Does Your Texting Platform Qualify as an ATDS?

​Lawsuits filed under the Telephone Consumer Protection Act (TCPA) are usually premised upon violations of the TCPA’s Do Not Call (DNC) rules or the use of restricted technology, such as an automated telephone dialing system (ATDS) to contact cellular phones. The process of determining whether a texting platform constitutes an ATDS involves a multi-stage analysis that considers statutory definitions, technical capabilities, operational procedures, and extensive factual discovery.

ATDS Statutory Framework and Supreme Court Clarification

The TCPA defines an ATDS as "equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." For years, federal courts were split on interpreting this definition, particularly whether the phrase "using a random or sequential number generator" modified both "store" and "produce" or only "produce."

The Supreme Court's unanimous 2021 decision in Facebook v. Duguid definitively resolved this split. The Court held that to qualify as an ATDS, a device must have the capacity to either (1) store telephone numbers using a random or sequential number generator, or (2) produce telephone numbers using a random or sequential number generator. This narrow interpretation means that systems that merely store and dial numbers from existing databases, without using random or sequential number generation, do not constitute an ATDS.

As Justice Sotomayor noted, expanding the definition to include "equipment that merely stores and dials telephone numbers... would capture virtually all modern cell phones"[2].

Primary Technical Factors of ATDS

Random or Sequential Number Generation Capability: Courts now focus primarily on whether the texting platform has the technical capacity to generate phone numbers using random or sequential algorithms. This requires examination of the platform's underlying software architecture and number generation algorithms, and whether it can create new phone numbers algorithmically versus selecting from predetermined lists.

Post-Facebook, courts consistently distinguish between platforms that store and dial numbers from existing lists (e.g., customer databases, marketing lists) and those that generate numbers algorithmically. The former are generally held to not constitute an ATDS, while the latter could potentially qualify as one if the software is potentially capable of random/sequential number generation.

Historical "Human Intervention" Analysis: While the Facebook Court declined to adopt a "human intervention test,” many courts continue to consider human involvement as a supplementary factor, particularly for texting platforms. This analysis examines whether each message requires individual human action to send, whether humans determine when messages are sent, and whether the messages require humans to customize their content.

Other matter for consideration include whether humans are involved in creating recipient lists, whether numbers are manually or automatically entered into the system, and human oversight in message targeting and selection.

Initial Pleading Standards and Discovery Issues

Courts apply different standards at the pleading stage regarding ATDS allegations. Some courts allow plaintiffs to proceed with minimal technical allegations, recognizing that defendants control the technical information needed to assess ATDS functionality. Other courts, particularly post-Facebook, require more specific pleading about the technology used, especially when messages are clearly targeted to specific individuals rather than randomly generated numbers.

TCPA litigation discovery is often extensive and expensive, with courts requiring production of technical documentation, including software specifications, system design, and architecture documents as well as source code and technical manuals. Plaintiff and defense counsel often rely on the analysis and testimony of third-party experts to explain a platform’s capabilities, which further increases the litigation costs.

A courts' discovery orders often determine case outcomes. Courts that allow broad discovery typically favor plaintiffs while those whose orders restrict discovery favor defendants.

Ongoing Litigation Considerations

Summary Judgment vs. Pleading Stage Resolution: Some courts defer ATDS determination until summary judgment to allow full technical discovery, while others resolve the issue at the pleading stage when facts clearly indicate non-ATDS functionality.

Text Messages vs. Voice Calls: Courts consistently hold that text messages do not constitute "artificial or prerecorded voice" communications under the TCPA, providing an additional defense for texting platforms.

Practical Determination Framework

Before selecting a new texting platform, marketers should undertake the following three-step analysis to determine whether it might qualify as an ATDS in the event of TCPA litigation:

Step 1: Statutory Analysis: First, determine whether the platform has the capacity to generate numbers using random/sequential algorithms, and ask whether it can produce new phone numbers algorithmically versus selecting from existing databases.

Step 2: Technical Evaluation: Have a developer review the platform’s software architecture and number sourcing mechanisms and analyze software capabilities and configuration options to determine whether a sufficient degree of automation exists.

- Examine actual operational usage patterns

Step 3: Human Intervention Assessment: Evaluate the required level of human involvement in message initiation, timing, and targeting, and whether the system operates autonomously or requires human direction for each message.

Key Takeaways

Courts have increasingly found texting platforms do not qualify as ATDS under the narrow Facebook standard. In the Second Circuit case of Marina Soliman v. Subway, the court held that systems generating telephone numbers to be dialed (rather than using pre-existing lists) qualify as an ATDS, but platforms dialing from customer databases do not. The Third, Eighth, and Ninth Circuits have similarly concluded that systems must generate random or sequential numbers, not merely dial from stored lists.

The ATDS determination process has generally become more defense-friendly following Facebook v. Duguid, with many courts requiring plaintiffs to demonstrate actual random or sequential number generation capacity rather than mere automated dialing from existing lists.

However, the technical complexity of modern platforms often requires extensive discovery and expert analysis to make definitive determinations, making TCPA ATDS litigation both fact-intensive and expensive for all parties involved.