On January 27, 2020, a federal court of appeals issued a significant decision interpreting the Telephone Consumer Protection Act (commonly referred to as the “TCPA”) in a way that limits the expansive potential liability companies face under the statute. In Glasser v. Hilton Grand Vacations Company, the U.S. Court of Appeals for the Eleventh Circuit reached three significant conclusions:

• The court adopted a narrow definition of what constitutes an “autodialer” under the TCPA, rejecting the view that a telephone system that dials numbers from a predetermined list is an autodialer under the TCPA.
• The court also held that “clicker agent” systems — where an employee “clicks” a number on a computer application and the system then dials the number and connects the call to another employee — require human intervention to make calls and thus do not constitute an autodialer.
• However, the court noted that use of an artificial or prerecorded voice (without the consent of the called party) is an independent basis for liability under the TCPA, meaning the definition of an autodialer is not relevant to a TCPA analysis when the basis for liability is artificial or prerecorded voice calls.

The decision creates a precedent split with the Ninth Circuit Court of Appeals, which had embraced a more expansive definition of an autodialer. This split increases the likelihood that the Supreme Court will review this issue, but, in the meantime, the Eleventh Circuit’s decision will limit potential TCPA liability for cases in its jurisdiction.

In Glasser, a consumer and a student loan borrower filed separate TCPA lawsuits against a timeshare marketer and a student loan servicer alleging that the defendants violated the TCPA by making calls to their cell phones with autodialers and without prior consent. Both trial courts granted summary judgment in opinions that examined the TCPA’s definition of an autodialer, and the Eleventh Circuit Court of Appeals consolidated the cases on appeal.

In its opinion, the court first addressed the TCPA’s definition of an autodialer: “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). “Remember these words,” the court instructed before diving into an intricate grammatical analysis of the relevant language.

The question, as the court identified, is whether “using a random or sequential number generator” modifies both “to store” and “[to] produce,” or just one of those verbs. The defendants argued that it modifies both. In other words, to be an autodialer, the telephone equipment must (1) store numbers using a random or sequential number generator and dial them or (2) produce numbers using a random or sequential number generator and dial them.

The plaintiffs argued that the phrase “using a random or sequential number generator” only modified “[to] produce.” Thus, telephone equipment falls under the TCPA’s autodialer definition if it (1) stores numbers and dials them or (2) produces numbers using a random or sequential number generator and dials them. This interpretation is consistent with the Ninth Circuit’s view as expressed in Marks v. Crunch San Diego, LLC.

While lamenting that the TCPA’s text lacks clarity, the court endorsed the “better option” — that the phrase “using a random or sequential number generator” modifies both verbs, meaning that use of a random or sequential number generator is required for telephone equipment to qualify as an autodialer under the TCPA. Practically speaking, this decision means that telephone equipment that relies on a pre-set list of telephone numbers to generate calls is not an autodialer under the Eleventh Circuit’s holding — which encompasses the majority of modern systems. Instead, only telephone equipment that generates telephone numbers to be called randomly or by sequence would be considered autodialers for purposes of the TCPA, at least in the Eleventh Circuit.

In reaching this decision, the court noted that, while the FCC had adopted the more expansive definition, the D.C. Circuit’s decision in ACA International v. FCC (which we previously blogged about) “wiped the slate clean” and set aside the FCC’s interpretation. The Eleventh Circuit also noted that the Ninth Circuit’s expansive definition of an autodialer in Marks conflicts with the canons of statutory construction, so much so that the Ninth Circuit’s view amounts to “surgery” rather than interpretation.

The Eleventh Circuit’s opinion also briefly touched on the human intervention exception to the TCPA’s definition of autodialer. The opinion follows other courts that have found that “clicker agent” systems — where an employee “clicks” a number on a computer application and the system then dials the number and connects the call to another employee — require sufficient human intervention so as to take them out of the definition of an autodialer.

Lastly, the Eleventh Circuit noted that using an artificial voice or recordings to call someone without their consent is an independent basis for liability under the TCPA, notwithstanding the definition of an autodialer. In other words, TCPA liability can arise simply by making a call using an artificial or recorded voice message without consent of the called party, even if the telephone system used does not otherwise qualify under the now narrower definition of an autodialer.

The Glasser opinion is likely to have a significant impact in the Eleventh Circuit’s jurisdiction —federal courts in Alabama, Georgia, and Florida — and may reduce the volume of TCPA cases in these states. However, companies operating nationwide should continue to evaluate their TCPA compliance based on the more expansive definition of an autodialer used in other jurisdictions such as the Ninth Circuit, which includes Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington. Most of the other federal courts of appeal have yet to issue a determinative decision. It is notable, however, that the opinion was authored by Sixth Circuit Court of Appeals Judge Jeff Sutton, who was sitting with the Eleventh Circuit panel by invitation. Judge Sutton’s opinion may hint the direction that the Sixth Circuit could take on this issue.

Given the circuit-split created by the opinion, both the FCC and the Supreme Court may now feel more urgency to act. And, perhaps Congress will eventually feel the need to rewrite the statute that was originally enacted in 1991 — long before cell phones became ubiquitous.