Another Appeals Court Rules on What Defines ATDS Under TCPA

Joining a growing number of other Appeals Courts lining up against the Ninth Circuit, the Seventh Circuit Court of Appeals has affirmed a lower court’s ruling that technology that does not have the capacity to generate random or sequential numbers does not meet the definition of an automated telephone dialing system under the Telephone Consumer Protection Act.

A copy of the ruling in the case of Gadelhak v. AT&T Services can be accessed by clicking here.

The ruling in Gadelhak by the Seventh Circuit closely follows a ruling in a similar case that was decided last month in the Eleventh Circuit Court of Appeals — Glasser v. Hilton Grand Vacations. Those rulings conflict with what the Ninth Circuit Court of Appeals ruled in Marks v. Crunch San Diego regarding how an ATDS is to be defined.

As in the other cases, the issue is a grammatical. The TCPA defines an ATDS as equipment that has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator. What is causing the conflict in the courts is whether “using a random or sequential number generator” applies to equipment that “stores” or “produces” telephone numbers or applies to equipment that does both. The Ninth Circuit in Marks ruled that the phrase applies to one or the other. But the Eleventh and now the Seventh Circuits have ruled that the phrase has to apply to both, and if the equipment does not store or produce numbers using a random or sequential number generator then it is not an ATDS.

Under the TCPA, it is against the law to contact an individual on his or her cell phone using an ATDS without first obtaining consent to do so. So whether a piece of equipment or technology meets the definition of an ATDS usually means the difference between being able to contact individuals on their cell phones or not being able to do so.

Admitting that there are four possible ways to read the definition of an ATDS in the TCPA, the Seventh Circuit walks through each definition before arriving at what it feels is the correct one: “It is admittedly imperfect. But it lacks the more significant problems of the other three interpretations and is thus our best reading of a thorny statutory provision. We therefore hold that the phrase ‘using a random or sequential number generator’ describes how the telephone numbers must be ‘stored’ or ‘produced.’ “

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