A unanimous three-judge panel of the U.S. Court of Appeals for the Second Circuit, in Duran v. La Boom Disco, Inc., handed a win to the plaintiffs’ bar by holding that the Telephone Consumer Protection Act’s (TCPA) statutory definition of an automatic telephone dialing system (ATDS) includes telephone equipment that can automatically dial phone numbers stored in a list, rather than just phone numbers that the equipment randomly or sequentially generates.  The decision widens a circuit split, with the Second Circuit agreeing with the Ninth Circuit’s broad reading in Marks v. Crunch San Diego and rejecting the narrower ATDS definition adopted by the Third, Seventh, and Eleventh Circuits.   

In Duran, the plaintiff sued La Boom Disco (LBD) claiming that LBD violated the TCPA by sending him hundreds of unsolicited text messages over a period of more than a year.  The numbers to which messages were sent by the online systems used by LBD were generated by and uploaded by humans to the systems.  The district court granted summary judgment to LBD after finding that the online systems it used to send the text messages were not ATDSs because a human determines the time at which the systems sends messages to recipients, thereby requiring too much human intervention to meet the ATDS definition.

Based on the statutory definition, the Second Circuit considered two questions: (1) whether LBD’s texting systems had the “capacity…to store or produce numbers to be called, using a random or sequential number generator”; and (2)  whether the systems had the “capacity…to dial such numbers.”

As to the first question, the Second Circuit concluded that for a dialing system to qualify as an ATDS, “the phone numbers it calls must be either stored in any way or produced using a random-or sequential-number-generator.” (emphasis added).   It ruled that LBD’s systems qualified as ATDS because the numbers to be called were “stored” by the systems and thus not subject to the additional requirement that they be randomly or sequentially generated.  In other words, “the mere fact that the programs ‘store’ the lists of numbers is enough to render them ATDSs.”

As to the second question, the Second Circuit found it necessary to determine “how much [human] intervention is tolerable under the statute before an ATDS becomes a non-ATDS.”  It rejected the district court’s view that “the human-intervention test turns not on whether the user must send each individual message, but rather on whether the user (not the software) determines the time at which the numbers are dialed.’ (emphasis included).  More specifically, the Second Circuit did not agree that the human intervention test turns solely on the timing factor and instead looked at what it means to “dial” numbers without human intervention.

It observed that the verb “to dial,” as now commonly used, refers to “the specific act of ‘inputting’ some numbers to make a telephone operate, and to connect to another telephone.”  In its view, “clicking ‘send’ or some similar button—much like flipping an on switch—is not the same thing as dialing, since it is not the actual or constructive inputting of numbers to make an individual telephone call or to send an individual text message.  Clicking ‘send’ does not require enough human intervention to turn an automatic dialing system into a non-automatic one.”  Because LBD’s systems “only required a human to click ‘send’ or some similar button in order to initiate a text campaign,” the Second Circuit concluded that the systems did not require human intervention to dial and therefore had the second capacity necessary to qualify as ATDSs (namely, the ability to dial numbers automatically on their own).

Accordingly, the Second Circuit held that LBD’s systems were ATDSs because they store lists of numbers and dial those stored numbers without human intervention.  In a footnote, it anticipated criticism that “by relying on an antiquated notion of ‘dialing,’” we are unintentionally defining all smartphones as ATDSs, since clicking on a name in a digital phonebook to make a phone all or send a text message looks the same as clicking ‘send’ to initiate a text campaign.  No inputting of numbers takes place.”  The Second Circuit deemed these actions “quite different”  because “clicking on a name in a digital phonebook to initiate a call or text is a form of speed-dialing or constructive dialing that is the functional equivalent of dialing by inputting numbers.”  In contrast, it observed, someone who clicks on the “send” button in programs such as those used by LBD is not dialing a particular attached number but “is accomplishing a different task altogether: it is telling the ATDS to go ahead and dial a separate list of contacts, often numbering he hundreds or thousands.”

Duran now makes both the Second and Ninth Circuits magnets for TCPA litigation.  The good news is that by widening the circuit split, Duran may propel the FCC to finally move forward in its pending public notice proceeding initiated in 2018 from which further guidance on the ATDS definition had been expected or may result in the U.S. Supreme Court deciding the issue once and for all.