The Second Circuit Court of Appeals Expands the Definition of an ATDS; Sending Texts to Stored Numbers by Clicking “Send” Regulated By TCPA

By April 9, 2020 Financial Services

The “new normal” of having a majority of Federal Circuits interpreting the term “automatic telephone dialing system” (ATDS) in the Telephone Consumer Protection Act (TCPA) narrowly in order to limit the scope of the TCPA did not last long. On April 7, 2020, the Second Circuit in Duran v. La Boom Disco, Case No. 19-600-cv, (2nd Cir. 2020), expanded the scope of the TCPA beyond Marx v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018).

To level set, the often-litigated issue under the TCPA is what qualifies as an ATDS. The TCPA provides that a dialing system is an ATDS if it has two concurrent capacities. First, it must have the capacity to “store or produce telephone numbers to be called, using a random or sequential number generator.” Second, it must have the capacity to dial such numbers.

In Duran, the defendant sent blast text messages to Duran (and hundreds of others simultaneously) without the appropriate consent using two online systems: the ExpressText and EZ Texting Programs. By focusing only on the second capacity identified above, whether the platforms automatically dialed the numbers, the district court determined the platforms were not ATDSs. In holding that the platforms were not ATDSs, the district court found the “human intervention” needed to select numbers and submit “start” to initiate a campaign (i.e., a person and not a computer decided when and to whom to send a text) was sufficient to deprive the platforms of their “automated” character.

The Second Circuit disagreed with the district court, finding that the platforms were ATDSs because they had both the capacity to store numbers and to dial them automatically. Regarding the first capacity necessary to be an ATDS, the Second Circuit expanded the scope of an ATDS by limiting “using a random or sequential number generator” to modify only the production of stored numbers. That is, dialing from a stored list of numbers is enough.

But the most important aspect of the ruling may be its new “human intervention” test. Duran sets forth a new test in the Second Circuit (governing lawsuits filed in federal courts in Connecticut, New York and Vermont), where equipment has the capacity to dial numbers automatically — and thus the equipment has the second capacity necessary to be an ATDS — if it “can dial numbers on their own.” It is irrelevant that a person clicks, or presses “send” or an equivalent button in a text message platform if that only instructs the system to dial the numbers in the campaign. According to the Second Circuit, that is not the functional equivalent of dialing numbers, which it defines as the actual or constructive inputting of numbers to make an individual telephone call or to send an individual text message.

What does this ruling mean going forward?

  1. Always have the appropriate consent under the TCPA so you don’t need to worry about how you dialed the numbers at issue.
  2. There ultimately will be a spike in TCPA lawsuits filed in the Second Circuit.
  3. Courts across the county will be pressed to adopt the Second Circuit’s definition of automatic dialing.
  4. Assuming the pandemic weakens, the United States Supreme Court will review the constitutionality of the TCPA in 2020, and as part of its ruling it can narrow the definition of an ATDS to only equipment that make use of random and sequential number generators.

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