April 23, 2019

April 23, 2019

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April 22, 2019

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Another First For Marks: Court Within First Circuit Court of Appeals Adopts Marks ATDS Definition for the First Time

The shadow of Marks continues to extend across the country and you never know where it will fall next. As we reported last week, the Northern District of Illinois refused to follow Marks. But this week the Federal District Court for the District of Massachusetts applied the Ninth Circuit’s seminal ATDS definition in Gonzales v. Hosopo Corporation, 2019 WL 1533295 (D. Mass. Apr. 9, 2019). This *ahem* marks the first time that Marks has been applied within the First Circuit Court of Appeals footprint, and represents a further expansion of the Ninth Circuit’s TCPA reach.

In Gonzalez the Court considered a motion to dismiss ATDS allegations brought by the Defendant. At the outset of its order, the Court noted that while the parties agreed that ACA International invalidated the FCC’s 2015 predictive dialer ruling, they disagreed as to whether the FCC’s 2003, 2008 and 2012 rulings were also overturned.  The court skirted the issue concluding that irrespective of whether ACA International left the FCC’s pre-2015 rulings intact, the result was the same: an ATDS need only be able to make calls from a stored list of telephone numbers. 

In analyzing the issue of what qualifies as an ATDS, the court concluded that while it’s not an “obvious decision” Marks has it right.  Addressing the Third Circuit’s decision in Dominguez v. Yahoo, 894 F.3d 116 (3d Cir. 2018) and those issued by other district courts finding that an ATDS must be capable of generating random or sequential telephone numbers, the court dismissed those decisions characterizing them largely as ones that have “simply assumed that requirement.” 

Next, the Hon. Judge F. Dennis Saylor IV elaborated that the Ninth Circuit’s reasoning in Marks was bolstered by the fact that interpreting the definition of an ATDS to require that a device have the capacity to generate random or sequential numbers would lead to an anomalous result—at least in his eyes.  In Judge Saylor’s view, adopting such an interpretation would require one to apply the phrase “using a random or sequential number generator” to both “store” and “produce,” resulting in an ATDS being defined to include “equipment which has the capacity to store … telephone numbers to be called [ ] using a random or sequential number generator.”  Judge Saylor concluded that such a definition did not make sense “because it is unclear how an ATDS—or indeed anything—could ‘store’ numbers ‘using’ a number generator.” 

Applying the Marks definition of an ATDS, the court concluded that plaintiffs’ complaint sufficiently alleged ATDS usage.  The allegations that plaintiff Davila-Lynch heard “click and pause” sounds “followed by silence” when answering the calls in question were sufficient to raise an inference that an ATDS was used.  Further, while plaintiff Gonzalez’s allegations that he received calls from a “ViciDial predictive dialer” and “Five9 virtual dialing system” were more problematic, taken together with the allegations that he received eight calls in the span of five weeks that used “scripted telemarketing pitches,” the court concluded that a plausible inference of ATDS usage was raised.   

For those who believed the seemingly anomalous result in Marks would be limited to the Ninth Circuit’s geographic footprint, Gonzales proves you wrong. To date Courts within the Eleventh and now the First Circuit have elected to follow Marks, while district courts within the Seventh and Eighth Circuits have refused. All of this confusion highlights the murky post-ACA International  TCPAWorld that we continue to live in.  Courts continue to struggle with interpreting the definition of an ATDS and are badly split on the issue.  Then again, as Judge Saylor put it—“the TCPA is an unusually confusing statute.” Talk about an understatement.            

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Emily Wallerstein Commercial Litigation Attorney
Senior Associate

Emily Wallerstein focuses her practice on complex commercial litigation in state and federal courts.

She handles a variety of matters on behalf of major corporations, financial institutions and public entities, including contract disputes, accounting and fraud claims, business torts, real estate, and intellectual property matters. 

Emily is well versed in all phases of civil litigation, from the initial pleading stage through the strategic use of pretrial law and motion, discovery, as well as trial and appellate proceedings. Emily also has experience representing clients in...

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