What a lovely day.

Finally, at long last, the Ninth Circuit Court of Appeals has spoken directly, clearly–and dare I say, correctly!–on the critical ATDS definition found within the TCPA.

So, yes, it is finally safe to go back in the water. At least on the west coast.

And what makes this victory SO MUCH SWEETER, of course, is that it was the Ninth Circuit COA that blew up the TCPAWorld back in Sept. 2018 with its ruling in Marks. 

Marks had held that–despite the plain language of the TCPA–the TCPA’s ATDS definition applied to any system that dialed automatically from a list of preprogrammed numbers. The Supreme Court later rejected that approach in Facebook but left open the possibility that systems that use an ROSNG to “store” phone numbers might still be an ATDS–and that included systems that used an ROSNG to determine the sequence in which numbers are dialed.

Well in Borden v. Efinancial, LLC, 2022 WL 16955661 (9th Cir. Nov. 16, 2022) the Ninth Circuit Court of Appeals categorically rejected the notion that a system is an ATDS merely because it uses automation to determine the sequence in which numbers are dialed:

We hold that an “automatic telephone dialing system” must generate and dial random or sequential telephone numbers under the TCPA’s plain text.

And boom. ATDS cases are DEAD in the Ninth Circuit’s populous footprint (that includes all of California, Oregon and Washington.)

To be sure, most folks were already in agreement that ATDS cases are essentially dead. Josh Swigart–joining the TCPAWorld team on Deseve to Win Ep. 6–had said as much.

On the other hand, Adrian Bacon–Deserve to Win Ep. 4–had taken exactly the opposite approach. Arguing that FN7 of the Facebook ruling left meat on the bone. (And I lectured him for it.)

Well the Ninth Circuit rejected any reading of the ATDS definition that would permit systems that merely store numbers using an ROSNG to be subject to the TCPA.

The Ninth Circuit applies an interesting textualist analysis of a sort I haven’t seen before. Essentially the Ninth Circuit says that when the TCPA uses the word “number” it actually means “phone number”:

First, the structure of the sentence suggests that “number generator” modifies “telephone numbers to be called.” ere, “to store or produce telephone numbers to be called” is dependent on the clause “using a random or sequential number generator.” This means that “using a random or sequential number generator” modifies the phrase “to store or produce telephone numbers to be called.” Thus, it makes the most sense that the “number” referred to in the modified clause is the same as the “numbers” in the dependent clause—both are referring to telephone numbers.

Pause.

Yes, the courts are back to applying the rules of grammar to the TCPA’s ATDS definition. Yet this is now the THIRD way courts have applied those rules to interpret the same clause. This tells me either that appellate court clerks lack the grasp of grammar possessed by a Fifth Grade teacher or else that the rules of English grammar are more like guidelines than anything else.

The Court goes on:

Second, the repeated use of “number” in the autodialer statutory definition makes clear, through context, that it must mean a telephone number. The definition’s first use of numbers is “telephone numbers.” 47 U.S.C. § 227(a)(1)(A). This sets the stage and provides context for the other uses. The third and last time that the definition uses “numbers” is referential: it defines an autodialer as equipment with the capacity to dial “such numbers.” Id. § 227(a)(1)(B) (emphasis added). This invocation of numbers must mean telephone numbers because it would make no sense to dial the randomly generated number if it were not a telephone number. The common understanding of the verb “to dial” in the context of a statute about phone calls is inputting telephone numbers into a phone to make a call. It would be illogical, or very poor legislative drafting, first explicitly to invoke phone numbers, then next to refer to other non-telephone numbers, and then finally to go back to phone numbers by calling them “such numbers.” A word is interpreted in the context of the company it keeps. See Gustafson v. Alloyd Co., 513 U.S. 561, 575, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995). Presumably, Congress did not intend to create a confusion sandwich, and instead used the word “numbers” to mean telephone numbers throughout the definition.

Congress intended to avoid a “confusion sandwich” with the TCPA’s ATDS definition?

Ha.

Ha.

Ha.

Ha.

Ha.

Ha.

Ha.

Ha.

Ha.

Ok. I’m back.

Third, the TCPA uses both “telephone number” and “number” interchangeably throughout the statute to mean telephone number, suggesting that in the definition section all uses of “number” mean telephone number. For example, in the section on the Do-Not-Call Database, the statute first prohibits making a solicitation “to the telephone number of any subscriber included in such database.” 47 U.S.C. § 227(c)(3)(F). Shortly after that, the statute explains that regulations of the database must “specify methods for protection of the privacy rights of persons whose numbers are included in such database.” Id. § 227(c)(3)(K). This second subsection refers to telephone numbers because (much like it does not make sense to dial non-telephone numbers) it makes no sense that people would have non-telephone numbers that they would want placed in a Do-Not-Call Database.

An interesting point–and one, to my knowledge, never raised before by any other courts.

So at the end of the day the Ninth Circuit holds based on the plain language of the statute that the TCPA’s ATDS definition only applies to calls to randomly generated phone numbers.

It is just insane to me that this is the SAME COURT that held THE SAME DEFINITION applied to any system that dials numbers automatically.

I guess a Supreme Court smackdown can really get these Ninth Circuit judges in line.

So takeaways:

1. This is a huge TCPAWORLD win and means that ATDS cases are truly dead in the Ninth Circuit;

2. It remains to be seen whether other circuits will follow suit. Remember the Third Circuit has already rejected this approach and applied a crazy “everything is an ATDS but it doesn’t matter” approach. So perhaps ANOTHER trip to the Supremes is on deck given the circuit split;

3. ATDS cases were already on the wane at the federal level but remain a HUGE driver of litigation at the state level. Ironically the outcome in the Ninth Circuit, therefore, actually puts more pressure on callers in places like Florida and Oklahoma and texters in Washington.

For those who call EXCLUSIVELY within the Ninth Circuit footprint–i.e. your call center is in California and you are calling folks only in California– this is a big win for you and you might feel comfortable enough to start exploring a process change here. For most folks, however, it is TOO EARLY to move away from human selection dialing–you’re all using Safe Select these days right?– in the context of unconsented (or risky-consented) calls.