Third Circuit Inflicts Blow to TCPA Lawsuits

Published On June 29, 2018 | By Michelle Anderson, Anna Hsia, Nick Jackson and Jeff Landis | General, Litigation
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Following the D.C. Circuit’s narrowing of the FCC’s broad definition of an autodialer in its 2015 Omnibus TCPA Declaratory Ruling and Order (“Omnibus Order”), the Third Circuit has ruled that a dialing system must have actual and present capacity to generate random or sequential numbers in order to be considered an autodialer under the TCPA. Systems that require modifications to be able to generate random or sequential numbers are not considered autodialers. The decision strikes yet another blow at the FCC’s interpretation of autodialer as encompassing any device with the mere “potential” capacity to dial automatically. Requiring actual and present capacity may materially reduce risks for companies engaging in phone or text message communications.

The plaintiff had obtained a reassigned phone number, which had been enrolled in text message alerts every time the prior owner of the phone number received an email. At issue was whether the defendant used an autodialer in the transmission of the text messages. The Third Circuit ruled that no autodialer was used, since the only evidence submitted by the plaintiff were expert reports opining on whether the dialing equipment had the “latent or potential capacity” to autodial messages—not whether the equipment had the actual or present capacity to dial automatically.

On the basis of the D.C. Circuit’s decision in ACA International, and finding no merit in the plaintiff’s “speculative” expert reports, the Third Circuit stated that the plaintiff “cannot point to any evidence that creates a genuine dispute of fact as to whether the Email SMS Service had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.” Therefore, the district court was correct in excluding the plaintiff’s expert reports and granting summary judgment in favor of the defendant.

This Third Circuit decision is welcome news for companies using calling or text messaging systems that are not presently capable of generating random or sequential numbers. Companies making phone calls or text messages should analyze their dialing equipment to ensure they are not presently capable of dialing automatically. It is unclear how the FCC will respond to the Third Circuit’s and D.C. Circuit’s decisions, but we expect that any new regulations will be more favorable to businesses.


About The Authors

Michelle Anderson counsels clients on a range of privacy, security, and consumer protection matters. She works closely with clients to understand their goals and risk profiles to help develop strategies for compliance with domestic and international privacy and security laws and regulations.

Anna Hsia maintains a diverse practice litigating complex business disputes and counseling clients on privacy issues. With broad litigation experience in unfair competition, false advertising, class actions, and other complex litigation, Anna guides clients through disputes in federal and state courts. As a Certified Information Privacy Professional, Anna has assisted clients with product development and compliance with privacy regulations such as the TCPA, HIPAA, COPPA, state-specific privacy regulations, the Gramm-Leach-Bliley Act, and the Fair Credit Reporting Act.

Nick’s practice focuses on representing clients in complex litigation in federal and state courts, including the defense of class action lawsuits. Nick has represented clients in matters involving federal privacy statutes, constitutional privacy rights, intellectual property, contractual disputes, and federal and state securities laws. He also assists clients in responding to investigations by federal and state regulators, as well as handling demands for user data. In addition, he has counseled clients on the privacy, intellectual property and litigation-related aspects of significant commercial transactions.

Jeff’s practice focuses on representing clients in litigation and government investigations, with a particular focus on defending companies in complex class action lawsuits. He also assists clients in responding to formal investigations and informal inquiries conducted by the FTC, DOJ and states’ Attorney General Offices. Jeff has extensive experience in all aspects of civil litigation, including serving as trial counsel for both plaintiffs and defendants in matters pending before judges, juries, and arbitration panels.