Why the Fate of the TCPA’s ATDS Definition May Hang on a Comma, Obscure Rules of Grammar, and One Bad Analogy

As long as the TCPAWorld has been spinning it has been subject to much and dire controversy. No controversy is more fundamental—and seemingly less likely—than that of the meaning of the statutory phrase “automated telephone dialing system.” (“ATDS.”)

As statutory definitions go, this one is about as clear and precise as you’re ever going to see. The statute provides that an ATDS is equipment with: i) the capacity to store or produce numbers, using a random or sequential dialer; and ii) to dial such numbers.

Read it once and you understand the meaning of the phrase. Read it twice, or a hundred times, and the conclusion remains the same—this is common English. A device is not an ATDS unless it randomly generates telephone numbers to be dialed—and then dials them—either immediately upon generation, or from storage.

While the law does not always track common sense, here it did—for nearly twenty years, before things became… odd.  For twenty years after the TCPA was enacted in 1991 every court to look at the issue—including the Ninth Circuit Court of Appeal as late as 2009—concluded that the statutory phrase required random or sequential number generation. That is even what the FCC first said to, back in 1992. See  7 FCC Rcd 8752, 8773, 1992 FCC LEXIS 7019, *52-53, 57 FR 48333, 71 Rad. Reg. 2d (P & F) 445 (F.C.C. September 17, 1992) (stating that debt collection calls are not autodialer calls because they are not “dialed using a random or sequential number generator”)

Indeed, the first case departing from the statutory definition did not arise until twenty years after the statute was enacted. See Griffith v. Consumer Portfolio Serv., 838 F. Supp. 2d 723, 727 (N.D. Ill. 2011)(applying 2003 and 2008 predictive dialer rulings for the first time). Notably, Griffith was decided eight years after the FCC first departed from the pure statutory definition in 2003—but once it did, TCPA litigation absolutely exploded.  See WebRecon Stats for Dec 2017 & Year in Review, WebRecon LLC (visually demonstrating the uptick in TCPA filings after 2011).

Since 2011 there have been a number of key developments in TCPAWorld impacting the definition of ATDS—I won’t try to recount them all but you can find most of them here—but the bottom line is that the scope of the statute has been very uncertain for the last few years, as our rolling ATDS review attests. Just over the last few months, however, a majority rule again appears to be developing among courts interpreting the TCPA’s ATDS definition and, perhaps unsurprisingly, the majority rule is the same as the original rule—a system is not an ATDS unless it has the capacity to dial randomly or sequentially. (Although the meaning of the words “capacity” and “system” continue to elude and befuddle on occasion.)

Whether or not TCPAWorld’s new, hard-earned, and undoubtedly fragile peace lasts turns, likely in large measure, on the outcome of a pending appeal to the Seventh Circuit Court of Appeal in Gaedelhak v. AT&T. This particular Court is no stranger to landscape-shifting TCPA rulings. In 2012, the esteemed Judge Easterbrook penned a decision in Soppet that would re-cast the TCPA’s consent defense from a firm and reliable aide for good-faith callers into a game of chance turning on facts—such as who owns a customer’s phone and whether a cell phone might have recycled—entirely outside of a caller’s knowledge. The effects of that stinging decision are still permeating throughout TCPAWorld; even now we await the rollout of the FCC’s reassigned number database that promises to finally close the loophole opened by Soppet 8 years—and hundreds of millions of dollars in unnecessary TCPA settlements– later.

If Soppet was huge, Gadelhak is gargantuan. The outcome of the case might truly (and finally) tip the scales of TCPAWorld for or against TCPA Plaintiffs seeking to sue for “automated” calls. Gadelhak may—like some legendary final battle or apocalyptic monster of myth and lore—set straight the paths and finally yield some element of clarity to the TCPA. It is easy to see why. As shown below, courts within the Seventh Circuit’s footprint have been particularly adept at following the TCPA’s statutory definition:

Look at all those Seventh Circuit district courts applying the statutory definition—plus yet another case as handed down in the last few weeks as well.

If the Seventh Circuit Court of Appeals departs from the statutory framework, therefore, a large body of work by those courts will be undone and such an (unholy?) convergence of the approaches between the Ninth and Seventh Circuits will send a powerful message to other courts weighing ATDS matters. If, on the other hand, the Seventh Circuit stays the course and applies the statutory definition it will be the first Circuit Court of Appeal to directly so hold and such a ruling would seemingly cement the emerging (and common sense) majority position noted above.

In short, Gadelhak is likely a critical inflection point in the TCPA timeline determining whether the statute maintains its juggernaut status or returns, to some degree, to the relative obscurity from which it emerged in 2011. For that reason, everyone should be paying attention to oral argument this Friday.

So what are the arguments of the parties? Well if you believe the Plaintiff, the outcome of this momentous case turns on whether or not you can boil a potato using a knife.

No, I’m serious.

Language is a tricky thing. As philosophers as diverse as Rousseau and Neitchze agree, words are merely approximations for meaning, they lack any essential substance. So all statutes will be vague to some degree. The TCPA’s ATDS definition is pretty clear, but if you stare at it long enough you might start to wonder how a device can “store” phone numbers “using a random or sequential number generator.” I know, I know—the device produces numbers and then stores them. I get it. But if you are a Plaintiff’s lawyer hoping to make millions leveraging the TCPA to sue people contacting their customers using efficient automatic technology, the chances are pretty good you’re going to argue it's impossible to store numbers that way.

