gavel and question markLate June was busy in the Telephone Consumer Protection Act (TCPA) litigation world, with the U.S. Courts of Appeals for the Second and Third Circuits weighing in on an issue that arises all the time with the TCPA – what is and is not an autodialer. As readers of this blog know, earlier this year in ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018), the D.C. Circuit set aside the FCC’s interpretation of “automatic telephone dialing system” (ATDS) as it was defined in the FCC’s 2015 TCPA Order, however, the court left open the issue of how to define an ATDS. Now, two other Circuits have jumped into the mix, with opinions showing that defining what constitutes an ATDS is easier said than done.

In King v. Time Warner Cable, Case No. 15-2474-cv, 2018 U.S. App. LEXIS 17880 (2d Cir. June 29, 2018), the plaintiff received 153 collection calls from Time Warner Cable through its “interactive voice response” calling system, which automatically identified customers whose accounts were 30 days past due, called their telephone numbers, and left prerecorded messages if there were no answers. There was no dispute that the defendant’s calling lists were not created by a human; in fact, there was no human involvement at any stage of the customer selection, list compilation, or dialing processes.

The plaintiff in Dominguez v. Yahoo, Inc, No. 17-1243, 2018 U.S. App. LEXIS 17350 (3d Cir. June 26, 2018) received alleged automated text messages at a reassigned telephone number that previously had been used by a Yahoo Email SMS Service subscriber. The plaintiff received text messages from Yahoo every time the prior telephone subscriber received an email, resulting in approximately 27,800 text messages over the course of 17 months.

The key question in both cases was whether the respective dialing platforms were autodialers. The Second Circuit in King analyzed whether Time Warner Cable’s platform was an autodialer under the TCPA by asking whether the device had the current “capacity” to perform the functions of an autodialer. The court held that the “term ‘capacity’ is best understood to refer to the functions a device is currently able to perform, whether or not those functions were actually in use for the offending call, rather than to devices that would have that ability only after modifications.” The Second Circuit vacated the district court’s partial summary judgment and statutory penalties award to the plaintiff, and remanded the autodialer question back to the lower court. The Second Circuit thus followed the D.C. Circuit’s ACA Int’l opinion in rejecting the “potential capacity” ATDS definition, but the King opinion fell short of defining the specific functionalities that distinguish between “current” and “potential” capacity.

The Third Circuit took a narrower view of what constitutes an ATDS and tackled the functionality issue head-on, holding that a dialer that calls from a list of numbers “individually and manually inputted into its system by a user” is not an ATDS unless it has the present ability to randomly or sequentially generate numbers and dial them. The Third Circuit test is the first encapsulation of the functionality requirements of an ATDS, offering a welcome bright line to industry and litigants alike.

It remains to be seen how other courts grapple with the ATDS definition in the wake of ACA Int’l. We continue to monitor developments in TCPA litigation and a list of recent TCPA actions can be found here.