ACA International Heavily Influences District Court's Holding Defendant Did Not Use ATDS

Herrick v., LLC, No. CV 16-00254-PHX-DJH, 2018 WL 2229131 (D. Ariz. May 14, 2018)


In 2015, Defendant contracted with a third-party web-based software application company called 3Seventy to send a one-text marketing campaign to nearly 100,000 customers. To conduct the campaign, Defendant had to provide 3Seventy with a list of customer phone numbers, which Defendant did via an FTP site. 3Seventy then uploaded the list of numbers to its Platform after which time, Defendant navigated the website, manually logged onto the Platform and determined the numbers to which it wanted to send the text message. The text was created by manually typing in the message and selecting a time and date that the message would be sent. As a final step, Defendant had to type a "captcha" - here twelve alphanumeric values - to approve and authorize sending the text. Purportedly offended by receiving the single text, Plaintiff filed a putative class action, alleging the text violated the Telephone Consumer Protection Act (TCPA). Defendant moved for summary judgment, arguing Plaintiff could not state a claim because the text was not sent using an Automatic Telephone Dialing System (ATDS).


Holding that Defendant did not use an ATDS to send the text at issue, the Court noted that:

One of the issues that has repeatedly been raised is whether a device can qualify as an ATDS even though the device itself does not have the capacity to generate numbers randomly or sequentially. The FCC's guidance on these queries became increasingly muddled after it determined that "predictive dialers" should be included in the definition of an ATDS. Commonly used by telemarketers, predictive dialers are devices that among other things, dial numbers from preprogrammed lists as opposed to numbers that are randomly or sequentially generated.

Pointing to the D.C. Circuit Court of Appeals' holding in ACA Int'l v. FCC, 885 F.3d 687 (D.C. Cir. 2018), the Court cited the Court of Appeals recognition that the FCC had failed to clarify "'whether a device must itself have the ability to generate random or sequential telephone numbers to be dialed'" or whether it is "'enough if the device can call from a database of telephone numbers generated elsewhere.'" Equally important was the Court of Appeals statement that the FCC seemed "'to be of two minds on the issue,'" on the one hand implicitly suggesting a device that does not randomly or sequentially generate numbers and dial would not qualify as an ATDS, but in other respects suggesting equipment can meet the statutory definition even if it does not have the ability to generate and dial random or sequential numbers.

Thus, "[a]s a result of the D.C. Circuit's holding on this issue, th[e] Court w[ould] not defer to any of the FCC's 'pertinent pronouncements' regarding the first required function of an ATDS, i.e., whether a device that has the capacity to store or produce telephone numbers 'using a random or sequential number generator,'" adding that "[b]roadening the definition of an ATDS to include any equipment that merely stores or produces telephone numbers in a database would improperly render the limiting phrase "using a random or sequential number generator" superfluous.

After reaching this conclusion, the Court concluded that the 3Seventy Platform did not have the ability "to store or produce numbers to be called, using a random or sequential number generator." Numbers that were called could only be inputted into the 3Seventy Platform by a preprogrammed file or list provided by the user; the Platform could not randomly or sequentially generate these numbers by itself. Moreover, although it may be theoretically plausible that the 3Seventy Platform could be reprogrammed to have this capacity, it is undisputed that to enable such capability, a user would have to do much more than simply press a button.

Human Intervention

The Court further noted that even if the inability to randomly or sequentially generate telephone numbers did not disqualify the 3Seventy Platform as an ATDS, the inability to dial numbers without human intervention would. Specifically, the Court recognized the FCC's repeated confirmation that the defining characteristics of an ATDS is the "ability to dial numbers without human intervention," adding that the ACA Int'l court found that such an interpretation "'makes sense given that 'auto in dialer-or equivalent, 'automatic' in 'automatic telephone dialing system,' []-would seem to envision non-manual dialing of telephone numbers'" and that "the FCC's rejection of the human intervention test [is] ' difficult to square' with its prior pronouncements regarding an autodialer's 'basic functions.'"

Noting that what constitutes the amount of "human intervention" required to take a device out of the category of an autodialer is a mixed question of fact and law, the Court concluded that Defendant identified multiple stages in the process of sending Plaintiff the text message in which human intervention was involved. First, an employee of Defendant provided 3Seventy with a list of customer phone numbers via its FTP site, which 3Seventy then uploaded to the Platform. The employee then navigated to the website, logged on the 3Seventy Platform, and selected the customer numbers to which Defendant wished to send the text message. The employee then drafted the message and selected a time and date to send the message. Finally, the employee entered a "captcha" - a device designed to ensure that a human, not a robot was authorizing the desired message.

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