Hunton Retail Law Resource

Last week the Eleventh Circuit delivered a surprising blow to class action settlement practice finding that 19th century Supreme Court precedent “prohibit[s] the type of incentive award that the district court approved here–one that compensates a class representative for his time and rewards him for bringing a lawsuit,” a type of incentive award that is “commonplace in modern class-action litigation.” Retailers and other defendants in class action cases should take note, because this ruling may impact how settlements in the Eleventh Circuit should be structured going forward.

On May 6, 2020, the United States Supreme Court held oral argument in William P. Barr, et al. v. American Association of Political Consultants, et al., No. 19-631 (Nov. 14, 2019). In Barr, the Court was asked to consider the constitutionality of the government debt collection exemption to the Telephone Consumer Protection Act (TCPA). Under that exemption, calls placed to collect a debt owed to or guaranteed by the United States government are not subject to the TCPA’s autodialing restrictions. The questions before the Court were (1) is the government debt collection exemption unconstitutional under the First Amendment and (2) if so, whether the constitutionality can be addressed by simply severing that exemption from the statute or whether the entire statute should be invalidated. Based on the tone of the oral argument, the tide may be changing for the TCPA.

On February 19, 2020, the Seventh Circuit, aligning with previous decisions of the Eleventh and Third Circuits, held in Gadelhak v. AT&T Services, Inc. that a defendant’s dialing system did not constitute an “automatic telephone dialing system” (ATDS) under the meaning of the Telephone Consumer Protection Act where it was not capable of generating random and sequential numbers. The court analyzed the language of the TCPA and determined that, as written, there were four potential ways to interpret the statutory language. However, based on both basic rules of grammar and punctuation, as well as the technology that was available at the time the TCPA was enacted into law in 1991, the Seventh Circuit decided that the Eleventh Circuit’s interpretation in Glasser v. Hilton Grand Vacations Company was the most persuasive. Therefore, the court concluded that, to be an ATDS, a device must be capable of generating random and sequential numbers. In other words, the Seventh Circuit agrees that a device is not an ATDS merely because it dials from a stored list of numbers.

Since previous FCC interpretations of the Telephone Consumer Protection Act (“TCPA”) were invalidated by the DC Circuit in 2018, the definition of an “automatic telephone dialing system” (“ATDS”), has been hotly contested. The Ninth Circuit has held that merely calling numbers from a stored list is sufficient to meet the definition of an ATDS, while the Second and Third Circuits have at least indicated that the ability to generate numbers randomly or sequentially is the defining characteristic. Compare Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1043 (9th Cir. 2018), with Dominguez v. Yahoo, Inc., 894 F.3d 116, 121 (3d Cir. 2018) and King v. Time Warner Cable, Inc., 894 F. 3d 473, 479 (2d Cir. 2018).