While courts remain split on the scope and function of an “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA), 2019 began with a well-reasoned decision limiting the scope of an ATDS and another dismissing a plaintiff’s TCPA claim based on his failure to adequately plead the defendant’s use of an ATDS in the subject communications. 

I.             Thompson-Harbach v. USAA Federal Savings Bank, 2019 WL 148711 (N.D. Iowa Jan. 1, 2019): 

In Thompson, the plaintiff alleged that the defendant violated the TCPA by placing at least 71 “collection calls to Plaintiff” after he requested that the defendant cease such communications. The parties filed cross-motions for summary judgment on the plaintiff’s TCPA claims. It was undisputed that the defendant used an Aspect Dialer to initiate the calls, which allowed a user to manually dial the telephone number, or automatically dial the stored numbers without the need for human intervention. The Aspect Dialer could only call the specific telephone numbers on a particular campaign and could not independently generate random telephone numbers for dialing. Similarly, the collection company used by the defendant utilized an Interaction Dialer, which the plaintiff’s expert admitted could only dial the specific telephone numbers provided and could not generate random or sequential lists for dialing. While the parties agreed on which devices the defendant and its collection company used to place the subject calls, they disagreed on whether these devices constituted an ATDS under the TCPA. 

The court began its analysis by examining the Federal Communications Commission’s (FCC) prior rulings on the scope and definition of an ATDS. The court noted that the FCC’s prior rulings in 2003, 2008, and 2015 held that the term ATDS included “predictive dialers” that had the capacity “to store or produce numbers and dial those numbers at random, in sequential order, or from a database of numbers.” Id. at *6. The court held that the FCC’s prior rulings rejected the argument that a “predictive dialer meets the definition of autodialer only when it randomly or sequentially generates telephone numbers, not when it dials numbers from customer telephone lists.” Id.

Notwithstanding the FCC’s prior rulings, the court held that the D.C. Circuit Court of Appeals’ recent decision in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018), invalidated the FCC’s prior rulings, which defined a “predictive dialer as an ATDS, even when the predictive dialer lacks the capacity to generate phone numbers randomly or sequentially and to then dial them.” Id. at *10 (quoting Roark v. Credit One Bank, N.A., 2019 WL 5921652, at *2-3 (D. Minn. Nov. 13, 2018))(citations omitted). The court found that ACA International’s decision held that the 2015 Ruling failed to satisfy “’the requirement for reasoned decision making’ due to the agency’s lack of clarity about which functions qualify a device as an autodialer,” and that this rationale applies with equal force to the FCC’s 2003 and 2008 rulings regarding this issue. Id. at *10-11. 

Next, the court analyzed whether the equipment at issue fit the statutory definition of an ATDS, which is described 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.” Id. at *12 (citing 47 U.S.C. §227(a)(1)). After analyzing the statutory definition’s construction, the court held that a device qualifies as an ATDS under the statute “only when it is capable of randomly or sequentially producing, or randomly or sequentially storing telephone numbers.” Id. In applying this definition, the court found that the equipment used by the defendant does not qualify as an ATDS because it simply called the plaintiff using equipment which had stored and called the number the plaintiff gave them. Id. at 14. The court granted summary judgment in favor of the defendant. 

While it granted summary judgment in favor of the defendant, the court went on to consider whether the defendant properly withdrew his consent under the TCPA. The Online Agreement at issue between the parties stated that to revoke consent to be contacted, a party may edit their profile by removing numbers on which they did not want to be called. Id. *16. The court found that “parties may, by mutual agreement, limit the means by which a consumer can withdraw consent to be called on the telephone, so long as the means contracted are reasonable.” Id. at *15. However, the court found that the Second Circuit Court of Appeals “went too far in Reyes when it concluded that a company could effectively defeat the TCPA by including a contractual provision barring a consumer from ever withdrawing consent.” Id. at *16 (citing Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51 (2d Cir. 2016)). The court found that reading the Online Agreement as a whole, the removal of a customer’s number from their profile was one way to revoke consent, but not the only way. The court held that the plaintiff was therefore free to withdraw his consent by making an oral request. 

II.            Bodie v. Lyft, 2019 WL 258050 (S.D. Cal. Jan. 16, 2019)

In Bodie, the plaintiff alleged that the defendant violated the TCPA when it sent him two unsolicited text messages to his cellular phone. Id. at *1. The defendant moved to dismiss the plaintiff’s complaint on the basis that (i) the plaintiff’s allegations regarding the defendant’s use of an ATDS are conclusory and (ii) the plaintiff filed to plausibly allege that the defendant sent the subject texts or had an agency relationship with the sender.

The court recognized that “courts in this district have taken two approaches when facing a motion to dismiss on the grounds that the allegations of use of an ATDS are insufficient” under the TCPA. Id. at *2. The first approach permits a plaintiff to make minimal allegations regarding the use of an ATDS at the complaint stage, “permitting discovery to proceed on the issue of [an] ATDS, because the information is in the sole possession of the defendant.” Id. (citations omitted). The second requires factual allegations beyond the statutory language “which may lead to the inference that an ATDS was used.” Id. (citations omitted).  

The court found that under either approach, the plaintiff failed to sufficiently allege that an ATDS was used in this matter. Id. The plaintiff’s complaint merely “parroted” the statutory definition of an ATDS, which the court held “falls short of what is required for plausibility.” Id. (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The court held that complaint was “devoid of any facts that could support a reasonable inference that Lyft used an ATDS to send the subject text messages” and granted the defendant’s motion to dismiss for failing to sufficiently allege the use of an ATDS under the TCPA. Id

III.           Conclusion

The concept of what constitutes an ATDS under the TCPA continues to be inconsistently interpreted in courts across the country. While these decisions represent a step in the right direction for defendants, they also highlight the importance of staying up to date with the recent decisions in this area and understanding how the developing case law affects potential strategy considerations from one jurisdiction to the next.  Please contact Ryan DiClemente, Esq. for more information on TCPA compliance and litigation strategies.