On November 16, the Ninth Circuit issued a decision affirming the dismissal of a lawsuit on the grounds that to qualify as an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA) the telephone system must randomly or sequentially generate telephone numbers, not just any numbers.
In Borden v. eFinancial, LLC, the plaintiff filed a class action lawsuit claiming that after he provided his phone number to a life insurance company on a website, he began receiving marketing texts from eFinancial. The plaintiff sued under the TCPA, claiming that eFinancial uses a “sequential number generator” to pick the order in which to call customers who had provided their phone numbers. eFinancial argued that its system did not qualify as an ATDS because the TCPA defines an ATDS as one that must generate telephone numbers to dial, not just any number to decide which pre-selected phone numbers to call. The district court granted eFinancial’s motion to dismiss
The Ninth Circuit affirmed relying heavily on the Supreme Court’s decision in Facebook, Inc. v. Duguid, which held that a system does not qualify as an ATDS if the numbers being dialed are from an existing list, such as from a list of customer provided numbers. The plaintiff tried to avoid the narrower definition of ATDS by pointing to footnote 7 in the Supreme Court’s decision. Footnote 7 has been cited repeatedly by plaintiffs arguing for a more expansive definition of ATDS, and earlier this year was considered and rejected by the Ninth Circuit, as we discussed here.
Specifically, the plaintiff relied on the Supreme Court’s statement that, “an autodialer might use a random number generator to determine the order in which to pick phone numbers from a preproduced list.” But the Ninth Circuit found the plaintiff’s interpretation to be myopic. “In reality, [f]ootnote 7 merely addressed how an autodialer could both ‘store’ and ‘produce’ telephone numbers without rendering those two terms superfluous.”
Ultimately, the Ninth Circuit found “the repeated use of ‘number’ in the ATDS statutory definition makes clear, through context, that it must mean a telephone number” and, thus an autodialer must randomly or sequentially generate telephone numbers, not just any number.
This opinion is helpful as it makes clear the Ninth Circuit will follow the Supreme Court’s narrower interpretation of what constitutes an ATDS under the TCPA. Troutman Pepper will continue to monitor developments in TCPA litigation.