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28 February 2020
Slowly but surely, the U.S. Courts of Appeal increasingly agree on how to interpret the definition of "automatic telephone dialing system" ("ATDS" or "autodialer") in the Telephone Consumer Protection Act ("TCPA"). On February 19, 2020, a unanimous Seventh Circuit panel refused to revise a putative class action in Gadelhak v. AT&T Services, Inc. after concluding that the dialing system used by AT&T did not qualify as an autodialer. Like the Eleventh Circuit in Glasser v. Hilton Grand Vacations Company, LLC and Third Circuit in Dominguez v. Yahoo, Inc., the Seventh Circuit held that an "autodialer" must use "a random or sequential number generator" to either store or produce numbers. Because the system used by AT&T simply pulled numbers from a database, the court found that the system was not an autodialer and the texts did not violate the TCPA.
The TCPA defines an "automatic telephone dialing system" as "equipment which has the capacity─(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." Because of the definition's awkward structure, the key to interpreting the statute lies in determining which word(s) Congress intended the phrase "using a random or sequential number generator" to modify.
The Seventh Circuit identified four possible ways to read the statute. Though it acknowledged the interpretation it settled on was imperfect, the court emphasized that such an approach was the most natural "based on sentence construction and grammar" and therefore offered the best result. The four possible interpretations are:
The Gadelhak opinion may signal a growing consensus in the courts of appeal. Within 24 hours of the Seventh Circuit's decision, a defendant with a similar case pending before the Ninth Circuit asked the court to reevaluate its precedent in light of the new ruling. If the Ninth Circuit doubles down on Marks, it may increase the likelihood that the Supreme Court will weigh in to resolve the question.
For further information on this topic please contact Mark W Brennan, Arpan Sura or John W Castle at Hogan Lovells by telephone (+1 202 637 5600) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org).The Hogan Lovells website can be accessed at www.hoganlovells.com.
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