As we have previously reported, the ACA International decision from the D.C. Circuit changed the face of litigation in the Telephone Consumer Protection Act (TCPA) world by striking down the Federal Communication Commission’s (FCC) 2015 automatic telephone dialing system (ATDS) guidance. The more recent Marks v. Crunch San Diego, LLC case from the Ninth Circuit has spurred additional confusion on what constitutes an ATDS. As part of our continuing coverage in this area, the Manatt TCPA team has been reporting on significant developments at the FCC and on noteworthy (i.e., dispositive or class certification-related) federal district- and appellate-level decisions interpreting, applying or otherwise evaluating ACA Int’l in ways that may impact our readers.

Recently, one district court case from the Third Circuit, two cases from the Seventh Circuit, one case from the Eighth Circuit and one case from the Ninth Circuit have interpreted whether a predictive dialer constitutes an ATDS under post-ACA Int’l standards and came to opposite conclusions.

Wilson v. Quest Diagnostics Inc., No. CV 2:18-11960, 2018 WL 6600096 (D. N.J. Dec. 17, 2018). In this putative class action in the District of New Jersey, Judge Martini denied defendant’s motion to dismiss the claims that defendant used a predictive dialer to make calls without express consent in violation of the TCPA. Plaintiff alleged she heard a pause before a representative started speaking to her and therefore defendant used a predictive dialer, which she argued constitutes an ATDS. The court followed the Third Circuit’s interpretation of an ATDS as explained in Dominguez, which held that ACA Int’l is binding on the courts and that whether a device is an ATDS depends on present capacity, not latent or potential capacity. Therefore, a predictive dialer qualifies as an ATDS so long as it has the present capacity to dial numbers without human intervention. As in Dominguez, the court interpreted ACA Int’l as invalidating only the 2015 FCC Order. The court concluded that plaintiff adequately alleged the use of an ATDS where plaintiff alleged that defendant called using a predictive dialer as evidenced by a momentary pause and “dead air” before hearing a representative’s voice. The court also noted that a predictive dialer is “a device considered an ATDS under binding precedent.” Defendant argued that a predictive dialer is not an ATDS unless the device can dial and call numbers randomly or sequentially, but cited cases decided at summary judgment, therefore the court did not find such arguments persuasive.

To read the entire decision in Wilson v. Quest Diagnostics Inc., please click here.

Larson et al. v. Harman Mgmt. Corp.; 3Seventy, Inc., No. 1:16-cv-00219-DAD-SKO (E.D. Cal. Dec. 10, 2018). Most recently, the Eastern District of California followed the definition of ATDS set forth by the Ninth Circuit in Marks v. Crunch San Diego and denied defendant Harman Management’s motion to stay the proceedings pending FCC guidance on the definition of an ATDS. The court concluded that Marks defined an ATDS as “equipment which has the capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers automatically (even if the system must be turned on or triggered by a person) . . . .” Therefore, Marks provides controlling authority and is binding in the Eastern District of California on the issue of whether a device constitutes an ATDS.

To read the entire decision in Larson et al. v. Harman Mgmt. Corp.; 3Seventy, Inc., please click here.

Johnson v. Yahoo!, Inc., No. 14 CV 2028, 2018 WL 6426677 (N.D. Ill. Nov. 29, 2018). On reconsideration of a summary judgment motion that was denied prior to the FCC’s 2015 Order and ACA Int’l, Judge Shah in the Northern District of Illinois ruled that Yahoo’s device was not an ATDS under the statutory definition set forth in the TCPA. Plaintiff argued that the state of the law had not changed because the initial decision took place before the FCC’s 2015 Order, which was the only Order that ACA Int’l struck down. The court rejected plaintiff’s argument stating that ACA Int’l struck down the prior FCC treatment of the term ATDS and concluded that the FCC’s prior orders are no longer binding. The court stated that the statute is not ambiguous and that “[c]urated lists developed without random or sequential number generation capacity fall outside the statute’s scope.” Therefore, the PC2SMS system that Yahoo used to send text messages to plaintiff by dialing numbers from a stored database but which did not have capacity to generate random or sequential numbers did not constitute an ATDS. “A device that stores or produces numbers without any use of a random or sequential number generator is a different device.” The court granted Yahoo’s motion to reconsider and ruled that Yahoo was entitled to judgment as a matter of law.

To read the entire decision in Johnson v. Yahoo!, Inc., please click here.

