On June 15, a court in the United States District Court for the Southern District of Indiana granted summary judgment in favor of a Telephone Consumer Protection Act class defendant based on the Seventh Circuit’s seminal decision in Gadelhak. The decision puts an end to a previously-certified class of more than 4,300 members.
Plaintiff Katherina Lanteri filed a complaint against defendants Credit Protection Association, L.P. (“CPA”) and Etan General, Inc. in 2013, contending that the companies violated the TCPA and the Fair Debt Collection Practices Act by making unsolicited telephone calls and sending unsolicited text messages to cellular phones using prerecorded voices or an automatic telephone dialing system. Lanteri specifically alleged that she received a text message from CPA and texted “stop,” rather than “STOP,” but continued to receive text messages. The district court certified a class of approximately 4,300 members based on Lanteri’s allegations. The Court stayed its decision on the parties’ cross motions for summary judgment pending the Seventh Circuit’s decision in Gadelhak, where the Court of Appeals ultimately held that telephony must have a random or sequential number generator to qualify as an ATDS.
In light of Gadelhak, the district court concluded that the system at issue was not an ATDS and, furthermore, decertified the class. The Court noted that CPA’s text messaging system, SoundBite, “sent text messages to specific phone numbers from stored customer lists,” after a CPA employee determined which accounts should receive messages. CPA then used a separate system, RingClear, “to text only those numbers and accounts that had been specifically selected for campaigns by CPA’s management team.” But the system’s ability to text numbers from a list, without random or sequential number generation, was insufficient to qualify the system as an ATDS.
Notably, a district court in the Second or Ninth circuit would reach a different decision on these same facts. As we detailed here, there is a widening circuit split between the Seventh and Eleventh circuits, which hold that an ATDS requires random or sequential number generation, and the Second and Ninth circuits, which have held that telephony that dials numbers from a stored list can qualify as an ATDS. The Supreme Court of the United States already has heard one TCPA case this term and has yet to decide whether it will hear Duguid v. Facebook, which includes the social media giant’s challenge to the Ninth Circuit’s ATDS definition. With no clear direction in sight and the Federal Communications Commission missing in action, the ongoing debate over what constitutes an ATDS continues in the courts.