Following Duguid, South Carolina District Court Limits Reach Of TCPA's Autodialer Definition

In April 2021, the U.S. Supreme Court resolved a circuit split interpreting the Telephone Consumer Protection Act's (TCPA) definition of "automatic telephone dialing system" or (ATDS). In Facebook, Inc. v. Duguid, the Court held that the clause "using a random or sequential number generator" in the statutory definition of ATDS, 47 U.S.C. § 227(a)(1), modifies both "store" and "produce," thereby "specifying how the equipment must either 'store' or 'produce' telephone numbers." Accordingly, "a necessary feature of an autodialer under § 227(a)(1)(A) is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called." Duguid thus reversed the Ninth Circuit's interpretation that the clause "using a random or sequential number generator" modifies only "produce," such that a device could be an autodialer if it has the capacity to store and automatically dial numbers, even if the numbers are not generated by a random or sequential number generator. Under Duguid, equipment that makes calls to "targeted...numbers linked to specific accounts" are excluded from liability under the TCPA.

In June, the U.S. District Court for the District of South Carolina had the opportunity to apply the Supreme Court's decision. In Timms v. USAA Federal Savings Bank, the plaintiff sought to recover damages from the defendant for alleged violations of the Fair Credit Reporting Act and the TCPA related to debt collection calls. The plaintiff alleged that over the course of ten months, the defendant "carried out a systematic campaign of harassment" by calling her without her consent at least 155 times.

The defendant moved for summary judgment on the grounds that the dialing equipment was not capable of generating random telephone numbers or generating sequential blocks of telephone numbers. The defendant used dialing equipment known as Aspect Unified IP and Aspect Agent Initiated Contact. The District Court found that the defendant's system operated by using "telephone numbers of members from a pre-created list of targeted accounts [which were] automatically dialed or dialed by an agent" and that plaintiff's evidence failed to even suggest that the system stored numbers using a random or sequential number generator or produced numbers using a random or sequential number generator.

The District Court also rejected the plaintiff's argument that a system can still qualify as an ATDS if it uses a random number generator to determine the order in which to pick phone numbers from a pre-produced list. According to the Court, the "argument is nothing more than a rehash of the now-rejected Ninth Circuit conclusion that to qualify as an ATDS, a system 'need only have the capacity to "store numbers to be called" and "to dial such numbers automatically."'"

Finally, the Court rejected the plaintiff's argument that footnote 7 in the Supreme Court's opinion left open the possibility that dialing equipment using a stored list of numbers that were not randomly generated could still qualify as an autodialer if it, as the footnote put it, "used a random number generator to determine the order in which to pick phone numbers from a preproduced list" because the plaintiff had failed to offer any evidence that the device randomly selected the dialing order, making "the language from footnote 7 ...  inapposite."

Although the law in this area continues to evolve, this latest guidance suggests that businesses with communications systems that do not have the capacity to use a random or sequential number generator should be able to keep those systems in place without violating the TCPA's prohibitions on the use of autodialers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.