The Second Circuit Reverses Course on ATDS Definition by Adopting Broad Interpretation

TCPA Connect

Just a few short months after the Seventh and Eleventh Circuits narrowly interpreted the definition of an automatic telephone dialing system (ATDS), the Second Circuit declined to fall in line, instead adopting the Ninth Circuit’s broad interpretation of an ATDS as set forth in Marks. In Duran v. La Boom Disco, Inc., the Second Circuit weighed in on the issues it had previously declined to address in the King v. Time Warner Cable Inc. case, including whether random or sequential number generation is required in order to make a system an ATDS and whether or what amount of human intervention may prevent a system from constituting an ATDS. In addressing which side of the circuit split it fell on, the Duran court commented in a footnote, “The Ninth Circuit, which we follow here, concluded that an ATDS can, indeed, make calls from stored lists . . . [while] [t]he Seventh, Eleventh, and Third Circuits have concluded otherwise.”

In Duran, the Second Circuit concluded that a program is an ATDS if it has the capacity to store numbers “even [though] the numbers are generated elsewhere, including by a non-random or non-sequential number-generator—such as a person” and the capacity to dial such numbers “on [its] own.”

With regard to human intervention, the court determined that clicking a “send” button, which is similar to “initiat[ing] a campaign,” does not require enough human intervention to prevent a system from being an ATDS. In anticipation of potential backlash, the court specifically distinguished regular smartphones, stating that those devices require someone to click a name in a contact list or type all digits of a number to initiate a call or text, which is a form of speed-dialing or “constructive dialing” that is the equivalent of manually inputting numbers.

Duran specifically involved texting programs called ExpressText and EZ Texting. In order to send a text using the programs, a user must upload numbers to the system either through a direct upload or by gathering numbers that text a short code to opt in. Then, the user can organize the numbers into groups and send mass text messages to the groups. As the Duran district court stated, the system “allows users to send the same message to thousands of people with one click.” Users can either send the messages immediately or schedule the messages to be sent later.

Based on these functionalities, the court concluded, “Having both necessary ‘capacities’ within the meaning of the Telephone Consumer Protection Act, the EZ Texting and ExpressText programs are automatic telephone dialing systems, or ATDSs, under the statute.”

To read the order in Duran v. La Boom Disco, Inc., click here.

Why It Matters: The Second Circuit’s decision comes as a surprise to many, in light of what TCPA defendants considered to be a favorable decision in the King case and the circuit’s reputation for being more friendly to TCPA defendants. While the Second Circuit has now interpreted an ATDS broadly, the decision explicitly excludes all smartphones from the definition’s scope and likely does not encompass systems that have the present capacity to store numbers but cannot dial those numbers “on [their] own.” The Second Circuit’s opinion further widens the divide across the country on the definition of an ATDS, strengthening the likelihood of a showdown before the United States Supreme Court.

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