Gadelhak v. AT&T Servs., Inc.

• Decision Date: 19 February 2020
• Docket Number: No. 19-1738,19-1738
• Citation: 950 F.3d 458
• Parties: Ali GADELHAK, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. AT&T SERVICES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

950 F.3d 458

Ali GADELHAK, on behalf of himself and all others similarly situated, Plaintiff-Appellant,

v.AT&T SERVICES, INC., Defendant-Appellee.

No. 19-1738

United States Court of Appeals, Seventh Circuit.

Argued September 27, 2019

Decided February 19, 2020

Rehearing En Banc Denied March 19, 2020^*

Keith J. Keogh, Timothy J. Sostrin, Attorneys, KEOGH LAW, LTD, Chicago, IL, for Plaintiff - Appellant.

Hans Germann, Kyle J. Steinmetz, Attorneys, MAYER BROWN LLP, Chicago, IL, Andrew John Pincus, Attorney, MAYER BROWN LLP, Washington, DC, for Defendant - Appellee.

Marc Rotenberg, Attorney, ELECTRONIC PRIVACY INFORMATION CENTER, Washington, DC, Amici Curiae ELECTRONIC PRIVACY INFORMATION CENTER and NATIONAL CONSUMER LAW CENTER, INCORPORATED.

Shay Dvoretzky, Attorney, JONES DAY, Washington, DC, for Amicus Curiae CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA.

Steven Gregory White, Attorney, GRAY REED & MCGRAW LLP, Dallas, TX, for Amicus Curiae ACA INTERNATIONAL.

Before Wood, Chief Judge, and Kanne and Barrett, Circuit Judges.

Barrett, Circuit Judge.

The wording of the provision that we interpret today is enough to make a grammarian throw down her pen. The Telephone Consumer Protection Act bars certain uses of an "automatic telephone dialing system," which it defines as equipment with the capacity "to store or produce telephone numbers to be called, using a random or sequential number generator," as well as the capacity to dial those numbers. We must decide an issue that has split the circuits: what the phrase "using a random or sequential number generator" modifies.

We’ll save the intense grammatical parsing for the body of the opinion—here, we’ll just give the punchline. We hold that "using a random or sequential number generator" modifies both "store" and "produce." The system at issue in this case, AT&T’s "Customer Rules Feedback Tool," neither stores nor produces numbers using a random or sequential number generator; instead, it exclusively dials numbers stored in a customer database. Thus, it is not an "automatic telephone dialing system" as defined by the Act—which means that AT&T did not violate the Act when it sent unwanted automated text messages to Ali Gadelhak.

I.

This dispute stems from AT&T’s "Customer Rules Feedback Tool," a device that sends surveys to customers who have interacted with AT&T’s customer service department. Using this tool, AT&T sent Chicago resident Ali Gadelhak five text messages asking survey questions in Spanish. But Gadelhak is neither an AT&T customer nor a Spanish speaker, and his number is on the national "Do Not Call Registry." Annoyed by the texts, Gadelhak brought a putative class action against AT&T for violating the Telephone Consumer Protection Act, which Congress enacted in 1991 to address the problem of intrusive telemarketing.

With some exceptions not relevant here, the Act prohibits the use of an "automatic telephone dialing system" to call or text any cellular phone without the prior consent of the recipient, as well as to call certain hospital numbers. 47 U.S.C. § 227(b)(1). An "automatic telephone dialing system" is defined 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.

Id. § 227(a)(1); see also Campbell-Ewald Co. v. Gomez , ––– U.S. ––––, 136 S. Ct. 663, 667, 193 L.Ed.2d 571 (2016) (clarifying that text messages are covered). The success of Gadelhak’s suit depends on whether AT&T’s feedback tool meets this definition. Unfortunately, the awkward statutory wording, combined with changes in technology, makes this a very difficult question.

At the time that the Telephone Consumer Protection Act was passed, telemarketers primarily used systems that randomly generated numbers and dialed them, and everyone agrees that such systems meet the statutory definition. But that’s not how AT&T’s customer feedback tool works. The system, like others commonly used today, pulls and dials numbers from an existing database of customers rather than randomly generating them. (Given that its tool pulls exclusively from its customer database, AT&T posits that Gadelhak received messages because of a typographical error.) Determining whether such systems meet the statutory definition has forced courts to confront an awkwardness in the statutory language that apparently didn’t matter much when the statute was enacted: it’s not obvious what the phrase "using a random or sequential number generator" modifies. The answer to that question dictates whether the definition captures only the technology that predominated in 1991 or is broad enough to encompass some of the modern, database-focused systems.

II.