That point, believe it or not, is the primary argument advanced by Appellants in Gadelhak. (You can read their Reply brief here if you don’t believe me—Gadelhak Reply Brief) Indeed, it is the basic premise upon which the remainder of the Appellants’ text-based arguments relies. Because—the argument goes—it is impossible to store numbers using a random or sequential number generator, the tell-tale use of a comma after the word produce in the definition does not dictate the interpretive outcome. And to prove it, Appellant argues that you just can’t boil a potato using a knife. He posits:

If a chef tells her prep-cook to “boil or dice the potatoes[,] using a knife, the cook knows he is not supposed to use a knife to boil the potatoes.

The point of the potato argument, I think, is that if it is impossible to store numbers using a random or sequential number generator then it would be acceptable for Congress to misplace the comma in statute because—hey, we all know you can’t boil a potato using a knife, right?

Ok.

This analogy is odd for a number of reasons. Obviously, the Chef’s instructions are poor and disorderly. Setting aside how dicing or boiling a potato could ever be equally acceptable outcomes to an actual chef (I mean, come on), the proper instruction would presumably be “to boil the potatoes, or dice them using a knife.” See how the comma is placed to properly suggest that boiling the potato is a complete and separate thought tied to the second fragment by context?

It’s the same with the TCPA. If Marks were correct, of course, the comma would come after the word “store” not after the word “produce.” So the potato analogy actually backfires—it only demonstrates the point Plaintiff desires if we assume the chef is misusing the English language, which is precisely the point AT&T is urging on appeal— Plaintiff’s ATDS definition is only accurate if we ignore basic rules about how commas work.

That’s the obvious stuff. But let’s get a smidge more esoteric since—you know—the fate of TCPAWorld turns on a chef’s instructions about potatoes.

The second big argument Plaintiff advances is that the word “store” is superfluous in the TCPA if the statutory definition is applied. In his view, “it does no work whatsoever because the hypothetical system already qualifies as an ATDS, given that it (A) produces numbers using a random or sequential number generator and (B) automatically dials those numbers.” And the law hates statutory interpretations that make words superfluous. Again, there is an easy response—but let’s focus on the tricky stuff. Let’s use the potato example again.

In the potato example the chef tells the cook to take his pick—he can boil the potato or he can dice it. But if he dices it, he must use a knife.

Pause.

How else can you dice a potato?

While the chef’s instructions are grammatically incorrect for the reasons identified earlier, they also contain an unnecessary element—why include the word “with a knife” in the instruction at all?  There is no other way to dice a potato.

The phrase “with a knife,” therefore, is actually superfluous if we are focusing solely on dicing potatoes—there is no other way to do it. So the knife component of the instruction must –if we are interpreting the instruction like a statute—modify the “boil” component of the instruction. That is, the chef’s instruction is literally that the cook must use a knife regardless of whether he is boiling or dicing the potato. Otherwise not only is the comma in the wrong place, the reference to the knife is wholly superfluous.

Turning back to the TCPA –are there any other ways to produce numbers other than randomly or sequentially? That is, when the statute says that an ATDS must produce numbers randomly or sequentially, isn’t that a given from the word “produce” to begin with? How else can a system “produce”—that is, bring into creation—numbers to be dialed rather than in sequence or randomly?

Perhaps there’s a response to that too—again language is tricky—but it seems to me that the phrase “using a random or sequential number generator” necessarily refers to numbers that are “stored” to be dialed. There are many ways to store numbers. Yet there is—in my view—only two ways numbers can truly be “produced” in the first instance. So the phrase “using a random or sequential number generator” is superfluous unless it references how numbers stored to be dialed came to be stored. Accordingly, the rule against superfluous language actually compels—rather than erodes—a determination that the TCPA’s ATDS definition only applies to numbers that are stored after random or sequential generation. And the potato analogy backfires again.

But set all of that aside. Look at the statute. Here is what it looks like:

Actual Statute

(1)The term “automatic telephone dialing system” means equipment which has the capacity—

(A)to store or produce telephone numbers to be called, using a random or sequential number generator; and

(B) to dial such numbers.

Here is what it does not look like:

Plaintiff’s Make-Believe “Dice-the-Potatoes” Statute

(1)The term “automatic telephone dialing system” means equipment which has the capacity—

(A)to store, or produce telephone numbers to be called, using a random or sequential number generator; and

(B) to dial such numbers.

And here is what the TCPA really does not look like:

How the Statute Would Actually Read if Congress Intended the Marks Approach

(1)The term “automatic telephone dialing system” means equipment which has the capacity—

(A) to store and dial numbers; or

(B) to produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers.

If Plaintiff is correct as to the meaning of the statute the last example is how Congress w/could have drafted the TCPA to expressly say so. That is just proper English, and there is no reason to believe it would be difficult to come up with this clear-cut definition. (It took me less than five seconds to draft it, and I’m barely even a genius.)

Not only did Congress not adopt the easily-created definition Plaintiff urges, Congress did not even adopt the middle-of-the-road “dice my potatoes” definition Plaintiff analogizes in his brief. Instead, it adopted a clear and narrow definition that can really only mean one thing, as courts consistently found for twenty years. That, at long last, is why we finally have a majority ATDS position again in TCPAWorld.

And that’s not small potatoes.

Let’s hope it stays that way after Gadelhak.

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