Panzarella v. Navient Solutions, Inc.

• Decision Date: 14 June 2022
• Docket Number: 20-2371
• Parties: Elizabeth PANZARELLA; Joshua Panzarella, Individually and on behalf of all others similarly situated, Appellants v. NAVIENT SOLUTIONS, INC.
• Court: U.S. Court of Appeals — Third Circuit

37 F.4th 867

Elizabeth PANZARELLA; Joshua Panzarella, Individually and on behalf of all others similarly situated, Appellants

v.NAVIENT SOLUTIONS, INC.

No. 20-2371

United States Court of Appeals, Third Circuit.

Argued February 11, 2022

Filed: June 14, 2022

James A. Francis, David A. Searles, Francis Mailman Soumilas, 1600 Market Street, Suite 2510, Philadelphia, PA 19103, David P. Mitchell [ARGUED], Maney & Gordon, 101 East Kennedy Boulevard, Suite 1700, Tampa, FL 33602, Robert P. Cocco, Robert P. Cocco, P.C., 1500 Walnut Street, Suite 900, Philadelphia, PA 19102, Counsel for Appellants

Alan J. Butler, Megan Iorio, Christopher Frascella, 1518 New Hampshire Avenue, N.W., Washington, DC 20036, Counsel for Amicus/Appellants

Lisa M. Simonetti [ARGUED], Greenberg Traurig, 1840 Century Park East, Suite 1900, Los Angeles, CA 90067, Lindsay N. Aherne, Greenberg Traurig, 1144 15^th St., Suite 3300, Denver, CO 80202, Joel M. Eads, Greenberg Traurig, 1717 Arch Street Suite 400, Philadelphia, PA 19103, Counsel for Appellee

Before: GREENAWAY, JR., SCIRICA, and RENDELL, Circuit Judges.

OPINION OF THE COURT

Rendell, Circuit Judge.

Elizabeth and Joshua Panzarella ("the Panzarellas") sued Navient Solutions, LLC ("Navient"), claiming that, among other things, Navient violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 (the "TCPA"). The Panzarellas assert that Navient called their cellphones without their prior express consent using an automatic telephone dialing system ("ATDS") in violation of section 227(b)(1)(A)(iii) of the TCPA. The District Court granted summary judgment for Navient. It concluded that Navient's dialing technology did not qualify as an ATDS under section 227(a)(1) of the TCPA because it viewed a particular component of Navient's dialing technology as separate from its dialing system. As a result, it erred by failing to consider whether Navient's dialing "equipment" as a whole qualified as an ATDS. Id. Even though we do not decide whether Navient's dialing equipment qualified as an ATDS, we find that Navient did not use an ATDS in violation of the TCPA when it called the Panzarellas. Thus, we will affirm the District Court's order on this alternative ground.

I.

Navient serviced the student loans of Matthew Panzarella, Elizabeth's son and Joshua's brother. Matthew listed both his mother and brother as references on student loan applications and promissory notes and, in doing so, provided their cell phone numbers to Navient. Eventually, he became delinquent on his loans and failed to respond to Navient's attempts to communicate with him. In response, Navient contacted the Panzarellas. Call logs show that, over five months, Navient called the phone number alleged to belong to Elizabeth four times (three of which were unanswered, and one of which may have been answered) and the number alleged to belong to Joshua fifteen times (all unanswered).

During the relevant period, Navient used telephone dialing software developed by Interactive Intelligence Group, Inc ("ININ"),¹ the "Interaction Dialer." This software allows a user to "conduct[ ] campaigns" during which "calls are placed to contacts based upon information read from a contact list." App. 185. For each campaign, the user may opt to use one of several dialing methods, which employ varying levels of automation. For example, in "Preview" mode, call center agents initiate calls, while, in modes such as "Predictive" and "Power," the Interaction Dialer automatically dials telephone numbers.²

The Interaction Dialer cannot conduct campaigns on its own. Instead, it "is deployed across servers and workstations that collectively make up the system." App. 200. Three servers are required: the Outbound Dialer Server, the Central Campaign Server, and a database server. During a campaign these three servers work together to make and process outbound calls. The Outbound Dialer Server makes the outbound calls, while the Central Campaign Server acts like an intermediary gathering data from and passing these data among the system's servers. The database server, which "often runs on dedicated hardware" yet "can reside on the [Central Campaign Server]," contains "a set of database tables that are created and managed automatically by Interaction Dialer" and the customer-created "contact list." App. 200, 203. The Interaction Dialer relies on "external data sources for contacts [l]ists and campaign tables," and these tables "must be managed by a database management system," either Oracle RDBMS or Microsoft SQL Server. App. 205. Users may employ the Interaction Dialer's "Contact Import Wizard" to import contact data from their own sources or "create [their] contact tables manually." App. 205, 209.

