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District Court certifies TCPA class action against debt collector
On May 31, the U.S. District Court for the Western District of Washington granted a plaintiff’s motion for class certification in an action alleging a defendant debt collector placed unsolicited calls to borrowers’ cell phones when attempting to collect federal student loan debt. The plaintiff contended that the defendant violated the TCPA by calling her up to seven times a day without her consent using an automatic telephone dialing system (autodialer) and prerecorded calls or artificial voice calls. According to the plaintiff, in 2019, the defendant obtained her cell phone number through skip-tracing services performed by one of its vendors. The defendant allegedly had access to a call recording from a 2017 conversation between a Department of Education contractor and the plaintiff during which the plaintiff provided her phone number. The defendant, however, allegedly was not aware of the recording nor did it seek to access the file until after the plaintiff filed suit. The defendant also supposedly received a file from the contractor containing the plaintiff’s number but not until after it already acquired the number from the skip-tracing vendor. The defendant denied that it used an autodialer or made prerecorded calls or artificial voice calls. The defendant also claimed that “because it had constructive access to the recording of plaintiff’s 2017 phone conversation with [the contractor] and received the [] file with plaintiff’s number, it had plaintiff’s prior express consent to receiving calls.”
The court certified the class, ruling that the question of whether access to the files in question was sufficient to confer consent under the TCPA is “a closer legal question, but not one that overcomes predominance at this stage.” According to the court, “the issue of whether defendant can show that its right of access to [the contractor’s] files constituted prior express consent is one that is currently capable of classwide resolution. Accordingly, while the affirmative defenses defendant presses will no doubt be important to the outcome of the litigation, they presently do not undercut the central common issues in this case.”
District Court partially grants bank’s motion in TCPA case
On March 3, the U.S. District Court for the Western District of Kentucky partially granted and partially denied a defendant bank’s motion for summary judgment in a TCPA case. According to the opinion, the plaintiff allegedly did not meet his minimum monthly credit card payments, so the defendant began conducting debt collection calls. The defendant allegedly attempted 574 communications via phone call, prerecorded messages, or text messages, including 111 prerecorded messages, during a 7-month period.
The plaintiff filed suit, alleging the defendant violated the TCPA by contacting him using an automatic telephone dialing system (ATDS) before and after he allegedly revoked consent to be contacted. The district court held that the telephone system used by the defendant to contact the plaintiff did not qualify as an ATDS under the Supreme Court’s ruling in Facebook v. Duguid (Covered by a Buckley Special Alert here), which narrowed the definition of an ATDS under the TCPA. The court was “not persuaded by [the plaintiff’s] argument that [the telephone system] is an ATDS simply because it has the ‘capacity to store telephone numbers using a random or sequential number generator, and then to dial those numbers without human intervention.’”
The plaintiff also argued that the defendant violated the TCPA by sending the 111 prerecorded messages. The court determined that while the plaintiff had initially consented to being contacted by the defendant when he provided his telephone number to create his account, there was a genuine dispute of material fact as to whether the plaintiff subsequently revoked his consent. Even though the defendant submitted seven call recordings between itself and the plaintiff in support of its argument that the plaintiff did not specifically revoke consent, the court explained that “the evidence could lead reasonable minds to differ,” including the plaintiff’s deposition testimony, his request to have information sent to him via mail, his refusal to talk to a collector and hanging up the phone on a subsequent call, and his failure to answer the phone when the defendant called.
9th Circuit affirms judgment for defendant in TCPA autodialer suit
On January 19, the U.S. Court of Appeals for the Ninth Circuit affirmed summary judgment in favor of a defendant accused of violating the TCPA after allegedly using an automatic telephone dialing system (autodialer). The plaintiff claimed that the defendant’s platform qualifies as an autodialer since it “stores telephone numbers using a sequential number generator because it uploads a customer’s list of numbers and produces them to be dialed in the same order they were provided, i.e., sequentially.” According to the 9th Circuit, the plaintiff’s interpretation would mean that “virtually any system” with the capability to store a pre-produced list of telephone numbers would qualify as an autodialer if it could also autodial the stored numbers. The court noted that this interpretation was rejected in the U.S. Supreme Court’s 2021 decision in Facebook Inc. v. Duguid, which narrowed the definition of what type of equipment qualifies as an autodialer under the TCPA and held that an autodialer “must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a using a random or sequential number generator.” (Covered by a Buckley Special Alert here.)
