District of New Jersey Adopts Narrow ATDS Definition as Circuit Split Grows; Supreme Court Clarification Required

As readers of this blog know, a robust Circuit split has developed regarding the meaning of an ATDS. The Second and Ninth Circuits have taken one approach, while the Third, Seventh, and Eleventh Circuits have taken another. While we await Supreme Court guidance, lower courts continue to grapple with the ATDS issue. In Eisenband v. Pine Belt Automotive, Inc., No. 17-8549 (FLW) (LHG), 2020 WL 1486045 (D.N.J. Mar. 27, 2020), the District of New Jersey analyzed the definition of an ATDS and concluded that equipment that dials numbers from a manually prepared list  does not constitute an ATDS.

The Eisenband plaintiff first contacted Pine Belt Automotive, Inc. (“Pine Belt”), a car dealer, to request information on leasing a car, and claimed that in response Pine Belt sent unauthorized texts to his cell phone using an ATDS. Id. at *1. In a summary judgment motion, Pine Belt asserted that the third-party computer platform it used, the CRMSuite platform, was not an ATDS because Pine Belt employees manually created a recipient list from Pine Belt’s own database, chose and applied filters and other criteria to the list, and prepared the content of each text message sent through the campaign. Id. The creator of the CRMSuite platform also testified that the platform did not have the capacity to generate random or sequential numbers and dial them. Id. at *2. Pine Belt therefore argued that its employees, rather than the computer platform itself, generated the numbers to call or text. Id. at *1.

In granting Pine Belt’s summary judgment motion, the Court determined that ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018), and later Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018), invalidated the FCC’s 2003, 2008, and 2015 Orders regarding the definition of an ATDS. Id. at *4. As such, the Court was left to consider only the TCPA’s statutory language in determining whether the CRMSuite platform was an ATDS. Id. at *5.

The Court analyzed the statutory language and found that an ATDS “must randomly or sequentially produce and store numbers, though it does not need to dial them randomly or sequentially” and “accordingly, any system that dials numbers from a preprogrammed list does not fall within the statutory definition.” Id. at *5–6 (emphasis in original). Indeed, “reading the statute otherwise would requiring mangling its plain language . . . .” Id. at *5. Because the CRMSuite platform did not have the capacity to randomly or sequentially generate numbers, it was not an ATDS. Id. at *6–7.

This decision adds to the growing list of courts that have concluded, based on a close reading of the TCPA’s statutory language, that a device cannot be an ATDS unless it has the present capacity to generate numbers randomly or sequentially. Until the Supreme Court takes up this issue, businesses will continue to face a patchwork map of conflicting court rulings in different jurisdictions, a significant burden for businesses that operate across the nation.