Database definition

Third Circuit Decision Expands Definition of TCPA Auto-Dialer? – Telecoms, Mobile & Cable Communications

To print this article, all you need to do is be registered or log in to Mondaq.com.

Courts across the country continue to adapt following the United States Supreme Court’s decision in Facebook, Inc. v. Duguid. Just over a year ago, this landmark case settled a divided circuit over what characteristics dialing equipment must have to qualify as an automatic dialer under the Telephone Consumer Protection Act (” TCPA”). Despite the ruling’s ramifications, most interpretive tribunals have refused to back down from
Facebook analysis. However, that may have changed in a case called Panzarella vs. Navient Solutions, Inc.. In this recent decision, the Third Circuit appears to have expanded the definition of the TCPA autodialer to a surprising degree.

Was a TCPA autodialer used in Panzarella vs. Navient Solutions, Inc.?

The complainants in Panzarella are the brother and mother of a student who had taken out loans with the defendant Navient Solutions, Inc (“Navient”). When the student applied for his loans, he provided the cell phone numbers of the two complainants. When it became delinquent on its loan payments, Navient called each of the complainants. In five months, Navient contacted complainants 19 times. Eventually, plaintiffs sued Navient, alleging that the company violated the TCPA by calling their cell phones using an autodialer without their consent.

In terms of the technology involved, Navient used a multi-component system. The two main elements of the system were the telephone dialing software and a server that managed its database. This server had the ability to generate 10-digit random numbers. For Navient’s purposes, however, it stored a list of numbers associated with student loan accounts and relayed the stored numbers to the numbering system. The plaintiffs alleged that the server qualified as a TCPA auto-dialler and was to be included with the dialer software as “equipment” comprising Navient’s system as a whole. In response, Navient argued that only its dialer software, not the server, should be considered in the Court’s analysis.

Third Circuit declined to apply Duguid, which enabled the actual use of a random or sequential number generator, in this case. Instead, Panzarella’sthe analysis started from the base. Using the ordinary meaning of the term “equipment”, its legislative context, and the FCC’s interpretation of what constitutes a TCPA autodialer, the Court determined that an autodialer system “may include multiple devices which, when they are combined, have the capacity to store or produce telephone numbers using a random or sequential number generator and to dial those numbers”; which means, in the opinion of the Court, that the Navient’s “equipment” included the server as part of an auto-dial system.

Fortunately, the analysis of Panzarellacontinued. The Third Circuit then determined the meaning of “use” as used in Section 227(b)(1)(A). Using the same three-step analysis, the Court held that to use technology in a way that constitutes automatic dialing, “one must use its defining characteristic – its ability to produce or store telephone numbers by random – or sequential number generation. “Because Navient’s numbering system had this capability, but i did not use ithe did not violate the TCPA by calling the plaintiffs.

Why Panzarella Importance for your business?

The Panzarella The tribunal may have reached the same result as in other proceedings decided solely on Duguid, but its implications go further and are favorable to plaintiffs. By deciding that dialer technology should be evaluated with all of its components, the Third Circuit has opened up the potential liability of TCPA autodialers to countless companies that use sophisticated dialing systems. Whether or not to use an auto-dial feature will likely be considered on a case-by-case basis. In courts that employ the Third Circuit’s decision, however, defendants are likely to find plaintiffs skipping the first part of the case. Panzarella analysis in most cases.

Make sure your business is protected.

Even after Facebook, the TCPA’s interpretation remained in a near-constant state of flux. The Panzarellaruling is just the latest example of how a single court ruling could change the legal landscape. In the face of such changes, ensuring your business remains TCPA compliant requires constant vigilance. Hiring experienced telemarketing attorneys can help take the guesswork out of TCPA compliance. Klein Moynihan Turco attorneys have years of experience advising businesses of all sizes on adhering to industry best telemarketing practices.

Similar blog posts:

Arizona court dismisses autodialer case

How the Facebook Decision Changed Auto-Number Factor Analysis

Another court relies on Facebook to dismiss TCPA autodialer claims

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: US Media, Telecom, Computers & Entertainment

FTC sues shoe company over pain relief claims

Frankfurt Kurnit Klein & Selz

The Federal Trade Commission announced that it has sued Gravity Defyer Medical Technology Corporation and its owner, accusing them of making false claims that Gravity Defyer shoes provide pain relief.