Seventh Circuit Doubles Down on Gadelhak in Advance of SCOTUS ATDS Ruling

TCPA Connect

Rather than wait for the Supreme Court to weigh in on the proper definition of an automatic telephone dialing system (ATDS), the U.S. Court of Appeals for the Seventh Circuit refused to revive a Telephone Consumer Protection Act (TCPA) action against Regions Bank, ruling that the district court properly granted summary judgment in the bank’s favor based on existing Seventh Circuit case law.

The case is Jackson v. Regions Bank. The plaintiff, Calvin Jackson, accused the bank of calling him on his cellphone about his overdrawn account beginning in November 2015. According to Jackson, he did not consent to be called by Regions and, if he had, expressly and repeatedly revoked his consent. Despite his purported revocation, he claimed the bank continued to call him using an ATDS and/or an artificial or prerecorded voice in violation of the TCPA.

Regions removed the case to federal court. Before the initial pretrial conference, the judge required that the parties jointly submit a proposed case management plan that included “a statement of the claims” Jackson intended to prove at trial.

Jackson’s statement of claims were defined as “Plaintiff revoked consent … for Defendant to call his cellular phone,” “Defendant continued to place such calls after consent was revoked …” and “Defendant used an [ATDS] to place such calls.” The court approved the plan.

After discovery, Jackson moved for partial summary judgment. Regions responded that the Seventh Circuit’s seminal 2020 decision in Gadelhak v. AT&T Services, Inc. foreclosed the plaintiff’s claim.

In Gadelhak, the Seventh Circuit held that only a system with “the capacity to generate random or sequential numbers” meets the definition of an ATDS, while a tool that merely dials numbers from a customer database does not qualify.

In Mr. Jackson’s case, because the undisputed evidence the parties uncovered during a bifurcated discovery period demonstrated that Regions’ dialing system did not generate numbers at random, instead dialing from a list of customers’ numbers, Jackson’s claim should be dismissed, the bank told the trial court in the Southern District of Indiana. The district court agreed and entered judgment in favor of Regions.

Jackson appealed. He argued that Regions used a prohibited ATDS because—unlike the system at issue in Gadelhak—“human intervention” is not required for Regions’ system to dial a given number. The Seventh Circuit disagreed.

“New or old, Jackson’s argument is a nonstarter,” the panel wrote. “As we explained in Gadelhak, the defining feature of an [ATDS] is not how the numbers are dialed; it is how the numbers are stored and produced. And, like the system in Gadelhak, Regions’ system dialed from a preset list (of numbers of its delinquent account holders), not at random.”

While Jackson tried to persuade the court that Gadelhak was wrongly decided by citing to contrary authority from other federal courts pointing to a 2003 Federal Communications Commission (FCC) order, the Seventh Circuit reiterated that it was not bound by the order because the D.C. Circuit struck it down in 2018’s ACA International v. FCC.

“Further, we expressly rejected the Commission’s definition, which required a ‘significant judicial rewrite’ of the statute and resulted in ‘far reaching consequences,’” the panel said. “Jackson gives us no reason to revisit the issue.”

Finally, the Seventh Circuit declined to allow Jackson to pursue his artificial/prerecorded voice theory after he omitted it from his statement of claims in the district court. “Only after Gadelhak doomed the dialing-system claim did Jackson seek to revive the voice theory, arguing that it was ‘implied’ all along by his allegations that Regions called him without his consent,” the panel wrote. “Implication did not suffice, the court concluded, and we give ‘considerable weight’ to that conclusion.” Thus, the Seventh Circuit affirmed.

To read the order in Jackson v. Regions Bank, click here.

Why it matters: The Jackson decision stands as a strong reaffirmation of the Seventh Circuit’s ruling in Gadelhak, although the panel noted that the Supreme Court will soon weigh in on the definition of an ATDS in the Facebook Inc. v. Duguid case. The panel considered whether to hold its decision pending the Court’s ruling, but decided the best approach was to decide the case and let Jackson pursue relief if the justices reach a contrary conclusion. Significantly, Gadelhak was written by then-Seventh Circuit Judge and now Associate Justice Amy Coney Barrett, who will soon be weighing in on the proper ATDS definition when the Supreme Court issues its long-awaited and soon-forthcoming decision in Duguid, which could be issued any day now.

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