New York Federal Appellate Court Narrowly Interprets TCPA: Huge Win for the Defense Bar

On May 15, 2024, the 2nd Circuit Court of Appeals dismissed a class action lawsuit against Subway for alleged Telephone Consumer Protection Act (“TCPA”) violations. See Soliman v. Subway Franchisee Advert. Fund Tr., LTD. The 2nd Circuit Court of Appeals includes the States of New York, Vermont, and Connecticut. This federal appellate court held that the “random or sequential number generator” requirement under the TCPA only includes automated telemarketing systems that can randomly and sequentially generate telephone numbers and that Subway’s telemarketing system merely selected a telephone number from a preexisting (read: pre-generated) list to send text messages.

This federal court ruling was not unanimous; the dissenting Judge Anne M. Nardacci opined that the majority misinterpreted the statutory text of the TCPA when it held that the phrase “random or sequential number generator” included telephone numbers. However, Judge Denny Chin, writing on behalf of the majority, thoroughly explained the Court’s holding stating that the TCPA uses both “telephone number” and “number” interchangeably throughout the statute to mean the same thing: telephone number.

This ruling comes as a huge win for the defense bar after a years-long litigation battle over the interpretation of the TCPA. While this holding in the 2nd Circuit is not binding on other federal Circuit Courts, it is likely persuasive. Other surrounding federal circuit courts include the 1st Circuit (Maine, New Hampshire, Massachusetts, Rhode Island), and the 3rd Circuit (Pennsylvania, New Jersey, Delaware).  
The probability that other federal Circuits will adopt this recent holding is even more likely given that the holding seems to align well with a 2021 holding by the U.S. Supreme Court, which carved out from the TCPA any telemarketing system that merely stores telephone numbers without implementing a random or sequential number “generator.” See Facebook Inc. v. Duguid, 592 U.S. 395 (2021).

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