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Boldly Going: Its Crunch Time and Siruis Business as Individual Businesses Stick their Neck out for TCPA Change (TCPAland FCC Comment Review Vol. II)

As promised, here is Volume II following Volume I, of our team’s analysis on the supplemental comments on the FCC’s TCPA Public Notice.

Crunch San Diego, LLC

No surprises here. Crunch San Diego, LLC was armed to the teeth and swings into action with its brief-like comment that thoroughly attacks Marks. “Marks eviscerates any kind of limitation that would delineate the types of smartphones used daily by millions of consumers from the specific type of automated dialing equipment that Congress intended to regulate – as evidenced by the statue’s plain term,” Crunch states. The gym’s arguments in support of its comment are threefold:

  1. The ATDS definition cannot be read to exclude number generation.

First, Crunch emphasizes that Marks effectively places over 300 million smartphones in violation of the TCPA and gives a useful grammar lesson to help the FCC properly read the plain text of the ATDS definition.

Crunch nicely lays out how the Marks Court changed the meaning of the ATDS:

“The TCPA defines an ATDS as equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.

The Marks Court changed the meaning of an ATDS by reconstructing the definition 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.

In other words, Marks interpreted the phrase “using a random or sequential number generator” as applying only to the word “produce”—not to “store.”

Crunch explains that the grammatical structure of the ATDS definition requires reading the phrase “using a random or sequential number generator” as applied to either the word “produce” or “store.”

Crunch urges the FCC to read the plain text in a manner that is consistent with the Supreme Court’s “instruction that a ‘natural reading’ of ‘or’ ” in the ATDS definition should cover “any combination of its nouns, gerunds, and objects.” So, the disjunctive phrase “to store or produce” before the comma requires reading the ATDS definition as to store telephone numbers using a random or sequential number generator or to produce telephone numbers using a random or sequential number generator.

Marks’s definition however alters the statute’s punctuation and indicates that random or sequential number generation would be optional – virtually allowing every cellphone that can “store numbers to be called” subject to the TCPA, Crunch comments.

2. The FCC should focus on legislative intent.

Next, Crunch insists that the FCC should be guided by Congress’ legislative intent and that the TCPA was enacted to restrict telemarketing calls based on dialing equipment that dials “blocks of sequential or randomly generated numbers.”

Crunch reminds the FCC that Congress enacted the TCPA to combat problems caused by randomly or sequentially dialing – not unsolicited calls dialed from a list. “Congress specifically targeted ‘machines [that] could be programmed to call numbers in large sequential blocks or dial random 10-digit strings of numbers,’ because they ‘resulted in calls hitting hospitals and emergency care providers.’”

3. Marks directly conflicts with the Third Circuit’s interpretation of an ATDS in Dominguez and the express limitation set forth in ACA Intl.

Lastly, Crunch suggests that the FCC should follow Dominguez’s interpretation of an ATDS – an ATDS “must be able to store or produce numbers that themselves are randomly or sequentially generated,” because it is supported by the plain text of the statute and is premised on a straightforward reading of the statute and legislative intent.

Crunch further reminds the FCC that ACA Int’l “held that the TCPA unambiguously foreclosed any interpretation that ‘would appear to subject ordinary calls from any conventional smartphone to the Act’s coverage.”

Crunch also attacks the Marks opinion for creating uncertainty as to what constitutes “automatic dialing.” “This part of the opinion appears to address ‘human intervention’ case law, but does not address any of the dozens of district court cases that had developed the test.” So in conclusion, Crunch urges the FCC to at the very least clarify that the ability to send text messages or dial numbers “automatically” or without “human intervention” is required for an ATDS.

Keep up the good fight Crunch!

The comment can be found here: Crunch San Diego, LLC – FCC Comment

Sirius XM Radio

Echoing many of Crunch’s arguments, Sirius XM Radio also audaciously attacks Marks and leads its comment off with a fun summary showing just how “absurd” Marks’s interpretation of an ATDS is.

