The district court in the Northern District of Illinois granted summary judgment to the defendant in a TCPA case on the grounds that its dialing system no longer fit the definition of an automatic telephone dialing system (“ATDS”) because it dialed numbers from a stored list. In doing so, the Court reversed its previous decision on summary judgment and clearly rejected the FCC’s previous guidance on the issue.

The case is Johnson v. Yahoo!, Inc., No. 14-cv-2028 (N.D. Ill. November 29, 2018). A copy of the opinion can be found here.

Plaintiff Rachel Johnson alleged the defendant’s text messaging services caused text messages to be sent to her by pulling her number from its address book and automatically sending text messages to her cell phone, violating the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”). In first denying the defendant’s motion for summary judgment in 2014, the Court reluctantly relied on FCC decisions from 2003, 2008, and 2012 that interpreted “ATDS” to include systems that dialed numbers from a stored list without human intervention. The Court noted its disagreement with this expansive interpretation but concluded that it was bound to follow the FCC guidance.

However, after ACA International v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018) overturned the FCC’s 2015 Order, which reaffirmed the previous orders, the defendant filed a motion for reconsideration and the Court jumped at the chance to revisit its previous ruling. The Court first considered whether ACA International left the previous FCC Orders intact – a question that has divided courts since March. It found that ACA International had “wiped the slate clean” because the 2015 Order “brought the entire agency definition of ATDS up for review in the D.C. Circuit.” The court in ACA International “was telling the agency to start over.”

No longer bound to apply the “more expansive interpretation” of the FCC, the Court turned to the text of the statute. Finding the statute “is not ambiguous,” the Court determined an ATDS must store or produce numbers using a random or sequential number generator and dial those numbers. Although the Court relied on the Ninth Circuit’s decision in Marks v. Crunch San Diego, LLC for the proposition that the previous orders no longer had effect, it took a more commonsense approach to its reading of the statute and did not adopt the expansive interpretation in Marks. Therefore, the Court granted the defendant’s motion for reconsideration and granted summary judgment in its favor because its system did not meet the definition of an ATDS.

In the wake of ACA International, courts have split on a number of questions, including the effect of the decision on prior FCC Orders and what the proper definition of an ATDS is now. The Court in Johnson joined a number of courts that have found the prior FCC rulings to be eviscerated. Likewise, many courts considering the definition of an ATDS have found that a system must have the capacity to dial numbers that have been randomly or sequentially generated to qualify, including published opinions from the Second Circuit in King v. Time Warner Cable, Inc. and the Third Circuit in Dominguez v. Yahoo, Inc. However, some courts, such as Marks, have read the statute to include the expansive definition previously embraced by the FCC, even though the D.C. Circuit rejected that expansive definition.

Fortunately, the FCC appears poised to resolve this uncertainty and issue guidance on the definition of what constitutes an ATDS. Currently before it is a petition for a declaratory ruling on the definition of an ATDS and it has sought comment on the issue. Most industry insiders expect a ruling from the FCC soon, and many expect it to adopt a similar definition as the court in Johnson. Troutman Sanders will continue to monitor the TCPA landscape in the meantime.