3rd Circuit: Student loan servicer’s calling system is not an autodialer under the TCPA

Courts Appellate Third Circuit TCPA Robocalls Class Action Autodialer

On June 14, the U.S. Court of Appeals for the Third Circuit affirmed a district court’s ruling in favor of a defendant student loan servicer, holding that it is not enough for telecommunication equipment to be capable of using a random or sequential number generator to dial telephone numbers in order to meet the definition of an automatic telephone dialing system (autodialer). Instead, to constitute a violation of the TCPA, the telecommunication system must actually employ such random- or sequential-number generation when placing the actual call. The plaintiffs filed a putative class action complaint against the defendant alleging it used an autodialer to call class members’ cell phones without their prior express consent. The defendant countered that the TCPA claims fail because its calling system “lacked the capacity to generate random or sequential telephone numbers and then dial those numbers.” As such, it could not be an autodialer. The district court granted summary judgment in favor of the defendant, ruling that the defendant did not use an autodialer to place the calls at issue as the calling system did not have “the necessary present capacity to store or produce telephone numbers using a random or sequential number generator.”

On appeal, the 3rd Circuit disagreed with the district court’s finding that the defendant’s telecommunication system was not an autodialer, noting that the district court used too narrow a definition of the term “equipment” and holding that “an [autodialer] may include several devices that when combined have the capacity to store or produce telephone numbers using a random or sequential number generator and to dial those numbers.” Thus, the 3rd Circuit held that the district court erred in accepting defendant’s argument that the defendant’s telephone system was not an autodialer because the defendant’s SQL Server (which was capable of generating random and sequential numbers) was independent of the defendant’s dialing system.

Nonetheless, the 3rd Circuit affirmed the district court’s ruling on the basis that it did not matter whether the defendant’s calling system could be classified as an autodialer under the TCPA because the phone numbers were drawn from a contact list stored on the defendant’s SQL Server and not randomly generated. As such, the appellate court held that the plaintiffs’ claims fail because the defendant did not actually use random- or sequential-number generation when it placed the specific calls in question.

While agreeing with the decision to affirm, one of the judges argued that the majority focused on the wrong question. “In my view, the fundamental question is: what is an [autodialer] under Section 227(a)(1)? I would hold that a dialing system must actually use a random or sequential number generator to store or produce numbers in order to qualify as an [autodialer] under § 227(a)(1),” the concurring judge wrote. “Because [defendant’s] dialing system did not do so, it is not an [autodialer], and [defendant] is entitled to summary judgment.”