A California state court decision furthers a current movement by judges in dismissing TCPA cases where the dialing device used to place allegedly violative calls does not itself have the capacity to generate telephone numbers.

Cynthia Stockwell sued Credit Management LLP alleging violations of the TCPA as well as the Fair Debt Collection Practices Act and its state equivalent, the Rosenthal Fair Debt Collection Practices Act. Stockwell claimed that the defendant “repeatedly or continuously” called her cell phone with an automatic dialing system without her permission and with the intent to harass or annoy her in an attempt to collect a debt.

Credit Management moved for summary judgment on all claims raised in plaintiff’s complaint. In a brief order issued by Orange County Superior Court Judge Ronald Bauer, the court denied defendant’s motion as to plaintiff’s claim for violation of the relevant debt collection statutes.

The court did, however, dismiss plaintiff’s TCPA claims. Stockwell alleged that Credit Management called her using prerecorded or artificial voices, or with an automatic telephone dialing system. As defined by the TCPA at 42 U.S.C. § 227(a)(1), 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.”

“Thus, the use of a number generator is required in order for [the defendant’s] calling technology to be considered an ATDS,” Judge Bauer concluded.

In support of its motion, Credit Management submitted an employee’s declaration that the company’s calling technology does not have a number generator.

“Plaintiff failed to offer any evidence in rebuttal,” the court wrote. “Thus, the uncontroverted evidence presented is that [Credit Management’s] calling technology does not have a number generator. Therefore, [Credit Management’s] calling technology does not meet the requirements of an ATDS as defined by the TCPA.”

To read the order in Stockwell v. Credit Management LLP, click here.

Why it matters: Judge Bauer’s ruling may provide a new defense strategy to the multitude of defendants facing potential liability of $1,500 per alleged violation of the TCPA. Courts have generally accepted the argument that technology qualifies as an ATDS under the Act simply because it has the capacity to automatically dial random or sequential calls – and not necessarily based on whether the machine was doing so at the time of the calls in question. Judge Bauer’s narrow reading of “capacity” under the TCPA may provide defendants with ammunition to argue that their technology does not fall within the scope of liability because a number generator was not used. This holding follows a recent decision in the Northern District of Alabama, where Judge Acker concluded that an autodialer must have the “present capacity, at the time the calls were being made, to store or produce and call numbers from a number generator.” In this case, Hunt v. 21st Mortgage Corp., Judge Acker explained, a defendant “cannot be held liable if substantial modification or alteration of the system would be required to achieve that capability.”