Deepening the Divide: Will the Sixth Circuit’s Expansive Reading of the ATDS Definition Survive?

The issue of what exactly is an autodialer, subject to the restrictions of the Telephone Consumer Protection Act (“TCPA”), may eventually be resolved. But for now, the outlook is much like the long-ago Brooklyn Dodger’s chance of winning the World Series: “Wait ‘Til Next Year.” On July 29, 2020, a divided, 2-1 panel in the Sixth Circuit issued its opinion in Allan v. Pennsylvania Higher Education Assistance Agency, deepening the circuit split over the breadth of the TCPA. Specifically, the Sixth Circuit held that any device that dials from a stored list of numbers is sufficient to constitute an “automatic telephone dialing system” (“ATDS” or “autodialer”). This decision comes on the heels of the Supreme Court granting certiorari in Facebook, Inc. v. Duguid, setting the stage for the high court to, hopefully, not only resolve the split among the circuits, but produce a definition of an autodialer that permits the responsible and efficient generation of calls for a broad array of legitimate reasons—indeed in some cases emergency. (Interestingly, in Allan, the defendant opposed the plaintiffs’ motion to stay the appeal pending Duguid. That’s likely because the defendant had previously prevailed on the ATDS issue in the Eleventh Circuit a few months earlier in a consolidated appeal.)

In Allan, the plaintiffs received hundreds of unwanted calls and automated voice messages regarding student loan debt after they had requested to no longer be called; many of these calls delivered a prerecorded message as well. Plaintiffs sued alleging that they did not consent to the unwanted calls; the district court granted summary judgment to the plaintiffs. On appeal, the Sixth Circuit addressed whether the Defendant’s calling platform constituted an ATDS where it created a calling list based on stored numbers and placed calls, connecting recipients to operators.

The Sixth Circuit’s opinion hinged on the perceived ambiguity in the TCPA that defines an 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). The Sixth Circuit (self-admittedly) rejected the grammatically correct reading of the ATDS definition adopted by the Seventh, Eleventh, and Third Circuits—that a platform must have the capacity to store and produce numbers using a random or sequential generator and to dial such numbers—because it renders the use of “store” superfluous. The Sixth Circuit also found the reading that “using a random or sequential number generator” applying only to “produce” was similarly unworkable. Ultimately, the Sixth Circuit agreed with the Ninth Circuit’s and the Second Circuit’s approach, looking to the structure and context of the TCPA to guide its interpretation, and concluding that a dialing platform that automatically dials from a stored list of telephone numbers, regardless of how that list is created, is an ATDS.

Allan also is notable in two other respects. First, the defendant chose not to argue the level of human involvement that was necessary to place the calls in question. And, second, the Sixth Circuit adopted an “actual use” test, i.e., it is the actual use of a platform to autodial that matters, not the “capacity” to place automated calls. In that regard, the Sixth Circuit’s decision is an outlier.

With the Allan decision, the scene is set for Supreme Court to determine the fate of the ATDS definition in Facebook, Inc. v. Duguid, No. 19-511 (cert. granted July 9, 2020). Facebook sought certiorari on two questions, but the Supreme Court granted certiorari on only one: whether the definition of an ATDS encompasses any device that can “store” and “automatically dial” telephone numbers, even if it “does not use a random or sequential number generator.” Specifically, when petitioning for certiorari, Facebook argued that the Ninth Circuit’s holding—deeming every smartphone in the country an ATDS—is wildly overbroad and wrong as a matter of basic statutory construction, as it is contrary to the D.C. Circuit’s opinion in ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018) and other circuits, which interpreted the ATDS definition to be more narrow in scope. Interestingly, Duguid contends that the Ninth Circuit’s reading of an ATDS does not conflict with the Third Circuit’s decision in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018) or ACA International.

Given the ambiguity in the statute that is detailed in Allan, clarity will certainly be welcome to those who operate in the space. As the Supreme Court has yet to set oral argument in Duguid, stay tuned here as the case unfolds. It is always dangerous to read the tea leaves of a Supreme Court decision to accept a case. Nonetheless, it is safe to conclude that at least four of the Justices are not comfortable with how the Ninth, Second, and now Sixth Circuits have approached the issue and, perhaps more significantly, have grown weary of waiting for the end of the FCC’s alleged “ongoing evaluation” of the issue.

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