Use of External Component or SQL Server with Dialing System May Not Qualify as an ATDS

TCPA Connect

Panzarella v. Navient Solutions, CIVIL ACTION NO. 18-3735, 2020 U.S. Dist. LEXIS 104746 (E.D. Pa. June 16, 2020)

In the latest Telephone Consumer Protection Act (TCPA) ruling, a Pennsylvania district court has rejected the theory proposed by two plaintiffs regarding Navient Solutions: A dialing system that uses external databases to store and randomly and sequentially generate number tables to then pass on to the actual dialing system should qualify as an automatic telephone dialing system (ATDS).

The TCPA, in part, prohibits calls made to a person’s mobile phone using an ATDS without the called party’s prior express consent. The TCPA defines an ATDS as “equipment that has the [present] capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

In this case, the defendant’s ININ dialing system relied on external components to meet the TCPA definition of an ATDS, including a Microsoft SQL database management system (SQL database) hosted on a Microsoft SQL server to (1) store and sort telephone numbers associated with customer accounts and (2) generate random or sequential number tables. The ININ dialing system was capable of dialing such numbers only after importing the number tables from the SQL database.

The court found the Microsoft SQL server to be distinct from the ININ dialing system, thereby rendering the ININ dialing system incapable of storing or producing telephone numbers to be called using a random or sequential number generator.

The plaintiffs argued that the ININ dialing system and the Microsoft SQL server were one system, and therefore an ATDS, because the former system relied on the latter system’s ability to store, organize and transfer to it randomly or sequentially generated numbers. Therefore, by virtue of the Microsoft SQL server being a “necessary component” of the dialing system, the plaintiffs argued that the ININ dialing system had the present capacity to dial randomly or sequentially generated numbers. The defendant, on the other hand, argued that the Microsoft SQL server was its own system, separate from the ININ dialing system.

In finding the Microsoft SQL server to be distinct from the ININ dialing system, and the court took the following concerns and facts into consideration:

1. The Microsoft SQL server is a widely used database technology system.

The court considered the fact that SQL servers are one of the most popular enterprise database technology systems in use, recognizing that, as such, a finding for the plaintiffs could risk “a far-reaching and overly-broad interpretation of systems that may be considered ATDSs.” In its assessment, the court looked to the reasoning behind the D.C. Circuit’s rejection of the Federal Communications Commission’s broad interpretation of an ATDS, in which any smartphone would qualify as an ATDS due to its ability to download any requisite application.

2. The SQL database was housed on a server physically separate from the ININ dialing system server.

The court commented on the fact that the ININ dialing system required a third-party database management system, and that the defendant opted to configure its third-party SQL database to run on its dedicated hardware—a Microsoft SQL server. In its assessment, the court noted that a database server “housed in separate hardware suggests that it should be considered a distinct system.”

3. The ININ dialing system needed to import phone numbers from the SQL database to make calls.

The only way for the ININ dialing system to place calls was to import the numbers to be called from the SQL database. The court took this fact to suggest that such was a transfer of information made from “one system to another.”

To access the full opinion, click here.

Why It Matters

The Panzarella case provides important takeaways for those trying to navigate the applicability of the TCPA’s consent requirement. It provides a logical end point as to additional components of “equipment” which are necessary to enable the dialing system to place calls, thereby providing guidance on how to mitigate risk when designing your dialing system architecture.

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