Split Among Federal Appellate Courts on Autodialer Definition Deepens

Update July 09: The Supreme Court has agreed to resolve the circuit split on the autodialer issue by granting the petition for certiorari in the Facebook v. Duguid case, in what will surely be one of the most closely watched cases of the upcoming Term. (The Court declined to take up the constitutional question posed in Facebook's petition.)

The U.S. Court of Appeals for the 11th Circuit has deepened the split among federal appeals courts as to what constitutes an automatic telephone dialing system (ATDS, or “autodialer”) for purposes of equipment restrictions under the Telephone Consumer Protection Act (TCPA).

Ever since the U.S. Court of Appeals for the D.C. Circuit invalidated a Federal Communications Commission (FCC) ruling that broadly defined the term to widen the scope of the TCPA’s restrictions on autodialers—but declined to interpret the statutory term with specificity—and in the absence of an FCC ruling on remand, courts have been left to interpret the statutory definition themselves.

The 11th Circuit’s January 27, 2020, divided ruling in Glasser v. Hilton Grand Vacations adopts perhaps the narrowest definition of ATDS yet. The decision could be a potential boon to companies that employ equipment to boost the efficiency of their telephonic outreach to customers and other consumers, and to those caught up in what continues to be voluminous TCPA litigation.

Additionally, it illustrates even more starkly the split among federal circuits on the ATDS issue, potentially increasing the odds of Supreme Court review.

Scope of TCPA Autodialer Definition

As explained in our advisories linked above, the scope of the TCPA autodialer definition has significant consequences for companies seeking to contact consumers via their mobile phones. Under the TCPA, it is unlawful to autodial cell phones (and other sensitive numbers, like health-care facilities, elderly homes, emergency numbers, etc.) without prior express consent regardless of the content of the call (unless it is for emergency purposes, which the TCPA permits), though marketing content requires an elevated form of “prior express written consent.”

This prohibition applies equally to both voice calls and texts. And because the TCPA provides a private right of action for violations, the last decade has seen an explosion of TCPA litigation—much of it stemming from alleged autodialer use without consent—with exposure and settlements reaching tens, or even hundreds of millions of dollars.

D.C. Circuit Overturns 2015 FCC Omnibus Ruling

In its 2015 Omnibus Ruling, the FCC revisited its interpretation of the TCPA’s autodialer definition, i.e., equipment with “capacity” to “store or produce telephone numbers to be called, using a sequential or number generator, and to dial such numbers.” It held a device is an autodialer even if it only has “potential” capacity to store or produce numbers and dial them, even if that capacity is not used to transmit a particular challenged call/text, and even if triggering that capacity requires additional software or hardware, so long as there is “more than a theoretical potential” to perform the FCC-identified autodialing functions.

In March 2018, the D.C. Circuit’s ACA International decision invalidated the FCC’s expansive interpretation, but left open the question of what devices the definition encompasses (or excludes) with respect to human intervention and the numbers to be dialed. This left parties “in a significant fog of uncertainty about how to determine if a device is an ATDS so as to bring into play the restrictions on unconsented calls.”

Since then, courts confronted with ongoing TCPA litigation, and left without an FCC definition to which they might defer, have returned to the statutory text, to develop their own definitions.

Circuit Courts Divided on ATDS Scope

In Dominguez v. Yahoo, the U.S. Court of Appeals for the 3rd Circuit took a narrow approach and held that a device must be able to generate random or sequential numbers to qualify as an ATDS, and almost concurrently, the 2nd Circuit took a similar approach in King v. Time Warner Cable.

However, a few months later, in Marks v. Crunch San Diego, the 9th Circuit reinvigorated much of the FCC approach struck down in ACA International. It held that (i) a device with the ability to store numbers, even if they are not randomly or sequentially dialed, is an ATDS, and (ii) even with “human intervention” for picking numbers to call, loading them for dialing, crafting and uploading the message, and scheduling transmission, a device could still be an ATDS.

• This created a split with the 2nd and 3rd Circuits (and, to some degree, the D.C. Circuit) but the Supreme Court denied a petition for certiorari asking it to take up the issue.

In Glasser v. Hilton Grand, the 11th Circuit, after “lamenting” that “clarity … does not leap off this page of the U.S. Code” containing the autodialer definition, held that for a device to be an autodialer, its equipment must involve random or sequential number generation—automatically calling numbers off a stored list does not qualify.

The court also held that, in applications where an operator must push a button to make each call or text transmit, sometimes referred to as “preview dialing” (because the number appears on the screen so that the button to transmit can be pushed), this “human intervention” precludes a device from being an autodialer.

Thus, though both defendants admitted they used sophisticated telephone equipment to make the calls at issue, the 11th Circuit held they did not involve autodialing, and expressly joined with the 2nd and 3rd Circuits in defining “autodialer” narrowly, and explicitly rejected the 9th Circuit’s reasoning in Marks.

Rulings Set Stage for Possible Supreme Court Review

The 11th Circuit’s decision deepens the split between the 9th Circuit and its sister circuits, and arguably makes it more likely the Supreme Court will grant review to resolve this issue. Though it declined to take up Marks, a petition for certiorari from a more recent 9th Circuit decision applying the Marks autodialer defining, in Duguid v. Facebook, is presently pending before the Supreme Court. Alternatively, the plaintiffs in Hilton Grand could seek certiorari, pointing to the 9th Circuit’s decisions as creating a split of authority requiring Supreme Court review.

Meanwhile, the schism between the federal circuit courts extends the considerable confusion about what devices can operate safely outside the TCPA’s ATDS definition as to avoid its consent requirements—and to thus avoid potential exposure that seems to follow autodialer use.

The number of circuit decisions with which Marks disagrees in the wake of Hilton Grand means the 9th Circuit is outnumbered several-to-one; however, the 9th Circuit covers virtually all of the western United States, and contains nearly as many states as the 2nd, 3rd, 11th, and D.C. Circuits combined. The compliance tangle remains, for now, for companies using text- and voice-delivery platforms that may, or may not—depending on the jurisdiction called or texted—constitute an autodialer.