The plaintiff attempted to rely on a footnote in the Court’s ruling, which endeavored to explain why the terms “produce” and “store” were used in the definition of an autodialer, but the 9th Circuit concluded that the footnote discussion was not central to the Court’s analysis in Duguid and therefore did not require it to adopt the plaintiff’s interpretation. After finding that the defendant’s system does not qualify as an autodialer “merely because it stores pre-produced lists of telephone numbers in the order in which they are uploaded,” the appellate court concluded that the plaintiff’s TCPA claims failed. It further determined that even if Duguid did not foreclose the plaintiff’s argument, the district court was correct to conclude that the system at issue “does not have the capacity to automatically dial telephone numbers.”
District Court grants motion to dismiss TCPA claim
On June 24, the U.S. District Court for the Northern District of California granted a motion to dismiss a putative class action suit, in which the plaintiff alleged that the defendant sent messages using an “automatic telephone dialing system” (autodialer) within the meaning of the TCPA. As previously covered by a Buckley Special Alert, in April the U.S. Supreme Court in Facebook, Inc. v. Duguid narrowed the definition of what type of equipment qualifies as an autodialer under the TCPA, a federal statute that generally prohibits calls or texts placed by autodialers without the prior express consent of the called party. In this district court case, the platform utilized by the defendant to contact the plaintiff allegedly placed calls only to phone numbers supplied by consumers when signing up for the defendant’s services. The plaintiff alleged that the platform nonetheless qualified as an autodialer because it used a “random number generator to determine the order in which to pick from the preproduced list of consumer phone numbers, such that it does qualify as an autodialer.” The plaintiff claimed this feature brought the platform within the TCPA’s definition of an autodialer, referring to a line from footnote 7 of the Duguid opinion. That footnote states that “an autodialer might use a random number generator to determine the order in which to pick phone numbers from a preproduced list. It would then store those numbers to be dialed at a later time.” However, in the order, the district court rejected the plaintiff’s argument as inconsistent with the rationale in Facebook and an “acontextual reading” of the footnote. In rejecting the argument, the court explained that under Facebook’s holding, “to qualify as an autodialer, a device must have ‘the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” The district court found that defendant’s platform was only texting customers who had already provided their contact information. As a result, the platform did not qualify as an autodialer as a matter of law and the court dismissed plaintiff’s TCPA claim without leave to amend.
District Court, citing Supreme Court in Facebook, says bank’s dialing equipment is not an autodialer
On June 9, the U.S. District Court for the District of South Carolina granted summary judgment in favor of a national bank, ruling that the dialing equipment used by the bank did not fit within the U.S. Supreme Court’s narrowed definition of the type of equipment that qualifies as an autodialer under the TCPA. As previously covered by a Buckley Special Alert, the Supreme Court held that in order to qualify as an “automatic telephone dialing system,” a device must have the capacity either to store or produce a telephone number using a random or sequential generator. The TCPA defines an autodialer as equipment with the capacity both “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers. The question before the Supreme Court in Facebook Inc. v. Duguid was whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not use “a random or sequential number generator.” The Court held it does not, stating that the modifier “using a random or sequential number generator” applied to both terms “store” and “produce.”
In the South Carolina case, the plaintiff argued that the bank used an autodialer when it placed at least 155 debt collection calls without her consent. She sued the bank, alleging, among other things, violations of the TCPA, FCRA, and invasion of privacy. The court ruled in favor of the bank on the FCRA and invasion of privacy claims and directed the parties to refile their motions after the Supreme Court issued its decision in Facebook. Following the Facebook opinion, the plaintiff argued that “the dialer at issue must only have the capacity to store or produce numbers using a random or sequential number generator, and Defendant’s internal documents establish that the [bank’s dialing equipment] has that capacity,” and that, moreover, a footnote in Facebook “leaves open the possibility that the [equipment’s] ability to use a random number generator to determine the order in which numbers are dialed from a preproduced list may qualify it as an ATDS.”
The court disagreed, concluding that even though internal bank documents referred to the dialing equipment as an autodialer and showed that the equipment dialed numbers automatically without the assistance of an agent, the information was insufficient to meet the Supreme Court’s statutory definition. “As we learned from Duguid, the automatic dialing capability alone is not enough to qualify a system as an ATDS,” the court ruled. “The system at issue must store numbers using a random or sequential number generator or produce numbers using a random or sequential number generator to qualify as an ATDS.” According to the court, the bank’s equipment dialed members’ numbers from a pre-created list of targeted accounts. With respect to the plaintiff’s footnote argument, the court found that the plaintiff was taking the footnote in Facebook “out of context.”
Special Alert: Supreme Court narrows TCPA autodialer definition
On April 1, the United States Supreme Court issued its long-awaited opinion in Facebook Inc. v. Duguid. The 9-0 decision narrows the definition of what type of equipment qualifies as an autodialer under the Telephone Consumer Protection Act (TCPA), a federal statute that generally prohibits calls or texts placed by autodialers without the prior express consent of the called party.
