Hunton Retail Law Resource

On February 19, 2020, the Seventh Circuit, aligning with previous decisions of the Eleventh and Third Circuits, held in Gadelhak v. AT&T Services, Inc. that a defendant’s dialing system did not constitute an “automatic telephone dialing system” (ATDS) under the meaning of the Telephone Consumer Protection Act where it was not capable of generating random and sequential numbers. The court analyzed the language of the TCPA and determined that, as written, there were four potential ways to interpret the statutory language. However, based on both basic rules of grammar and punctuation, as well as the technology that was available at the time the TCPA was enacted into law in 1991, the Seventh Circuit decided that the Eleventh Circuit’s interpretation in Glasser v. Hilton Grand Vacations Company was the most persuasive. Therefore, the court concluded that, to be an ATDS, a device must be capable of generating random and sequential numbers. In other words, the Seventh Circuit agrees that a device is not an ATDS merely because it dials from a stored list of numbers.

While this decision is certainly good news for retailers that do not use equipment that generates phone numbers randomly and sequentially by creating strong defenses on summary judgment to argue that their equipment is not an ATDS under the statute, the Seventh Circuit, without being asked to do so, went out of its way to clarify that even a single unwanted phone call is sufficient to confer Article III standing to bring a TCPA claim. In doing so, the Seventh Circuit expressly rejected an Eleventh Circuit decision (Salcedo v. Hanna, 936 F.3d 1162,1172 (11th Cir. 2019)) which held that a single text message is insufficient to confer standing, choosing instead to follow the Ninth and Second Circuits. With this decision, the majority view is that even a single call confers standing. Thus, in most jurisdictions businesses may not be able to dismiss claims at an early stage by arguing that a plaintiff lacks standing because he or she suffered no cognizable injury. As such, businesses may continue to see ongoing TCPA claims, likely in the hope that a defendant may agree to pay an early settlement to avoid costs of defense.