2nd Circuit Construes TCPA’s Definition of Autodialer Broadly

The U.S. Court of Appeals for the Second Circuit recently considered whether text message platforms used for marketing campaigns should be considered automatic telephone dialing systems (ATDS) if they use numbers generated by people, but stored by the platform, and when a person has to decide to initiate the roll-out of the messages.  The Court of Appeals made two important findings.  First, it reiterated that if a system can store numbers – even those generated by people – this is sufficient to meet the first capacity requirement.  Second, it found that a person pressing a send button to initiate a text campaign, even when a person decided on the timing of the campaign, is an insufficient amount of human intervention to find that “dialing” was not automatic. 

Here, the suit was brought after a customer received hundreds of text messages from a nightclub after providing his phone number to the business to receive a promotion. The business saved his phone number and then used two text platforms to send out additional promotions and advertisements.  The business claimed that the platforms required elements of human intervention and, therefore, should not be considered automatic.

The Court considered whether the platforms had the capacity to “store or produce telephone numbers to be called, using a random or sequential number generator.” Ultimately, the Court found that the statute indicates that an ATDS does not need to be capable to both store and produce numbers; the ability to do either one is sufficient to fulfill the capacity requirement. The Court’s discussion conveys that the plain-language interpretation of the statute supports this theory, as do the exceptions to the TCPA, including the exception that allows for the use of an ATDS to “collect a debt owed to or guaranteed by the United States.”  This exception indicates that the numbers are not generated by the system; there are specific numbers that need to be called and they are stored by the system.  Thus, in carving out this exception, Congress acknowledged that an ATDS would be capable of storing numbers that were not randomly generated by it. The FCC has confirmed this interpretation of the TCPA in its rules promulgated in 2003, 2008, and 2012, and the Court’s decision in this case clarifies that the 2003, 2008, and 2012 FCC rules survived the Court’s decision in King v. Time Warner Cable Co. 894 F.3d 473 (2d Cir. 2018), as well as the DC Circuit’s decision in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018). This decision clarifies that the holding in King specifically invalidated FCC rules from 2015 (but not the rules from 2003, 2008, or 2012), and that the holding specifically did not interpret the definition of an ATDS, focusing instead on the definition of “capacity.”   

Thus, because the text platforms used by the business in this case could store the phone numbers it fulfilled the first capacity requirement, regardless of the fact that the numbers themselves were not generated by the program. 

The second capacity requirement, the ability to dial numbers, was met by the platforms.  The FCC has stated that this capacity is met if a system can dial a number without “human intervention.”  Here, the court considered what level of human intervention would indicate that the system is not automatic.  The business argued that their systems involved multiple aspects of human intervention: uploading a message, determining the time the message gets sent, and initiating the sending.  Here, the Court of Appeals disagreed with the lower court’s finding that the decision regarding the timing of the message was a dispositive finding that there was enough human intervention to indicate that the system was not, in fact, automatic.  The Court states that the question of timing should be considered – but it is not enough to find that system is not an ATDS.  The decision reiterates that a system that can dial numbers independently is an ATDS and further stated that, as the definition of “dialing” has changed over the years, it is important to understand what dialing means in this context.  The decision states that “merely clicking send” on a text message is not dialing.  The decision finds that if a person indicates that certain messages should be sent in a program, like in the program at issue, the person “may be instructing the system to dial the numbers,” and is, therefore, “one step removed” from dialing.  The court found that the act of clicking send on such messages is not enough human intervention to find that system is not automatic.   If the extent of human intervention necessary for a text advertisement is the need to click a send button, then the system should be considered automatic.  The decision also specifically addressed whether this definition would deem each smartphone an ATDS because users can click on saved contacts in their phone or can use voice activation to call or text saved contacts.  The decision makes clear that texting or calling a saved phone contact is constructively dialing a number:  a saved contact is replacing the several digit number with a shortcut and therefore, the act of selecting a contact and then clicking send is effectively dialing that number. This is distinct from clicking send on an ATDS; an action which initiates dialing hundreds (or more) of numbers.