by: Brian C. Schaller

The what is and what isn't an autodialer saga continues with the Seventh Circuit's ruling yesterday in Ali Gadelhak, on behalf of himself & all others similarly situated, Plaintiff-Appellant, v. AT&T Services, Inc. that a system that "pulls and dials numbers from an existing database of customers rather than randomly generating them" is not an autodialer under the Telephone Consumer Protection Act (TCPA), and that "the capacity to generate random or sequential numbers is necessary to the statutory definition." This narrow definition of what constitutes an autodialer comes only a few weeks after the Eleventh Circuit also interpreted a narrow definition in Glasser v. Hilton Grand Vacations. Although the interpretation of the statute was different from the Seventh Circuit, the Eleventh Circuit also found that to be an autodialer, a call must be made from a randomly or sequentially generated number. Both of these rulings add to the years-long and hotly-disputed debate over the definition of autodialer. And, as a threshold element to maintain a TCPA claim, the interpretation of an autodialer can have a serious influence on the outcome of a case. TCPA violations carry statutory damages of $500-$1,500 per violation (per call or text!), making it a very attractive claim for class action plaintiffs' counsel, who can hit companies unaware that they have made a technical violation of the TCPA with hundreds of thousands, if not millions, of dollars in potential damages.

We covered the history of the autodialer definition (also known as automatic telephone dialing system) in our previous blog post after the Ninth Circuit's Jordan Marks v. Crunch San Diego, LLC, decision broadened the scope of an autodialer to include "devices with the capacity to dial stored numbers automatically." Marks followed the DC Circuit in ACA International v. Federal Communications Commission, which narrowed the definition of autodialer by vacating a broad definition adopted by the FCC in its 2015 TCPA Omnibus Declaratory Ruling and Order that an autodialer includes equipment/software that has the future capacity to dial randomly or sequentially (See our 2015 post). The Second and Third Circuits also applied a more narrow definition in deciding in defendants' favor (see King v. Time Warner Cable Inc., and Dominguez ex rel. Himself v. Yahoo, Inc.).

Simply put, the autodialer definition was broadened by the FCC, narrowed in ACA, broadened in Marks, and narrowed in Domingues, King, Glasser and now Ali Gadelhak.

So, what does this mean for businesses?

If your business is located in the Seventh, Eleventh, DC, Second or Third Circuits (under a narrower definition of autodialer) and is calling phones located in those districts, there is less of a chance that a court would deem the caller to be using an autodialer, and so less risk of litigation for calling/texting.

If located in or calling the Ninth Circuit (which includes California) then under the broader definition ("devices with the capacity to dial stored numbers automatically.") almost any regular phone (short of a classic rotary phone) could theoretically come within the definition of an autodialer by virtue of being able to store numbers.

As for those located in/calling the other Circuits that have not weighed in, they are not yet bound by a Circuit court ruling and so litigation would be very unpredictable as the judges could entertain persuasive authority from the other Circuits and/or come out with their own interpretation/analysis.

We are living under a true Circuit split, which may be decided, or at least clarified, when the Supreme Court rules on a TCPA case out of the Fourth Circuit (which is not specific to the autodialer definition and is discussed in more detail below).

The human touch . . .

Human intervention when dialing may be key. The Eleventh Circuit's analysis in Glasser considered the fact that although the defendant's system utilized a set of sales-agent created search parameters to automatically select from a list of records, in order to actually make the calls employees reviewed the numbers and pressed a button labeled "make call", so "the system require[d] a human’s involvement to do everything except press the numbers on a phone” and "[a]n employee’s choice initiates every call."

Note that the Ninth Circuit (Marks) rejected the human intervention argument, but, in Marks, a human didn't actually press a button for each text made and would, instead, set a time for the texts to be automatically sent. When the defendant sent a text message, the employee logged into the system, selected the phone numbers from a list, created the text message, and selected when the message would be sent. The system would then automatically send the texts at the appointed time. The Court found that "even though humans, rather than machines, are needed to add phone numbers" to the platform, it has the automatic dialing function necessary to qualify as an autodialer.

So, the takeaway for now appears to be that if you want to limit the likelihood that a court would determine a system is an autodialer, it would not hurt to include more human intervention, human choice, and human physical contact, especially at the point where an individual call is made.

But wait . . . .

Things could change. We are waiting for the FCC to come back with its new interpretation/definition of autodialer, which would give courts some further guidance. (Note that the FCC called for public comments on this issue in October 2018, but no word yet on when/whether the FCC will weigh in).

Most importantly, we are anticipating the Supreme Court to weigh in this session with its certiorari review of a TCPA debt collection case. In Am. Ass'n of Political Consultants, Inc. v. Fed. Commc'ns Comm'n the Fourth Circuit sided with the plaintiff, ruling that a government-back debt-collection exemption to the autodialer restriction passed by Congress in 2015 that authorized "many of the intrusive calls that the automated call ban was enacted to prohibit" "constitutes an unconstitutional content-based restriction on speech, and therefore violates the Free Speech Clause." This arguably broadened the definition of autodialer by eliminating one of its exceptions. The question presented by the Petitioners is "[w]hether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute" and the Respondents' question presented is "[w]hether the TCPA’s automated-call prohibition is an unconstitutional content-based restriction of speech, and if so whether the Fourth Circuit erred in addressing the constitutional violation by broadening the prohibition to abridge more speech."

We don't know whether the Supreme Court will only address the constitutionality of the exception, the constitutionality of the entire autodialer restriction, or, possibly, the TCPA as a whole. But, no matter what the decision, the landscape of TCPA litigation will surely be effected.

Bottom line . . .

Two narrow definitions of autodialer are now added to the already increasing number of Circuit courts that are agreeing with TCPA defendants. These narrower definitions are favorable for businesses that are located in and calling within these Circuits. But as a whole, the patchwork of different and sometimes conflicting case law interpreting the TCPA continues to create a hotbed for uncertain litigation across the country. In addition, there may be other provisions of the TCPA that plaintiffs’ counsel begin to utilize if the autodialer definition is significantly narrowed. Our recommendation continues to be that all businesses thoroughly assess their calling and text message programs for potential liabilities, comply fully with the TCPA, and be conservative with regard to “grey” issues wherever possible.