Before we analyze the merits, though, we must address the preliminary matter of Gadelhak’s standing to bring this suit. The doctrine of standing is rooted in Article III of the U.S. Constitution, which limits the federal judicial power to resolving "Cases" or "Controversies." U.S. CONST. art. III, § 2. To satisfy the standing requirement, the plaintiff must claim "to have suffered an injury that the defendant caused and the court can remedy." Casillas v. Madison Ave. Assocs., Inc. , 926 F.3d 329, 333 (7th Cir. 2019). If a plaintiff lacks standing, a federal court lacks jurisdiction.

While AT&T does not challenge Gadelhak’s standing, we have an independent obligation to confirm our jurisdiction before adjudicating a case. FW/PBS, Inc. v. City of Dallas , 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990). To be sure, the obligation to verify our jurisdiction in every case does not mean that we have to discuss it in every opinion. Here, though, the question whether plaintiffs like Gadelhak have standing is difficult enough to have divided the circuits. The Eleventh Circuit has held that the receipt of an unwanted automated text message is not a cognizable injury under Article III because it is insufficiently "concrete." Salcedo v. Hanna , 936 F.3d 1162, 1172 (11th Cir. 2019). The Second and Ninth Circuits have come out the other way. Melito v. Experian Mtkg. Sols., Inc. , 923 F.3d 85, 92–93 (2d Cir. 2019) ; Van Patten v. Vertical Fitness Grp., LLC , 847 F.3d 1037, 1042–43 (9th Cir. 2017). Given the split, it is important for us to show our work.

To qualify as "concrete," an injury must be "real" rather than "abstract"—that is, "it must actually exist." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1548, 194 L.Ed.2d 635 (2016). A "bare procedural violation" does not qualify, even if it gives rise to a statutory cause of action. Id. at 1549. That is so because Article III cabins Congress’s authority to create causes of action, and suits involving abstract injuries lie beyond "the judicial Power." U.S. CONST. art. III, § 1. Thus, Gadelhak’s standing to sue is not settled by the fact that the Telephone Consumer Protection Act authorizes his suit. See 47 U.S.C. § 227(b)(3). It depends on whether the unwanted texts from AT&T caused him concrete harm or were merely a technical violation of the statute.

To determine whether the texts caused concrete harm, we look to both history and Congress’s judgment. As the Court has explained, "it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts." Spokeo , 136 S. Ct. at 1549. And because Congress is particularly suited "to identify intangible harms that meet minimum Article III requirements, its judgment is also instructive and important." Id.

We’ll start with history. The common law has long recognized actions at law against defendants who invaded the private solitude of another by committing the tort of "intrusion upon seclusion." RESTATEMENT (SECOND) OF TORTS § 652B ( AM. LAW INST. 1977). In rejecting standing in a similar case, the Eleventh Circuit suggested that the tort of intrusion upon seclusion addressed only invasions of privacy like eavesdropping and spying, which pose a different kind of harm altogether. Salcedo , 936 F.3d at 1171. We see things differently. Courts have also recognized liability for intrusion upon seclusion for irritating intrusions—such as when "telephone calls are repeated with such persistence and frequency as to amount to a course of hounding the plaintiff." RESTATEMENT § 652B cmt. d; see id. cmt. b, illus. 5; see also Carey v. Statewide Fin. Co. , 3 Conn.Cir.Ct. 716, 223 A.2d 405, 406–07 (1966) ; Housh v. Peth , 165 Ohio St. 35, 133 N.E.2d 340, 344 (Ohio 1956) ; Household Credit Servs., Inc. v. Driscol , 989 S.W.2d 72, 84–85 (Tex. App. 1998). The harm posed by unwanted text messages is analogous to that type of intrusive invasion of privacy.

Now, for Congress’s judgment. In passing the Act, Congress decided that automated telemarketing can pose this same type of harm to privacy interests. Pub. L. No. 102-243, § 2, 105 Stat. 2394, 2394 (1991) (explaining in the findings that "[u]nrestricted telemarketing ... can be an intrusive invasion of privacy" and characterizing telemarketing as a "nuisance"). While Congress cannot transform a non-injury into an injury on its say-so, that is hardly what it did here. Instead, Congress identified a modern relative of a harm with long common law roots. And Gadelhak claims to have suffered the very harm that the Act is designed to prevent. Cf. Melito , 923 F.3d at 92–93 (reaching the same conclusion).¹

The Eleventh Circuit treated the injury in its case as abstract partly because common law courts generally require a much more substantial imposition—typically, many calls—to support liability for intrusion upon seclusion. See, e.g. , Sofka v. Thal , 662 S.W.2d 502, 511 (Mo. 1983). But when Spokeo instructs us to analogize to harms recognized by the common law, we are meant to look for a "close relationship" in kind, not degree. See 136 S. Ct. at 1549. In other words, while the common law offers guidance, it does not stake...