PERRONG LOSES MASSIVE ATDS RULING: Third Circuit Court of Appeal Rejects FN7 Argument and Follows Borden in Unpublished TCPA ATDS Ruling

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So the Third Circuit Court of Appeals just followed the Ninth Circuit’s Borden ruling adopting a limited ATDS interpretation and it is a really big deal.

Making matters more fun, the case was brought by repeat-litigator turned attorney Andrew Perrong.

Now since Perrong has been a licensed attorney and he seems to have turned a new leaf.

That is to say, I haven’t seen any recent rulings by federal courts chastising him for improper conduct. And he came on my podcast and generally behaved himself.

WATCH NOW: “You’ll Be Seeing a Lot of Me”– Andrew Perrong Makes Splashy Entrance With HUGE Interview on Deserve to Win Episode 19

So I’d consider myself neutral on the guy for the moment.

Plus he did just give us a big win on the TCPA’s ATDS definition, although he probably didn’t mean to do that.

In Perrong v. Montgomery County Democratic Committee, 2024 WL 1651274 (3rd Cir. 2024) Perrong sued the Dems claiming they sent him a text message without consent. He alleged the device used to send the message was an ATDS because it used a randomizer to decide what number to send the message to from a list. The district court granted a motion to dismiss finding no ATDS was used and Perrong appealed.

Now the Third Circuit Court of Appeals has the most interesting ATDS take in the country so far. It rejects the “capacity” argument and look solely at the “use” of the system — plus it has an extremely broad definition of “equipment” so that if any integrated software has the required functionalities of an ATDS the entire system is an ATDS. In other words, everything is an ATDS and nothing is. Its weird and Nietzche-esque

But for all the nihilism of the Panzarella decision it didn’t neatly answer the core question of the ATDS dialectic–what precisely are the required functionalities of an ATDS?

That’s where the much more manageable Perrong ruling comes in.

There the Court holds: Here, the defendants’ calls were list-mode calls which, according to Panzarella, fall outside the scope of the TCPA’s prohibitions. Perrong fails to explain how the defendants’ method of calling risks dialing up emergency lines or tying up sequentially numbered business lines. This lawsuit is a case in point: Perrong received a targeted phone call (addressing him by name) that urged him to vote for a political party in his county’s general elections. Thus, the defendants did not use an ATDS to call Perrong. See Beal v. Outfield Brew House, LLC, 29 F.4th 391, 395–96 (8th Cir. 2022); Borden v. eFinancial, LLC, 53 F.4th 1230, 1234– 35 (9th Cir. 2022)

So no risk of random calls hitting random phone lines– no ATDS. Nice.

Court also expressly rejects footnote 7 arguments:

The gist of Perrong’s argument is that in footnote seven of Duguid, the Supreme Court endorsed the proposition that a device using a number generator to select and dial phone numbers from a previously compiled list is also an ATDS. But we did not adopt this reading of Duguid in our subsequent decision in Panzarella. And our sister Courts of Appeals have rejected this precise argument on the ground that it takes the footnote completely out of context. Borden, 53 F.4th at 1236; Beal, 29 F.4th at 396. We concur with their persuasive reasoning and reject Perrong’s interpretation of Duguid.

Wow!

So the Third Circuit Court of Appeals has (lightly) held that an ATDS is only an ATDS if it uses a randomizer to generation telephone numbers. Now this is definitively WRONG–see here–BUT it is good news for callers regardless. (Do remember, however, this is a non-binding decision–so the 3COA can change its mind!)

If you’re interested in the state of the state on TCPA ATDS issues there’s no better place to learn about it than at the Law Conference of Champions on July 15, 2024!!! So much CLE credit in one fun place. hahaha

Tickets to the in-person event will NOT be sold past May 1, 2024. SO get them now.

Chat soon!

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

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  1. The thing that irks me the most about the Facebook decision and its progeny is the attempt to impart some post hoc policy rationale to the “random and sequential” language in the ATDS definition. This court says the defendant’s alleged predictive dialer spam was OK because its calling list didn’t include emergency lines or sequentially numbered business lines. But defendant *intentionally* targeted Perrong’s cell phone – which Congress gave the same protection under the TCPA as emergency lines and multi-line businesses, using the same ATDS definition! And if defendant had *accidentally* reached Perrong after randomly generating his phone number, that would be a violation! All of this is totally incoherent.

    Instead of judges trying to justify the Facebook interpretation of the ATDS definition, they should write in every opinion: This makes no sense. The law was poorly drafted, and it has opened up a huge loophole for spammers. Please fix this, Congress.

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