8th Circuit: Text Marketing System is Not an ATDS Under the TCPA

On March 24, 2022, the U.S. Circuit Court of Appeals for the Eighth Circuit issued an opinion considering whether an automated promotional text marketing system that sent messages to randomly selected phone numbers that were manually entered qualified as an automatic telephone dialing system (ATDS) under the TCPA.  The Eighth Circuit concluded that because the automated marketing system did not “produce” telephone numbers to be called it did not qualify as an ATDS.

The Appellant individuals in the case had received promotional text messages from the Appellee bar establishments.  The Appellants claimed that these text messages violated the TCPA because they were sent by an ATDS without Appellants’ consent.  The Appellees sent the text messages through a marketing software platform, and the question before the court was whether this software qualified as an ATDS under the TCPA.

The Eighth Circuit held that the marketing software did not fall under the TCPA’s ATDS definition after a detailed analysis of the software’s function, finding that the marketing software did not generate phone numbers.  Focusing its analysis on the software’s functionality, the Eighth Circuit noted that the software maintained a database of the Appellees’ former and potential customer contact information that was manually entered.  Because of this distinction between manual entry and system generation, the Eighth Circuit found that the system did not “produce telephone numbers to be called.”

The Eighth Circuit also analyzed the U.S. Supreme Court’s ruling in Facebook v. Duguid, 141 S. Ct. 1163 (2021).  The Eighth Circuit opined that Facebook serves to limit the application of the ATDS term by “exclud[ing] equipment that does not ‘us[e] a random or sequential number generator.”  In considering Facebook, the Eighth Circuit explained that the marketing software in question “is exactly the kind of equipment Facebook excluded from § 227(a)(1)—‘equipment that merely stores and dials telephone numbers.’”