There has been an increase in the amount of litigation under the Telephone Consumer Protection Act (TCPA). This is likely due to an increase in the use of marketing to mobile phones. Since there has been a growth of technologies that easily reach smartphone users, compliance has become difficult since the rules are increasingly complex and unclear. So while companies are striving to offer their users more services to facilitate communications and streamline transactions, they are also concerned about misinterpreting provisions of the TCPA and facing a lawsuit.
Generally, there are three elements to a TCPA claim:
1. Whether the defendant called a cellular telephone number;
2. Was an automatic telephone dialing system (ATDS) used; and
3. Was there prior express consent from the recipient?
Under 47 U.S.C. § 227(a)(1), ATDS equipment has the capacity to “store or produce telephone numbers to be called” through the use of either a random or sequential number generator, and can dial those numbers. Regardless of whether the ATDS is used to store, produce, or call the generated numbers, it only matters that it has the capacity to do so. There is a current debate about what capacity means, whether it is theoretical capacity or actual capacity at the time the message was transmitted.
An expansive view of what qualifies as use of an ATDS was decided in a recent Illinois district court decision. In Sterk v. Path, Inc., there was a dispute that arose when Path, Inc., a social network company, allegedly sent the plaintiff an unsolicited promotional text message. The court ruled in this case that regardless of whether the equipment actually made the call using a random or sequential number generator, the equipment used to send the text message was an ATDS.
In coming to this decision, the Illinois court relied on FCC decisions that stated that ATDSs could include predictive dialing equipment that automatically dials numbers without human intervention from a stored list. This applies even if the equipment lacks the capacity to dial the telephone numbers through the use of a random or sequential number generator. This makes the main requirement the capacity to “dial numbers without human intervention,” rather than the capacity to generate random or sequential numbers.
Since the equipment Path, Inc. used could send messages from a stored list with no human intervention, it was comparable to predictive dialers the FCC considers and ATDS.
Several other courts have adopted a more restrictive view, including the Ninth Circuit. These courts have held that whether the equipment used to place a call is an ATDS is determined by whether it could be used to store or produce phone number through the use of a random or sequential number generator. The determination is not made based on whether the equipment was actually used in this manner to make the call or send a text message.
In the case Hunt v. 21st Mortgage Corp., the District Court for the Northern District of Alabama ruled that for a telephone system to be covered by the TCPA, it must, at the time the calls at issue in the case were made, have the capacity to store or produce numbers using a random or sequential number generator, without “substantial modification or alteration” even if the automatic dialing capacity was not used. If the system does not have this present capacity, then the sender is not liable under the TCPA. A California state court agreed with this limitation in the case Stockwell v. Credit Management, L.P.
Some decisions have been very expansive in defining ATDS, while others have limited the scope. However, without clear guidance from the FCC, each court will continue to makes its own interpretation of ATDS.
Our experienced attorneys here at Krohn and Moss Consumer Law Center have also provided many helpful resources regarding the Fair Debt Collection Practices Act and how debt collectors should act. For more information, click here to learn more about this act and how it can help you.
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