As is relevant here, in its configuration of the Interaction Dialer (the "ININ System"), Navient used a database server managed by Microsoft SQL Server (the "SQL Server"). The server performs two key functions for the ININ System. First, it stores a list of numbers associated with student loan accounts that have specific attributes (e.g., type of loan, stage of delinquency). Although the SQL Server can generate 10-digit random and sequential numbers in a ContactList table, all its stored telephone numbers "are pulled from Artiva," Navient's separate database of account information. App. 123 ¶ 19. Second, the SQL Server plays a role in outbound calling campaigns, relaying the stored telephone numbers to the ININ System's other servers to enable the System to dial them.

This appeal concerns whether Navient used the ININ System in violation of the TCPA. The TCPA prohibits individuals from, among other things,

mak[ing] any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system ...—

(i) to any emergency telephone line ... ;

(ii) to the telephone line of any guest room or patient room of a hospital health care facility, elderly home, or similar establishment; or

(iii) to any telephone number assigned to a paging service, cellular telephone service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to the United States[.]

§ 227(b)(1)(A). Under section 227(a)(1) of the TCPA, an ATDS is

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.

The Panzarellas filed a putative class action complaint against Navient in the United States District Court for the Eastern District of Pennsylvania, alleging that Navient used an ATDS to call their and others' cellphones without their prior express consent in violation of section 227(b)(1)(A)(iii) of the TCPA.³ They sought injunctive relief and statutory damages under section 227(b)(3) of the TCPA as well as an award of attorneys' fees and costs on an equitable basis.⁴

Navient sought summary judgment, arguing, among other things, that the Panzarellas' "TCPA claims fail[ed]" because Navient did not call them "us[ing] an ATDS[.]" App. 62-63. It claimed it could not have done so as its ININ System did not qualify as an ATDS under section 227(a)(1) of the TCPA. It contended that, because this system lacked the capacity to generate random or sequential telephone numbers and then dial those numbers, it could not be an ATDS.⁵

The District Court granted summary judgment for Navient holding that Navient did not use an ATDS to place the calls at issue. It determined that Navient's ININ System lacked the necessary present capacity to store or produce telephone numbers using a random or sequential number generator. It reasoned, relying largely on the characterization of such a database server contained in the Interaction Dialer's manual, that the SQL Server was distinct from the ININ dialing system. Consequently, the District Court found that the Panzarellas had adduced "no evidence to suggest that the ININ dialing system on its own is an ATDS" and granted Navient's motion for summary judgment on the Panzarellas' TCPA claims. App. 10 (emphasis added).

The Panzarellas timely appealed their TCPA claims and seek reversal only of the District Court's grant of summary judgment for Navient on these claims.

II.⁶

Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We review the order granting summary judgment, including the factual and legal questions, de novo. Ezaki Glico Kabushiki Kaisha v. Lotte Int'l Am. Corp. , 986 F.3d 250, 255 (3d Cir. 2021). We "view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion." Eisai, Inc. v. Sanofi Aventis U.S., LLC , 821 F.3d 394, 402 (3d Cir. 2016) (citation omitted). "We may affirm on any basis supported by the record, even if it departs from the District Court's rationale." TD Bank N.A. v. Hill , 928 F.3d 259, 270 (3d Cir. 2019).

III.

A.

The Panzarellas asserted that Navient violated section 227(b)(1)(A)(iii) by using an ATDS to call them without their prior express consent. As noted above, the District Court disagreed, concluding that Navient's dialing system, the ININ System, was not an ATDS as defined by section 227(a)(1). The District Court's conclusion, however, rested on its misinterpretation of the TCPA's ATDS definition, in particular the meaning of "equipment."

The TCPA requires that we consider the "equipment" that the defendant employs to conduct calling campaigns. § 227(a)(1). To determine how widely this term sweeps, "we look first to [the statute's] language, giving the words used their ordinary meaning." Artis v. Dist. of Columbia , ––– U.S. ––––, 138 S. Ct. 594, 603, 199 L.Ed.2d 473 (2018) (citation omitted). For an undefined term such as "equipment," we seek to determine...