As we get near Halloween, how about a quick tale of a phantom lurking in our halls?
Amidst all of the hubbub surrounding the big Marks opinion a couple weeks back–including the FCC’s decision to re-open the comment period on its pending Public Notice on the TCPA— it is easy to overlook something as insignificant as a footnote. But footnotes can be important. (Just see footnote 63 of the FCC’s 2015 TCPA Omnibus ruling, as an example.)
To the point–did anyone else notice footnote 9 in Marks? Here’s it is for your consideration:
Because we vacate the district court’s decision on this ground, we decline the reach the question whether the device needs to have the current capacity to perform the required functions or just the potential capacity to do so. Cf. Meyer v. Portfolio Recovery Assocs. LLC, 707 F.3d 1036, 1043 (9th Cir. 2012); Satterfield, 569 F.3d at 951.
So…the potential capacity argument remains viable in the Ninth Circuit post-Marks. That’s actually rather stunning if you pause to think about it.
TCPAland dwellers know well the back story here, but I’ll share for any novices. In 2015 the FCC held that a device could qualify as an ATDS if it had the potential capacity to dial randomly or sequentially. Famous footnote 63 noted that all software-enabled dialing devices have that potential (or latent) capacity because software is inherently “flexible.” For nearly 3 years after the omnibus, therefore, callers were terrified that their pbx was a software-enabled dialing device sufficient to convert manual calls into ATDS calls. And smartphones were certainly subject to the statute. That, of course, is why the D.C. Circuit Court of Appeal reversed the Omnibus in the much ballyhooed decision in ACA Int’l.
After ACA Int’l we all assumed that “potential” capacity was gone. We joined hands, inhaled helium, and sang “Ding Dong the Witch is Dead” to our hearts’ content. Then two circuit courts of appeal–the Third and the Second–quickly issued decisions determining that only present capacity matters, and TCPAland’s glee was affirmed. Indeed the King case from the Second Circuit failed to enumerate the functionalities an ATDS must have the “capacity” to perform, but was quite certain to hold that only the current capacity to do–whatever–suffices.
Since developments occur so quickly in TCPAland it was easy for everyone to move on from potential capacity and forget all about it. But footnote 9 in Marks reminds us of what we all have tried our best to forget– potential capacity is still a menace lurking in TCPA jurisprudence. That door remains cracked open just a bit. And big consequences lurk just beyond.
For instance, although the FCC sought comment regarding the impact of Marks on the ATDS definition yesterday, potential capacity is not mentioned. That’s probably no big deal since Marks did not actually address the issue, but–it is kind of a big deal since Marks intentionally did not address the issue and reserved it for further consideration.
Given that the FCC–tracking ACA Int’l–is looking closely at the practical effect of any new ATDS formulation (i.e. do smartphones become TCPA autodialers again) the “capacity” definition may yet matter. For instance, comments might say–with honesty–that a smartphone lacking a dialer application does not have the current capacity to store and call numbers without human intervention. So the smartphone does not meet the Marksian framework if capacity is limited to current capacity. But any smartphone has the potential for the addition of such an app–which would certainly meet the Ninth Circuit’s new random-generationless ATDS formulation if latent capacity is what matters.
Uh oh. We’re back in capacity land. I hate capacity land.
As they say, the phantom is in the footnotes. Stay safe out there TCPAland.