Sirius tears apart the Marks’s interpretation and like Crunch, effectively gives a grammar lesson to correct the Ninth Circuit’s reading of the statute – stating that the Ninth Circuit redrafted the statute “adding words here, moving words around there” and stating that the statute cannot be “justifiably read in that tortured manner.”

Like other comments, Sirius also focuses on the overbreadth problem that the Ninth Circuit’s interpretation creates and comments that the TCPA cannot reasonably cover all ordinary equipment like smartphones. “[According] to the Ninth Circuit, every single one of these millions of smartphones is therefore an automated telephone dialing system subject to the TCPA’s $500-per-call-ortext restrictions…” Yup Sirius, “[t]hat can’t be right.”

Sirius reminds the Commission that the same overbreadth problem is what led to the D.C. Circuit’s decision to vacate the 2015 Declaratory Ruling and“[t]he Commission should not bring that unlawful result back in through the back door after the D.C. Circuit rejected it at that front,” Sirius states.

Sirius notes that the Ninth Circuit disregards the legislative purpose of the TCPA’s ATDS provisions. “The problem Congress was trying to address was that random dialing allowed callers to reach and tie up specialized numbers – emergency rooms, hospital rooms, fire departments and the like” and “automated dialing from a handpicked list does not pose similar problems.” Congress did not intend to prohibit targeted efforts to reach known customers, Sirius asserts. “Sirius XM’s vendors call consumers who have already received subscriptions to Sirius XM’s satellite radio service; they do not call everybody in the phone book.”

In concluding its comments, Sirius states, even if the Commission could follow the Ninth Circuit’s interpretation under Chevron, it should not and urges the Commission to confirm that an ATDS must have the capacity to generate and automatically dial random or sequential numbers.

Nicely done by our good friend Shay Dvoretzky and Bryan.

The comment can be found here: Sirius XM – FCC Comment

Third Federal Savings & Loan

A sincere, but effective comment by Third Federal.

Third Federal begins by giving a succinct summary of ACA Int’l and Marks and provides three suggestions for the Commission to “clear up any and all ambiguities going forward”:

“First, Third Federal suggests that the Commission remove the word ‘capacity’ from the statutory definition of an ATDS altogether.” Under the current ATDS definition, Third Federal could manually dial a number of one of its customers and yet still be subject to the TCPA simply because it has equipment that has “capacity” to store numbers of its customers. This scenario was not the intent of Congress, Third Federal states.

Second, Third Federal suggest that the definition of an ATDS be updated to reflect the clear intent of Congress and should not be subject to competing interpretations. “Does the ATDS have to store or produce telephone numbers to be called while using a random or sequential number generator, or was the comma inserted inadvertently? Can an entity store numbers of its customers to be called for specific purposes without the fear of liability?” Great questions, Third Federal.

And third, Third Federal suggests that the intent of the call “should dictate liability under the TCPA.” Third Federal, priding itself on outstanding customer service, states it does not use the telephone to cross sell their customers other products nor does it contact its customers with unnecessary information. Additionally, Third Federal “would like to proactively contact customers impacted by natural disasters with options for relief” but because it has a system that has the capacity to store specific numbers and dial those numbers, it is subject to the TCPA.

Third Federal nicely packages up its comment with a telling statement:

“Third Federal, as with most banks, has no reason to dial random or sequential telephone numbers of the population at large. Banks need to contact their actual customers, for actual reasons, without the fear of liability.” Accordingly Third Federal would like to see the TCPA specifically permit the free flow of information between Bank and customer…”

Well stated, Third Federal.

The comment can be found here: Third Federal Savings & Loan – FCC Comment

We have more coming. Keep an eye out for Volume III friends.

Part 1

Part 3

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.

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About this Author

Associate

Puja Amin practices business litigation with a focus in commercial and finance defense. Puja is part of a nationally-recognized team with broad experience defending some of the nation’s largest and most influential financial institutions against complaints involving the Telephone Consumer Protection Act.

Since the beginning of her career, Puja has provided extensive support and representation throughout all stages of litigation, including motion practice, document discovery, working with experts, negotiating settlements and mediation. She is experienced in handling a broad variety...

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