Since the D.C. Circuit issued its ruling in March invalidating as arbitrary and capricious many of the FCC’s interpretations of the Telephone Consumer Protection Act (“TCPA”), courts have been tasked with clarifying the definition of autodialer under the TCPA. Industry received good news in June when the Third Circuit ruled that an autodialer must have the actual and present capacity to generate random or sequential numbers in order to be considered an autodialer under the TCPA.
That good news has not lasted, however. The Ninth Circuit weighed in on the autodialer issue in Marks v. Crunch San Diego, LLC, declining to follow the Third Circuit and instead sweeping a number of other dialing devices within the purview of the TCPA. Reversing a grant of summary judgment for Crunch, the Ninth Circuit determined that autodialers are devices which have the capacity “to store numbers to be called” or “to produce numbers to be called using a random or sequential number generator,” and to dial such numbers. This definition effectively captures dialing devices that can dial from prepopulated lists of phone numbers, even if that device does not have any capacity to randomly or sequentially generate phone numbers to be dialed.
The Ninth Circuit began by reviewing the actual statute:
(1) The term ‘automatic telephone dialing system’ means 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.
Finding this ambiguous, the Court then considered canons of construction, legislative history, and the statute’s overall purpose to ascertain congressional intent. The Court determined that Congress intended to regulate devices that make automatic calls. At the time the TCPA was enacted, the focus was on equipment that dialed blocks of sequential or randomly generated numbers. But the Court also noted that the statute includes a number of provisions permitting an autodialer to call selected numbers. For example, calls can be made with prior express consent and calls can be made to collect debts owed to the United States. Likewise, other provisions of the statute prohibit calls to specified numbers. Because Congress expressly permitted some calls and blocked others, the Court ruled this evidenced an intent by Congress that companies would use stored lists of phone numbers and permit or block numbers to be called.
Having determined that Congress intended the definition of autodialer to include devices that could store numbers to be called, the Court defined autodialer to be equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers.
As an extension of this ruling, the Court also (1) rejected Crunch’s contention that autodialers do not include devices that require human intervention; and (2) declined to follow the Third Circuit’s determination that a device must be able to generate random or sequential numbers in order to qualify as an autodialer.
This new definition of autodialer thus required reversal of the district court’s grant of summary judgment to Crunch, as there was a genuine dispute of material fact regarding whether Crunch used an autodialer. The Court did not, however, opine on whether an autodialer must have the current capacity to perform the required functions or just the potential capacity to do so.
For companies seeking relief from the continued surge of TCPA litigation, the Marks case is not welcome news. Before embarking on any telephone or text messaging calls or campaigns, companies should consider the Marks case and assess risks given the TCPA’s high statutory penalties. As more Circuit courts weigh in, we may see a continued split in how courts define autodialer under the TCPA.