Appeals Court Holds Capacity Not Enough to Meet ATDS Definition for TCPA Violation

The Third Circuit Court of Appeals has upheld a lower court’s ruling in favor of a defendant in a Telephone Consumer Protection Act case involving an automated telephone dialing system. That sentence alone should make you want to read the rest of the article. But it’s the next sentence that is really going to grab you. In issuing its ruling, the Court determined that it’s not enough for the equipment to have the capacity to use a random or sequential number generator to meet the definition of an ATDS; the call must be made using the equipment that produces a random or sequential number generator to be held as a violation of Section 227(b)(1)(A) of the TCPA.

A copy of the ruling in the case of Panzarella v. Navient Solutions can be accessed by clicking here.

If you thought I buried the lede by waiting until the third sentence to get to the crux of what makes this ruling so interesting, the Third Circuit waits until the bottom of Page 29 to drop its bombshell. It uses the preceding 28+ pages to build its case that while the lower court may have erred in how it ultimately ruled in favor of the defendant, it was correct to do so.

“Capacity” has been at the center of many TCPA rulings throughout the years. When the Federal Communications Commission issued its declaratory ruling in 2015 that amended the statute — which ultimately gave us the ruling in ACA International v. FCC — the argument was made that any smartphone could be considered to be an autodialer because it had the capacity to store or produce random or sequential numbers to be dialed.

But looking at how the TCPA was drafted, and taking into account other rulings, including those from the Supreme Court, the Third Circuit ultimately ruled that this is what Congress intended. “… we hold that, for a call to violate section 227(b)(1)(A), that call must employ either an ATDS’s capacity to use a random or sequential number generator to produce telephone numbers to be dialed or its capacity to use a random or sequential number generator to store telephone numbers to be dialed,” the Appeals Court wrote.

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