Have recent judicial decisions brought much needed sanity to the discussion of what constitutes an “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”)? The short answer is: maybe.
How did we get to this point? The TCPA limits the ability to call anyone in the United States using an ATDS. The statute defines that term to include “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). In recent years, companies have trended away from using dialers that dial numbers randomly or in sequential order, in favor of predictive dialers or manual dialers (i.e., those that require an agent to dial the called number by hand).
In 2003, the Federal Communications Commission, relying on the “has the capacity to…” language in the statute, issued regulations that purport to sweep predictive dialers into the definition of ATDS. Since then, courts have reached a range of conclusions in cases where there was little or no dispute that the dialer in question was not being used to dial numbers randomly or sequentially. Unfortunately, some of those decisions have taken the illogical position that a dialing system is covered by the TCPA even where it lacks the ability to autodial absent technical alterations or additional software.
Two recent cases, however, appear to have taken a more reasoned approach to the issue. In one case, Hunt v. 21st Mortgage Corp., a federal judge in Alabama reasoned that a dialing system is not covered by the TCPA unless it has the “present” capacity to auto-dial. There, the defendant produced evidence to suggest that the dialer at issue lacked software necessary to allow it to dial numbers randomly or sequentially. The court concluded that the equipment would not be considered an auto-dialer if that were true and ordered discovery on that question.
In another case pending in California state court, the judge disposed of a TCPA case upon the finding that the dialer lacked the ability to dial numbers randomly or sequentially when the calls in question were made.
All of this brings us back to the question of whether these decisions will help to stem the tide of opportunistic TCPA litigation. The decisions definitely blow the whistle on some of the more illogical decisions that have come before. After all, who can dispute that a dialer lacks the capacity to dial numbers randomly or sequentially if it is incapable of dialing numbers in that manner? Yet, despite these recent decisions, companies that use predictive dialers to contact customers should consider appropriate steps to mitigate TCPA litigation risk.