In the midst of chaos over the proper definition of the statutory term “automated telephone dialing system,” the Northern District of Illinois reminds us that the plain language of the TCPA still matters.  In granting summary judgment to AT&T in Gadelhak v. AT&T Servs., No. 17-cv-01559 (March 29, 2019), the Court found that AT&T’s texting system did not qualify as an ATDS because the system did not “store” telephone numbers “using a random or sequential number generator” as the numbers were dialed from a predetermined list.

The lawsuit arose from AT&T survey texts sent to customers who had engaged in qualifying transactions with a customer service representative.  The plaintiff filed a putative TCPA class action against AT&T alleging that he received 5 survey text messages from AT&T in Spanish—though he was not a customer of AT&T or any of its affiliates, did not speak Spanish, and had registered his phone number on the DNC Registry.

AT&T maintained that its system was only designed to text AT&T customers and that the plaintiff’s number “must have been erroneously listed” on an account.  The record evidence revealed that AT&T’s computer system would first identify all phone numbers on accounts with customer-service transactions, send the list of phone numbers to marketing for processing, and then whittle the list down to only the first cell phone number listed on the relevant accounts.  AT&T’s vendor would send the text-message surveys out to this reduced list of cell phone numbers.

The parties cross-moved for summary judgment, with the primary issue being whether AT&T used an “automatic telephone dialing system” in sending texts to the plaintiff and putative class members.  The court framed much of its opinion around the D.C. Circuit’s decision in ACA International in determining the proper definition of an ATDS and the status of prior FCC orders on the definition.

The court first held that ACA International vacated not only the 2015 FCC Order’s interpretation of an ATDS, but also the interpretations in the prior 2003 and 2008 FCC Orders.  The court noted that, in vacating 2015 Order’s interpretation of autodialer,  the D.C. Circuit referred generally to all “pertinent pronouncements” and to the FCC’s “prior rulings.”  The court also reasoned that the 2003 and 2008 FCC Orders were plagued by the same problems as the 2015 FCC Order—they failed “to satisfy the requirement of reasoned decisionmaking” because 2015 FCC Order reaffirmed the previous pronouncements defining autodialers overbroadly to include equipment that can dial automatically from a given list of numbers without the capacity to generate numbers either randomly or sequentially.

Hitting the nail on the head, the court framed the issue on summary judgment as “whether predictive-dialing devices that lack the capacity to generate numbers either randomly or sequentially, and instead only dial numbers from a predetermined list, meet the statutory definition of ATDS.”  The court agreed with AT&T in answering a resounding “no.”

Finding the FCC’s prior interpretations vacated, the court conducted a statutory analysis, with a bit of a grammar lesson sprinkled in, to conclude based on the plain language of the TCPA that random or sequential number generation is a requirement for any autodialer, and significantly, “the numbers stored by an ATDS must have been generated using a random or sequential number generator.”  But it gets better:  the Court “respectfully disagree[d]” with the reasoning in Marks v. Crunch San Diego, 904 F.3d 1041 (9th Cir. 2018), in which the Ninth Circuit held that equipment could be an ATDS either by (1) storing numbers to be called or (2) producing numbers to be called, using a random or sequential number generator.  Rejecting Marksholding, the Court found,“[t]he most sensible reading of the provision is that the phrase ‘using a random or sequential number generator’ describes a required characteristic of the numbers to be dialed by an ATDS—that is, what generates the numbers.”  In other words, Court held that AT&T’s system could not qualify as an ATDS because it generated a list of phone numbers through a computer process associated with customer files, and the numbers stored in those files were not generated using a random or sequential number generator.  The court rejected the plaintiff’s argument that AT&T’s system texted phone numbers in a “random” order, thus triggering the ATDS definition.  Relying on ACA International, the Court observed that the phrase “random or sequential” would be “meaningless” if it referred to the order of calls rather than to the order of the digits in a phone number because any list of numbers “must necessarily ‘be called in some order—either in a random or some other sequence.’”

The Gadelhak is a welcome decision that gives some much-needed credence to the TCPA’s statutory text, specifically the phrase “using a random or sequential number generator.”  Departing from the Marks progeny of cases holding the FCC’s 2003 and 2008 Orders are set aside but that the statutory definition does not require random or sequential number generation, the District Court in the Northern District of Illinois agreed that the 2003 and 2008 orders are indeed toast because they failed to satisfy “reasoned decisionmaking,” but on the definition of an autodialer, the Court (rightfully) rejected Marks’expansive definition by holding that an ATDS must store numbers that have been generated “using a random or sequential number generator.”  Where did the Court get this novel theory?  The plain language of the statute, of course!  As courts continue to grapple over the ATDS definition, and until the FCC weighs in, we’ll be keeping score on the ever-elusive ATDS definition.  Check out our Rolling ATDS Review here.


Editor's note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP -- and all insideARM articles - are protected by copyright. All rights are reserved.  

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