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Recent District Court Decisions:  Random or Sequential Number Generation Required under TCPA Definition of an Auto-dialer

In two recent cases, federal district courts cast doubt on the wisdom of the Ninth Circuit’s controversial decision in Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018).  Marks held that a blast-text message system using a stored list of phone numbers (and without employing a random or sequential number generator) may trigger TCPA liability.  The decision noticeably deviates from the statutory definition of an automatic telephone dialing system.  Under the statute, an ATDS is defined as equipment that has (1) “the capacity to store or produce telephone numbers to be called, using a random or sequential number generator” and (2) the ability “to dial such numbers.”

The first case is Johnson v. Yahoo!, Inc., No. 14-cv-2028, 2018 WL 6426677 (N.D. Ill. Nov. 29, 2018).  The court granted summary judgment for the defendant Yahoo after concluding that Yahoo’s text message system was not an ATDS under the statute because it merely stored numbers from a database of known customers and did not employ a random or sequential number generated.  The court rejected the notion that its interpretation ignores the statutory reference to “stor[ing]” numbers:

This does not make the term “store” superfluous. The word “store” ensures that a system that generated random numbers and did not dial them immediately, but instead stored them for later automatic dialing (after, for example, some human intervention in activating the stored list for dialing) is an ATDS. This is consistent with the problem, including database marketing, Congress addressed in the TCPA.

The second case is Collins v. Nat’l Student Loan Program, No. 17-cv-5345, 2018 WL 6696168 (D.N.J. Dec. 20, 2018).  There, the district court noted that precedent from the Third Circuit demands that auto-dialer equipment must employ a random or sequential number generation function under the TCPA:

Third Circuit held that what makes a device an ATDS is not the “latent or potential capacity to function as an autodialer,” but rather the “present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.”

The Collins decision is noteworthy too because the defendant’s dialer equipment at issue was the LiveVox HCI system.  The Collins court noted that LiveVox HCI “does not constitute an ATDS under the TCPA because the system cannot initiate calls without manual human intervention by a clicker agent.” This ruling is consistent with at least one other recent district court case, Hatuey v. IC Sys., Inc., No. 1:16-cv-12542, 2018 WL 5982020, at *7 (D. Mass. Nov. 14, 2018) (LiveVox HCI is not an ATDS under the TCPA because it requires human intervention to initiate communication).

Mark RooneyTCPA, ATDS