Siding with courts that evaluate a system’s present – not potential – capacity to store or produce telephone numbers when considering whether a system is an automatic telephone dialing system pursuant to the Telephone Consumer Protection Act (TCPA), a California federal court judge granted the defendant’s motion to dismiss.

Jordan Marks sued Crunch San Diego after allegedly receiving three unwanted text messages. The gym chain moved to dismiss the suit, arguing that it could not be liable under the statute because it did not use an ATDS. Crunch used a third-party Web-based platform to send promotional text messages, the company explained.

Phone numbers are inputted into the platform in one of three ways: when Crunch manually uploads a phone number, when a consumer responds to a Crunch marketing campaign, or when a consumer manually inputs a phone number on a consent form on the Crunch website.

To send a message, Crunch must select the desired phone numbers, generate a message, and select the date. The system then sends the texts on the given date and stores the numbers used.

But according to Crunch, the system lacks the capacity to store and call telephone numbers by using a random or sequential number generator as required by Section 227(a)(1) of the TCPA.

Electing not to rely upon commentary from the Federal Communications Commission (FCC), U.S. District Court Judge Cynthia Bashant agreed with Crunch.

The FCC’s 2012 regulations interpreted the definition of ATDS broadly to include “any equipment that has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly generated or come from calling lists.” But Judge Bashant said the FCC’s definition was based on policy considerations, not the plain language of the statute, and was neither binding nor convincing.

Instead, the court followed decisions defining the “capacity” of an ATDS as “the system’s present, not potential capacity to store, produce, or call randomly or sequentially generated telephone numbers,” [emphasis in the original] citing a March opinion from a Washington federal court.

According to the court, focusing on potential capacity would encompass many modern devices and potentially subject all smartphone and computer users, including any phone featuring a built-in phonebook, to TCPA liability. The court concluded that, “It seems unlikely that Congress intended to subject such a wide swath of the population to a law designed to combat unwanted and excessive telemarketing.”

The court also said the phrase “random or sequential number generator” has some limiting effect and “[i]t therefore naturally follows that ‘random or sequential number generator’ refers to the genesis of the list of numbers, not to an interpretation that renders ‘number generator’ synonymous with ‘order to be called.’”

As telephone numbers enter the Crunch system through one of only three methods that all “require human curation and intervention,” none “could reasonably be termed a random or sequential number generator” within the meaning of the TCPA.

Further, the system also did not have the potential capacity to become an ATDS, unlike the platform analyzed in a California federal court decision from earlier in the year where Yahoo’s system was deemed to be an ATDS because the company could write new software code by adding a sequential or number generator to the system.

Crunch makes use of a third-party platform that “explicitly bans inputting numbers into its system without either a response to a call to action or ‘written consent,’” the court noted. “Because Defendant’s access to the platform is limited, it similarly lacks the future or potential capacity to become an ATDS.”

The court granted Crunch’s motion for summary judgment.

To read the order in Marks v. Crunch San Diego, click here.

Why it matters: The Marks decision joins a handful of courts that have rejected the FCC’s interpretation of the TCPA and have taken a practical, commonsense approach to the question of whether a system constitutes an ATDS under the statute. While the ruling will prove valuable to defendants in California federal court for its focus on the present and not potential capacity of a platform to randomly or sequentially dial numbers, companies should note that courts in other jurisdictions remain divided on the issue.