VANISHING POINT: Eighth Circuit Court of Appeals Issues GREAT ATDS Ruling That Doesn’t Quite Get It

Well TCPAWorld has its first REAL appellate level ATDS ruling posting Facebook–and it is seemingly a Defendant’s dream. Except, it only analyzes half the ATDS issue–and the wrong half at that.

First, the good (amazing!) news.

In Beal v. Outfield Brew House, No. 20-1961, No. 20-3581, 2022 U.S. App. LEXIS 7748 (8th Cir.  March 24, 2022) the Eighth Circuit court of appeals held directly that a system that does not generate random or sequential phone numbers does not “produce” phone numbers to be dialed using an ROSNG.

And while that ruling is certainly high five worthy, it is not quite as great as it seems.

The ruling was laser focused on the word “produce.” For some reason that I cannot conceive of, the Plaintiff argued that the word “produce” means to bring forward–an old throw away from the government’s amicus brief in Facebook–and argued on that basis that the use of a randomizer to determine dialing sequence triggers the TCPA’s ATDS definition.

But the Beal court had little trouble rejecting that argument. It held–in direct fashion–that the word “produce” means to “generate.” So using a randomizer to determine the sequence in which numbers will be called is not the “production” of numbers under Facebook.

Along the way the Eighth Circuit pauses to give us all GREAT dicta rejecting FN7 and suggesting that systems that call numbers from a list can NEVER be an ATDS:

while Appellants argue Txt Live differs from the system in Facebook because it uses a numerically-based randomizer to shuffle and select phone numbers, we find this unpersuasive. Facebook was not concerned with how an automatic texting system may organize and select phone numbers. The Court was instead concerned with Congress’s limiting the definition of Autodialer to unique equipment capable of randomly dialing emergency lines and tying up sequentially numbered business lines. See id. And this concern reaches a vanishing point with a system that is only designed to text potential customers who have voluntarily given a business their phone numbers.

That all sounds–and is–fantastic.

But if you have a weird feeling like the rulings kind of misses the point–you’re right!

FN7 arguments aren’t about whether a system is “producing” a number using an ATDS–they’re about whether a system is “storing” a number using an ATDS. And an ATDS is a system that does either store or produce numbers using an RoSNG.

Critically, most courts–and even the Supreme Court itself–consider Fn7 arguments through the lens of whether a number is STORED using an RoSNG. Yet the Beal court answered only the question of whether a number is PRODUCED using an RoSNG when a randomizer is used to determine sequence.

Uh oh.

So Beal mostly misses the point. (Again, this seems to have been an issue in the way the Plaintiff framed the issue–at least that’s how the opinion reads.) A holding that use of an RoSNG to determine sequence does not amount to PRODUCING phone numbers to be dialed using an RoSNG is like arguing a prerecorded voice call was not made using an ATDS. That might well be true but…so what? The issue under FN7 deals with STORAGE–and that’s an issue the Beal court did not analyze at all.

Beal feels like a giant step forward here–and maybe it is. But the errant analysis leaves me really cold. Its an umbrella with a hole right in the middle of it.

I suspect that–as with Facebook itself–most district courts within the Eighth Circuit court of appeals footprint will now only apply the TCPA to dialers that randomly generate phone numbers. And that’s great news for call centers in the midwest. But the barn door is left open here, and I suspect other courts of appeal are going to split. Which means we might be back to the pre-Facebook patchwork. Ugh.

Notice also that Beal was a TEXT case.

As I have been saying, courts are far more likely to apply Facebook to neutralize an ATDS case in the setting of text messages. Hence text messages–particularly triggered or AI texts–remain your safest channel under the TCPA (although they keep creating trouble in Florida.)

Happy to discuss.

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