is Allan v. Pa. Higher Ed. Assist. Agency. Case No. 19-2043 (6th Cir. 2020)  and it can be found here.  

For the uninitiated, the TCPA’s ATDS definition includes: “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.”

Rather plainly the statutory definition requires the use of a random or sequential number generator to trigger statutory coverage– you’ll see the words right there in the very precise and specific definition.

But words, schmurds.

Many courts have picked apart the definition in an effort to expand the restrictions of the TCPA–which purportedly, but not really, prevents robocalls– in an effort to apply the statute to technology that was never intended to be covered when the statute was drafted. Add Allan to that list.

The analysis in Allan is similar to Duran. The Court latches on to the problem with the word “store” appearing in the statutory definition and the supposed superfluity of the phrase if random and sequential generation is required:

“[I]t is hard to see how a number generator could be used to ‘store’ telephone numbers,” even if it can “as a technical matter.”

From this thread the Sixth Circuit panel unravels the definition completely.

Common sense suggests that any number that is stored using a number-generator is also produced by the same number-generator; otherwise, it is not clear what ‘storing’ using a number-generator could mean.

Let me help. The statute was phrased as it was to prevent a defendant from producing numbers using one machine and then storing them in a dialer that calls randomly. The statute uses an “or” to clarify that a device need not do both— otherwise a caller could thrwart the statute by splitting up the functionalities into two systems. Yet the requirement of randomness (should) remain the lynchpin of the definition. So the word “storage” is not superfluous at all, it clarifies that random numbers stored in a separate system that dials them after their production by random number generator are subject to the statute. But… oh well.

The Allan court does not pick up on this rather obvious (IMO) explanation and, instead, pretends it has no choice but to read the big clear words “random and sequential number generator” out of the statute.

Interestingly, the Sixth Circuit panel suggests its adoption of Marks will not expand the reach of the TCPA to smartphones because the statute is only covered when an ATDS’ automatic capabilities are actually in use. Remarkably, therefore, the Sixth Circuit reads the word “capacity” out of the statute entirely– a determination it suggests is compelled by ACA Int’l:

[T]he D.C. Circuit held that a device is an ATDS only if it actually is used in the way prescribed by statute. Id. That means that use of a cell phone would be subject to a fine under the TCPA only if it actually is used as an ATDS.

Huh?

The ACA Int’l opinion did a lot of things, but it certainly did not hold that the use of automatic functionalities is a necessary trigger for the TCPA to apply. Yes, it raised that issue–and Chief Judge Edwards seemed particularly convinced at oral argument that only the use of automated features can trigger the statute–but that is not what the Court actually held. So Allan’s use of ACA Int’l to serve as a brake for the expansive read its adopts is questionable, at best.

Still Alan is clear that non-automatic or “reply only” responses that leverage ATDS technology would not trigger the statute because they, apparently, do not make “use” of automatic dialing technology:

Voice activation software simply allows a person to dictate the recipient, message, and command to send rather than type the instructions and message. It is not an “automatic” process. And automatic reply messages are only sent in reply. Plaintiffs would have a tough go of showing that they did not consent to receiving a message after they themselves initiated contact.

This is all brand new and really tricky stuff to apply. There will be plenty of time (and opportunity) to try to decipher precisely how the Sixth Circuit ‘s definition works between now and next May, however, when we expect a ruling from the Supremes. Until then, folks within the Sixth Circuit footprint must work with his as their new ATDS definition:

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.”

What. A. Mess.

Notably, the case was argued by Jeff Lohman–yes, that Jeff Lohman--for the Plaintiff and in a jurisdiction that had previously came very very close to following the statutory ATDS definition previously. Yet defeat was aptly snatched from the jaws of victory.

It must be remarked that Allan likely completes the reversal of the TCPA’s ATDS saga post-ACA Int’l. While just a few months ago there was a clear majority position developing requiring application of the statutory definition— with Allan now decide the score is Three Circuit Courts of Appeals following Marks and only Two following the statutory approach. This seemed absolutely unthinkable following Gadelhak, but Duran opened the door and now Allan appears to have sealed a new TCPA ATDS paradigm–right when the Supreme Court is set to review the statute.

And while SCOTUS is surely not just going to count hands in deciding the issue, the fact that three Circuits now prefer one ATDS definition to the two that prefer the other (proper) definition, there can be no question that the Marks approach is no longer an outlier–it is now the lead contender going into the final briefing showdown next month.

My goodness. This is a big one folks. Give me a call to discuss.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 211

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About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

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