The TCPA defines an autodialer as equipment with the capacity both “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers. The question before the Supreme Court in Facebook was whether that definition encompasses equipment that can “store” and dial telephone numbers, even if the device does not use “a random or sequential number generator.” The Court held it does not. Rather, to qualify as an “automatic telephone dialing system,” the Court held that a device must have the capacity either to store or produce a telephone number using a random or sequential generator. In other words, the modifier “using a random or sequential number generator” applied to both terms “store” and “produce.”
Background
In 2014, Noah Duguid received text messages from Facebook alerting him that someone attempted to access his Facebook account. However, Duguid alleged that he never provided Facebook his phone number and did not have a Facebook account.
Duguid was unable to stop the notifications and eventually brought a putative class action against Facebook, alleging that Facebook violated the TCPA by maintaining technology that stored phone numbers, and sent automated texts to those numbers each time the associated account was accessed by an unrecognized device or web browser.
The U.S. District Court for the Northern District of California dismissed Duguid’s amended complaint with prejudice, but the Ninth Circuit reversed, finding Duguid stated a claim under the TCPA by alleging Facebook’s notification system automatically dialed stored numbers. The Ninth Circuit held that an autodialer as defined under the TCPA, need not have the capacity to use a random or sequential number generator, but that it need only have the capacity to store number to be called and to dial those numbers automatically.
Holding
The Supreme Court reversed the Ninth Circuit, holding that to “qualify as an ‘automatic telephone dialing system,’ a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.”
In reaching this decision, the Court explained that “expanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw” to the nuanced problems Congress sought to address with the TCPA. It further explained that Duguid’s interpretation of an autodialer—the one adopted by the Ninth Circuit—“would capture virtually all modern cell phones, which have the capacity to store telephone numbers to be called” and “dial such numbers.” “TCPA’s liability provisions, then, could affect ordinary cell phone owners in the course of commonplace usage, such as speed dialing or sending automated text message responses.”
And while the Court acknowledged that interpreting the statute in the manner it did may limit its application, the Court reasoned that it “cannot rewrite the TCPA to update it for modern technology,” and that its holding reflected the best reading of the statute.
If you have any questions regarding the Supreme Court’s decision regarding the TCPA, please visit our Class Actions practice page, or contact a Buckley attorney with whom you have worked in the past.
Court cites 6th Circuit, rules TCPA covers autodialers using stored lists
On February 25, the U.S. District Court for the Northern District of West Virginia ruled that a satellite TV company cannot avoid class claims that it made unwanted calls to stored numbers using an automatic telephone dialing system (autodialer). The company filed a motion to dismiss plaintiff’s claims that it violated Section 227 of the TCPA when it made illegal automated and prerecorded telemarketing calls to her cellphone using an autodialer. The company argued, among other things, that the “statutory definition of an [autodialer] covers only equipment that can generate numbers randomly or sequentially,” and that “nothing in the complaint plausibly alleges that any of the calls were sent using that type of equipment.” According to the company, list-based dialing cannot be subject to liability under the TCPA. The court disagreed, stating that the TCPA makes it clear that it covers autodialers using stored lists. The court referenced a 6th Circuit decision in Allan v. Pennsylvania Higher Education Assistance Agency, which determined that “the plain text of [§ 227], read in its entirety, makes clear that devices that dial from a stored list of numbers are subject to the autodialer ban.” (Covered by InfoBytes here.) The court also referenced decisions issued by the 2nd, 6th, and 9th Circuits, which all said that the TCPA’s definition of an autodialer includes “autodialers which dial from a stored list of numbers.” However, these appellate decisions conflict with holdings issued by the 3rd, 7th, and 11th Circuits, which have concluded that autodialers require the use of randomly or sequentially generated phone numbers, consistent with the D.C. Circuit’s holding that struck down the FCC’s definition of autodialer in ACA International v. FCC (covered by a Buckley Special Alert). Currently, the specific definition of an autodialer is a question pending before the U.S. Supreme Court in Duguid v. Facebook, Inc. (covered by InfoBytes here). The court further ruled that three out-of-state consumers should be removed from the case as they failed to meet the threshold for personal jurisdiction, and also reiterated that the case could not be arbitrated as the company’s arbitration clause was “unconscionable.”
