More than two years after the Supreme Court’s opinion in Facebook v. Duguid, courts and litigants continue to wrestle with the statutory definition of “automatic telephone dialing system” (ATDS) under the Telephone Consumer Protection Act (TCPA). The debate centers on footnote 7 in Facebook, wherein the Supreme Court ostensibly embraced the proposition that an ATDS includes dialing systems that employ random or sequential number generators (RSNGs) to index and/or order telephone numbers for later dialing, but do not themselves generate the telephone numbers to be dialed. A recent opinion issued in the U.S. District Court for the District of Colorado illustrates the ongoing controversy surrounding footnote 7 and its impact on current and future TCPA claims.
In Scherrer v. FPT Operating Co., LLC, the plaintiff alleged that the defendant violated the TCPA by calling her cell phone without her consent using an ATDS. As alleged in the complaint, the defendant’s ATDS employed a RSNG that did not itself generate telephone numbers, but instead “generate[d] random numbers, to order calls, and store[d] these random numbers in a database, to indicate the ‘shuffled’ dialing order.” The defendant moved to dismiss, arguing that the TCPA claim failed as a matter of law because the complaint failed to allege use of an ATDS as defined in 47 U.S.C. § 227(a)(1) and interpreted by the Supreme Court in Facebook — i.e., the complaint failed to allege that the RSNG generated telephone numbers. The plaintiff opposed, contending that Facebook did not resolve whether an RSNG must itself generate telephone numbers and, therefore, did not foreclose the plaintiff’s TCPA claim. In a 14-page opinion, the presiding magistrate judge denied the defendant’s motion to dismiss.
The court’s analysis began with a summary of Facebook, which held that “[t]o qualify as an [ATDS], a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.” According to the court, however, Facebook did not address whether “whether a [RSNG] refers only to a device that generates telephone numbers themselves, or also a device that generates a number used to select from a list of indexed and existing telephone numbers.” The court found support for this conclusion in footnote 7 which, though dicta, seemingly signaled the Supreme Court’s recognition of an ATDS that “might use a random number generator to determine the order in which to pick phone numbers from a preproduced list.” Given footnote 7 and the lack of controlling Tenth Circuit precedent on this point, the court concluded that “an autodialer that stores a list of telephone numbers using a [RSNG] to select the order in which the telephone numbers will be called, is an ATDS under the TCPA.” Based on this reading of footnote 7, the court found the plaintiff had plausibly alleged the defendant’s use of an ATDS.
Our Take:
Scherrer was decided by a magistrate judge — not an Article III judge — on a motion to dismiss that necessarily precluded consideration of the specific dialing system employed by the defendant. Moreover, Scherrer is at odds with recent opinions by the Eighth and Ninth Circuit (discussed here and here), which specifically rejected the idea that footnote 7 indicated the Supreme Court’s belief that a dialing system that randomly selects from non-random telephone numbers qualifies as an ATDS. Even so, it would be unwise to dismiss Scherrer as an outlier. As noted in the opinion, other district courts have embraced a similar interpretation of footnote 7. And, as discussed here, a writ of certiorari to the Supreme Court concerning this very issue remains pending. Absent further clarification by the high court, litigants can expect more divergence among federal courts concerning the meaning of Facebook and its now-famous footnote 7.