Stewart L. Roark v. Credit One Bank, N.A., No. CV 16-173 (PAM/ECW), 2018 WL 5921652 (D. Minn. Nov. 13, 2018). In Roark, Judge Magnuson in the District of Minnesota found that ACA Int’l invalidated all prior FCC orders regarding the definition of an ATDS. Therefore, while there was “no question that the devices used by [Defendant] Credit One’s agents [were] predictive dialing systems[,] predictive dialing systems are no longer always considered autodialers under the TCPA.” The court stated that the correct inquiry is whether a device can generate numbers to dial either randomly or sequentially. In granting summary judgment for defendant, the court ruled that plaintiff Roark failed to show a genuine issue of material fact regarding the required functionality of defendant’s dialing system and that defendant asserts that the systems do not have the requisite “capacity” to generate random or sequential numbers to dial. Therefore, the predictive dialers at issue did not violate the TCPA. In addition to its ruling on the definition of ATDS, the court made an important decision regarding reassigned numbers. Here, Credit One had obtained consent from the person who originally maintained the phone number that had been reassigned to Roark. The court stated that ACA Int’l invalidated the portion of the FCC order that provided a safe harbor for reassigned numbers and set aside the FCC’s treatment of reassigned numbers as a whole. Therefore, in determining whether Credit One had prior express consent, the court considered the “reasonableness of the caller’s reliance on a prior number holder’s express consent.” The court concluded that Credit One had express consent from the original number owner to call at the number he provided, including consent to call with prerecorded messages, and that it was reasonable for Credit One to rely on this consent to call the number at issue.

To read the entire decision in Stewart L. Roark v. Credit One Bank, N.A., please click here.

Maes v. Charter Communication d/b/a Spectrum Cable and Does 1-10, 18-cv-124-jdp, 2018 WL 5619199 (W.D. Wisc. Oct. 30, 2018). In this case, the Western District of Wisconsin denied defendants’ motion to dismiss the allegations that defendants repeatedly called him using an ATDS. The court concluded that the 2003 FCC Order remains valid in the wake of ACA Int’l, a case that provides binding precedent according to the court. The court ruled that plaintiff adequately alleged the use of an ATDS where he claimed that he heard dead air before speaking to a representative. Plaintiff claimed defendants used a predictive dialer—“equipment that dials numbers and, when certain computer software is attached, also assists telemarketers in predicting when a sales agent will be available to take calls”—to place calls to him. The court concluded that plaintiff stated a claim for relief because it is bound by the FCC’s 2003 ruling that a predictive dialer constitutes an ATDS under the TCPA.

The defendant in Maes asked the court to follow Pinkus v. Sirius XM Radio, Inc., 319 F. Supp. 3d 927 (N.D. Ill. 2018), a case which held that all prior FCC orders were invalidated, and which ruled that an ATDS must have the capacity to generate telephone numbers, either randomly or sequentially, and then to dial those numbers. The Pinkus court found that predictive dialers lacking such capacity are not ATDSs. However, the Maes court was not persuaded by Pinkus. Interestingly, Maes followed the Ninth Circuit’s opinion in Marks v. Crunch, whereas Pinkus followed the Third Circuit in Dominguez v. Yahoo!. Other than these two opinions, there are no other Seventh Circuit district court post-ACA Int’l opinions, and the Seventh Circuit Court of Appeals itself has not ruled on an ACA Int’l case to date.

To read the entire decision in Maes v. Charter Communication d/b/a Spectrum Cable and Does 1-10, please click here.

A Numerical Overview of Post-ACA Int’l Cases

At the time of publication of this edition of TCPA Connect, the overall landscape of post-ACA Int’l case law breaks down as follows:

Case Law by FCC Order Validity

  • 7 cases say all FCC orders invalidated
  • 25 cases say only some/part of FCC orders invalidated

Case Law by Circuit

  • 0 cases from the First Circuit district courts
  • 12 cases from the Second Circuit district courts and 1 from the Second Circuit
  • 4 cases from the Third Circuit district courts and 1 from the Third Circuit
  • 0 cases from the Fourth Circuit district courts
  • 0 cases from the Fifth Circuit district courts
  • 5 cases from the Sixth Circuit district courts
  • 3 cases from the Seventh Circuit district courts
  • 1 case from the Eighth Circuit district courts
  • 10 cases from the Ninth Circuit district courts and 1 from the Ninth Circuit
  • 0 cases from the Tenth Circuit district courts
  • 9 cases from the Eleventh Circuit district courts

Case Law by Appellate Level

  • 3 appellate-level cases (Second, Third, Ninth Circuits)

Case Law by Autodialer Decision

  • 16 cases where autodialer was found
  • 15 cases where autodialer was not found
  • 8 cases where human intervention was a deciding factor in determining that system was not an ATDS