Eleventh Circuit affirms ruling in TCPA re-consent case
On December 4, the U.S. Court of Appeals for the Eleventh Circuit affirmed summary judgment in a TCPA action in favor of a student loan servicer and an affiliate responsible for performing default aversion services (collectively, “defendants”), concluding that the plaintiff re-consented to being contacted on his cell phone after filling out a form on the servicer’s website. According to the opinion, following a class action settlement in 2010—in which members of the class (including the plaintiff) who did not “submit revocation request forms were ‘deemed to have provided prior express consent’” to be contacted by the defendants—the plaintiff later claimed to have revoked consent to being contacted through the use of an automated telephone dialing system (autodialer) during a call with the servicer. While on the call, the plaintiff filled out an online automatic debit agreement to make payments on his delinquent loan. The agreement included a demographic form with an option for the plaintiff to update his contact information, which included an optional cell phone number field and a disclosure that granted consent to being contacted on his cell phone using an autodialer. The defendants began contacting the plaintiff on his cell phone after he fell behind on his loan payments, and the plaintiff sued, alleging the defendants violated the TCPA by placing calls using an autodialer without obtaining his prior express consent. The district court granted the servicer’s motion for summary judgment, ruling that the plaintiff “expressly consented” to receiving the calls and could not “unilaterally revoke” consent “given as consideration in a valid bargained-for-contract,” and that the plaintiff nonetheless “reconsented when he submitted the demographic form.” The plaintiff appealed, arguing, among other things, that he did not re-consent to being contacted because the form was submitted directly after his oral revocation to the servicer.
On appeal, the 11th Circuit agreed with the district court, holding that while it was true that the plaintiff “filled out the demographic form just moments after he orally revoked his prior consent, [the plaintiff] cites no authority that this temporal proximity should require this Court to consider the separate interactions (of revoking consent and later reconsenting) as one lumped-together interaction.” As such, the appellate court disagreed with the plaintiff’s argument “that the revocation of consent standard should stretch to apply to [his] later reconsent to [the servicer].”
38 state AGs argue for broad TCPA autodialer definition
On October 23, a coalition of 38 state attorneys general filed an amici curiae brief with the U.S. Supreme Court, urging the court to accept the broad definition of an autodialer under the TCPA, which would cover all devices with the capacity to automatically dial numbers that are stored in a list. As previously covered by InfoBytes, the Court agreed to review the U.S. Court of Appeals for the Ninth Circuit’s decision in Duguid v. Facebook, Inc. (covered by InfoBytes here), which concluded the plaintiff plausibly alleged the social media company’s text message system fell within the definition of autodialer under the TCPA. The 9th Circuit applied the definition from their 2018 decision in Marks v. Crunch San Diego, LLC (covered by InfoBytes here), which broadened the definition of an autodialer to cover all devices with the capacity to automatically dial numbers that are stored in a list.
The attorneys general argue that the 9th Circuit’s definition of autodialer is “the only reading of the autodialer definition that is consistent with the ordinary meaning of the definition’s two key verbs: ‘store’ and ‘produce.’” Moreover, they assert the broad definition is within the original 1991 meaning of the TCPA when it was enacted by Congress as a way to address the gaps state consumer protection laws may have in preventing interstate telephone fraud and abuse. According to the attorneys general, every state statute that defined an autodialer in 1991, “understood that term to reach devices with the capacity to store and dial numbers from a predetermined list, regardless of whether a random or sequential number generator was used.” Therefore, when Congress enacted the TCPA with the intention to “supplement—not to shrink—preexisting state laws,” it would follow that Congress would not intentionally adopt a narrower definition than existed at the time among the states.
6th Circuit affirms expansive autodialer definition
On July 29, the U.S. Court of Appeals for the 6th Circuit affirmed summary judgment in favor of the plaintiffs in a TCPA action, holding that a device used by a student loan servicer that only dials from a stored list of numbers qualifies as an automatic telephone dialing system (“autodialer”). According to the opinion, a borrower and co-signer sued the student loan servicer alleging the servicer violated the TCPA by using an autodialer to place calls to their cell phones without consent. The district court granted summary judgment in favor of the plaintiffs and awarded over $176,000 in damages. On appeal, the servicer argued that the equipment used did not qualify as an autodialer under the TCPA’s definition, because the calls are placed from a stored list of numbers and are not “randomly or sequentially” generated. The 6th Circuit rejected this argument, joining the 2nd and 9th Circuits, holding that under the TCPA, an autodialer is defined as “equipment which has the capacity—(A) to store [telephone numbers to be called]; or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” This decision is in conflict with holdings by the 3rd, 7th, and 11th Circuits, which have held that autodialers require the use of randomly or sequentially generated phone numbers, consistent with the D.C. Circuit’s holding that struck down the FCC’s definition of an autodialer in ACA International v. FCC (covered by a Buckley Special Alert).
As previously covered by InfoBytes, the U.S. Supreme Court recently agreed to address the definition of an autodialer under the TCPA, which will resolve the split among the circuits.