Third Circuit Decision Broadens TCPA Autodialer Definition? - Klein Moynihan Turco LLP

Third Circuit Decision Broadens TCPA Autodialer Definition?

Courts across the country continue to adapt in the wake of the U.S. Supreme Court’s decision in Facebook, Inc. v. Duguid. A little over a year ago, this landmark case settled a circuit split about what features dialing equipment must have to qualify as an autodialer under the Telephone Consumer Protection Act (“TCPA”). Despite the decision’s ramifications, most interpreting courts declined to step away from Facebook’s analysis. However, this may have changed in a case titled Panzarella v. Navient Solutions, Inc. In this recent decision, the Third Circuit seems to have broadened the TCPA autodialer definition to a startling degree.

Was a TCPA Autodialer Used in Panzarella v. Navient Solutions, Inc.?

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

In terms of the technology at issue, Navient utilized a system with multiple components. The two primary system pieces were the telephone dialing software and a server that managed its database. This server had the capacity to generate random 10-digit numbers. For Navient’s purposes, however, it stored a list of numbers associated with student loan accounts and relayed the stored numbers to the dialing system. Plaintiffs alleged that the server qualified as a TCPA autodialer and should be included with the dialing software as “equipment” comprising Navient’s system as a whole. In response, Navient argued that only its dialing software, and not the server, should be considered in the Court’s analysis.

The Third Circuit declined to apply Duguid, which turned on the actual use of a random or sequential number generator, in the case at hand. Rather, Panzarella’s analysis started from the ground up. Employing the ordinary meaning of “equipment,” its statutory context, and the FCC’s interpretation of what constitutes a TCPA autodialer, the Court determined that an autodialer system “may include several devices that when combined have the capacity to store or produce telephone numbers using a random or sequential number generator and to dial those numbers”; meaning, in the Court’s opinion, that Navient’s “equipment” included the server as part of an autodialer system. 

Luckily, the analysis in Panzarella continued. The Third Circuit then proceeded to determine the meaning of “use” as employed in section 227(b)(1)(A). Employing the same three-criteria analysis, the Court held that to use technology in a way that constitutes autodialing, “one must use its defining feature – its ability to produce or store telephone numbers through random – or sequential – number generation.” Because Navient’s dialing system had this capability, but did not use it, it did not violate the TCPA in calling the plaintiffs. 

Why does Panzarella Matter to your Business?

The Panzarella Courtmay have reached the same outcome as in other proceedings decided solely on Duguid, but its implications are further reaching and plaintiff friendly. In deciding that dialing technology must be evaluated with the totality of its components, the Third Circuit opened to potential TCPA autodialer liability countless companies that employ sophisticated dialing systems. Whether or not an autodialing function is actually used will likely now be scrutinized on a case-by-case basis. In courts that employ the Third Circuit’s decision, however, defendants will likely find that plaintiffs will pass muster on the first part of the Panzarella analysis in most instances.

Make Sure your Business is Protected.

Even after Facebook, interpretation of the TCPA has remained in a near-constant state of flux. The Panzarella decisionis just the latest example of how a single court ruling could alter the legal landscape. In the face of such change, ensuring that your business stays TCPA compliant requires constant vigilance. Hiring experienced telemarketing attorneys can help take the guesswork out of TCPA compliance. The attorneys at Klein Moynihan Turco have years of experience with advising businesses of all sizes on following industry-best telemarketing practices.  

If you need assistance with updating your telemarketing practices or have been sued for violating the TCPA, email us at or call us at (212) 246-0900. 

The material contained herein is provided for informational purposes only and is not legal advice nor is it a substitute for seeking legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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