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District of Arizona Grants Summary Judgment on ATDS Issues in the Wake of ACA International v. FCC

The District of Arizona recently became one of the first courts in the country to address the definition of an ATDS in light of the D.C. Circuit’s blockbuster ruling in ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018). Our previous client alert regarding ACA predicted that the decision would provide TCPA defendants with increased opportunities to defeat claims based on plaintiffs’ failure to prove the use of an ATDS. The Herrick v. GoDaddy.com, LLC case exemplifies how defendants can use the ACA decision to combat TCPA claims on this issue and hopefully foreshadows an emerging wave of favorable decisions.

Specifically, in Herrick, the United States District Court for the District of Arizona granted GoDaddy.com, LLC’s (“GoDaddy”) motion for summary judgment because it concluded that the undisputed facts showed that GoDaddy did not use an ATDS to send the text message in question. No. 16-cv-00254 (D. Ariz. May 14, 2018). Plaintiff’s putative class action alleged that GoDaddy violated the TCPA when it sent him an unsolicited text message using the 3Seventy, Inc. text message platform (the “3Seventy Platform”). Id. at p. 3. GoDaddy’s summary judgment motion argued that the 3Seventy Platform did not constitute an ATDS. Id. The D.C. Circuit issued its ruling in the ACA case shortly before the court ruled on GoDaddy’s motion for summary judgment. Id. at p. 7.

Recognizing that the ACA decision is binding outside the D.C. Circuit, the court found that the ruling foreclosed plaintiff’s reliance on “now-defunct FCC interpretations” of the functions a device must perform to be considered an ATDS. Id. at p. 12. In particular, given the “D.C. Circuit’s holding” that the FCC had taken conflicting positions on whether a device must itself have the capacity to generate random or sequential numbers to be called, rather than calling from a database of numbers generated elsewhere, the court declined to defer to the FCC’s pronouncements on that issue. Id. at p. 11. Instead, relying on the language of the statute, the court concluded that a device must itself have the capacity “to store or produce telephone numbers using a random or sequential number generator.” Id. at p. 12. The court explained that “[b]roadening the definition of an ATDS to include any equipment that merely stores or produces telephone numbers in a database would improperly render the limiting phrase ‘using a random or sequential number generator’ superfluous.” Id. Thus, “[t]he statute … is plainly more limited, and requires that the numbers be stored or produced using a random or sequential number generator.” Id. (emphasis in original).

The court next considered whether a device must have the capacity to dial numbers without human intervention in order to be considered an ATDS. Id. at p. 14. Because the ACA opinion “found that the FCC’s rejection of the human intervention test” in the 2015 declaratory ruling was “‘difficult to square’” with the FCC’s prior pronouncements, “[ACA’s] holding on this issue clarifies that this Court is not bound by the FCC’s 2015 rejection of the ‘human intervention’ test.” Id. (quoting ACA, 885 F.3d at 703). Freed to make its own judgment, the court concluded that “a reasonable interpretation of the statute” is that “a device will only constitute an ATDS if it can dial numbers (or send text messages) ‘without human intervention.’” Id.

Applying these principles, the court concluded that the 3Seventy Platform did not qualify as an ATDS for at least two reasons. First, the court held that the 3Seventy Platform did not have the ability to store or produce numbers using a random or sequential number generator because “[n]umbers that were called could only be inputted into the 3Seventy Platform by a preprogramed file or a list provided by the user; the Platform could not randomly or sequentially generate these numbers by itself.” Id. at p. 13. Moreover, even though it was “theoretically plausible” that “the 3Seventy Platform could be reprogrammed to have this capacity, it is undisputed that to enable such capability, a user would have to do much more than simply press a button.” Id.

Second, the court held that the 3Seventy Platform did not qualify as an ATDS because it did not have the ability to dial numbers without “essential human intervention.” Id. at p. 17. GoDaddy successfully identified multiple stages in the process of sending plaintiff the text message at issue that required human intervention. Id. at p. 15. For example, the court highlighted the following elements of human intervention: 1) GoDaddy provided 3Seventy with a list of customer phone numbers; 2) a GoDaddy employee logged-on to the 3Seventy Platform and selected the customer numbers to contact; 3) a GoDaddy employee drafted the text message; 4) a GoDaddy employee selected the time and date to send the text message; and 5) as a final step, a GoDaddy employee entered a code to approve and authorize the sending of the message. Id. This level of human agency precluded a finding that the 3Seventy Platform was an ATDS. Id. at p. 17. Accordingly, the court granted GoDaddy’s motion for summary judgment. Id.

The Herrick decision illustrates that, in light of ACA, courts may be willing to reject “now-defunct FCC interpretations” (id. at p. 12) and rule for defendants when the facts show that the dialing device cannot randomly or sequentially generate numbers or call those numbers without “essential human intervention.” Id. at 17.

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About this Author

Bradley Andreozzi, Litigation Attorney, Complex, Drinker Biddle Law Firm, Chicago
Partner

Bradley J. Andreozzi represents clients in complex high-stakes civil litigation, including class action trials and appeals. Brad has represented clients in virtually every federal appellate court, including the Supreme Court, and in many trial courts throughout the country.

Brad defends clients in class actions under various federal and state consumer protection laws, including the Telephone Consumer Protection Act (TCPA), the Fair and Accurate Credit Transaction Act (FACTA) and many state false advertising statutes. His...

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Matthew Morrissey, Drinker Biddle Law Firm, Litigation Attorney
Associate

Matthew M. Morrissey litigates claims in federal and state courts throughout the country. Matt represents clients in commercial disputes, class actions, internal investigations and financial services litigation. He is also frequently called upon to represent clients in regulatory and enforcement actions involving federal, state and municipal authorities.

Matt is a contributor to the firm's SEC Law Perspectives Blog, which provides reports, discussions, and analyses on noteworthy trends in enforcement and regulatory activity of the U.S. Securities and Exchange Commission (SEC) and other agencies, such as the U.S. Commodity Futures Trading Commission (CFTC).

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