October 22, 2019

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California State Court Holds That Equipment That Lacks Present Capacity to Use Random or Sequential Number Generator Is Not an Automatic Telephone Dialing System (ATDS)

A few weeks ago we wrote about Hunt v. 21st Mortgage Corp., 2013 WL 5230061 (N.D. Ala. Sept. 17, 2013), in which the United States District Court for the Northern District of Alabama took a narrow view of what qualifies as an automatic telephone dialing system (“ATDS”) under the TCPA.  That definitional issue has been hotly contested because calls that do not use an ATDS do not need prior express consent.  (Our prior summary of the issues and the Hunt decision is available here.)

A state court in California recently followed Hunt.  In Stockwell v. Credit Management, L.P., No. 30-2012-00596110-CU-NP-CXC (Super. Ct. Orange Cty., Cal.) (Bauer, J.), the Superior Court of Orange County granted the defendant’s motion for summary adjudication on an individual plaintiff’s TCPA claim because it concluded that the defendant had not used an ATDS.  After finding the statutory language unambiguous, the court held that the defendant’s equipment did not qualify as an ATDS because the equipment “does not have a number generator” and thus did not “ha[ve] the capacity” to use a number generator at the time the calls were placed:

Here, 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.”  42 U.S.C. § 227(a)(1).  Thus, the use of a number generator is required in order for CMI’s calling technology to be considered an ATDS.

Defendant submitted [a declaration] to support its contention that CMI’s calling technology does not have a number generator.  Plaintiff failed to offer any evidence in rebuttal.  Thus, the uncontroverted evidence presented is that CMI’s calling technology does not have a number generator.  Therefore, CMI’s calling technology does not meet the requirements of an ATDS as defined by the TCPA.

Stockwell, slip op. at 2-3 (emphasis in original) (citing Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009)).  Having found that the defendant’s equipment did not qualify as an ATDS, the court did not reach whether the plaintiff had consented to the calls and then entered summary adjudication in favor of the defendant.  See id. at 3.

Although it did not cite them, the court’s decision sides with Hunt and rejects Nelson v. Santander Consumer USA, Inc., No. 11-0307, 2013 U.S. Dist. LEXIS 40799 (W.D. Wis. Mar. 8, 2013), which interpreted the term ATDS as including not only equipment that “has the capacity” to use a random or sequential number generator at the moment the calls were placed, but also equipment that could conceivably have such a capacity if it were modified at some later date.  With Hunt and now Stockwell, defendants can cite two decisions that apply much needed common sense to this important issue—a number that will hopefully grow as other courts continue to confront this question.

A copy of the Stockwell decision is available here.

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About this Author

Daniel E. Brewer, Attorney, Drinker Biddle, Philadelphia, Commercial Litigation

Daniel E. Brewer has experience in a variety of complex commercial matters, including consumer class actions, complex business disputes, products liability, shareholder derivative actions and other corporate governance matters. In the course of his practice, Daniel handles many aspects of civil litigation, ranging from pre-litigation counseling, to discovery and dispositive motion practice, to trial advocacy and post-trial proceedings. He represents companies and individuals in a broad range of industries, including banking, telecommunications,...

Michael Daly, Drinker Biddle Law Firm, Philadelphia, Litigation and Retail Attorney

Michael P. Daly defends class actions and other complex litigation matters, handles appeals in state and federal courts across the country, and counsels clients on maximizing the defensibility of their marketing and enforceability of their contracts. A recognized authority on class action and consumer protection litigation, he often speaks, comments, and writes on recent decisions and developments in the class action arena. He is also a founder of the firm’s TCPA Team; the senior editor of the TCPA Blog, which provides important information and insight about the Telephone Consumer Protection Act; and a senior member of the firm's Class Actions Team and interdisciplinary Retail Industry Team.

Committed to civil rights and civic engagement, Michael has spearheaded public interest matters meant to prevent racial discrimination, protect the rights of the disabled and incarcerated, prohibit the use of unverifiable voting systems, and preclude the misuse of our laws and abuse of our civil justice system. One of his most recent public interest matters resulted in a landmark settlement that put an end to decades of discrimination by administrative agencies that had refused to make important information about public benefits programs available in alternative formats that were accessible to the blind and visually impaired. As a result of the settlement, thousands of class members have already requested and received documents in accessible alternative formats.