February 20, 2020

Narrow Definition of ATDS Prevails in the Seventh Circuit

The Seventh Circuit has rejected a broad interpretation of Automatic Telephone Dialing Systems (ATDS), which threatened to create “liability for every text message sent from an iPhone,” the National Law Journal reports. A three judge panel decided yesterday that in order to qualify as an ATDS and establish liability under the Telephone Consumer Protection Act (TCPA), equipment used by defendants must have the “capacity to generate random or sequential numbers.”  

In the case at hand, Gadelhak v. AT&T Services, Inc., AT&T’s automated system pulled and dialed numbers exclusively from an existing customer list. This means that there was no random or sequential number generator involved, according to the court’s interpretation, which aligns with amicus briefs filed by the U.S. Chamber of Commerce Litigation Center and other business groups.

This decision heightens the ongoing circuit split over the interpretation of ATDS; some courts have contended that ATDS covers any device that can automatically dial a number, while others are in line with the Seventh Circuit. The ultimate fate of the ATDS interpretation will have major implications for plaintiffs’ ability to bring claims under the TCPA, which one defense lawyer describes as “the largest cash cow in history for plaintiffs’ lawyers.”

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