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FCC Seeks Further Comment on the Definition of an ATDS Following the Ninth Circuit’s Decision in Marks v. Crunch San Diego, LLC

On October 3, 2018, the FCC issued a Public Notice requesting further comment on “what constitutes an automatic telephone dialing system” under the terms of the TCPA in light of the Ninth Circuit’s recent decision in Marks v. Crunch San Diego, LLC, No. 14-56834, 2018 WL 4495553 (9th Cir. Sept. 20, 2018).

As discussed in the Public Notice, the TCPA defines an automatic telephone dialing system (“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.” Public Notice at 1 (quoting 47 U.S.C. § 227(a)(1)). Notwithstanding this limited definition, the Ninth Circuit’s Marks decision found that the statute was ambiguous and ruled that an ATDS means more than the language of the statute. Id. (citing Marks, 2018 WL 4495553, at *8). The FCC noted that the Markscourt “interpreted the statutory language expansively so that an [ATDS] is ‘not limited to devices with the capacity to call numbers produced by a random or sequential number generator, but also includes devices with the capacity to store numbers and to dial stored numbers automatically.”’ Id. (quoting Marks, 2018 WL 4495553, at *9).

The FCC highlighted that the Marks decision clashes with the D.C. Circuit’s ruling in ACA International v. FCC, which “held that the TCPA unambiguously foreclosed any interpretation that ‘would appear to subject ordinary calls from any conventional smartphone to the [TCPA]’s coverage.” Id. (quoting ACA Int’l v. FCC, 885 F.3d 687, 692 (D.C. Cir. 2018)). For a comprehensive analysis of the Marks decision, please refer to our previous blog post.

Accordingly, the FCC announced that it is seeking “further comment on how to interpret and apply the statutory definition of an [ATDS], including the phrase ‘using a random or sequential number generator,’ in light of the recent decision in Marks, as well as how that decision might bear on the analysis set forth in ACA International.” Id. The FCC seeks answers to the following questions:

  • To the extent the statutory definition is ambiguous, how should the FCC exercise its discretion to interpret such ambiguities here?
  • Does the interpretation of the Marks court mean that any device with the capacity to dial stored numbers automatically is an automatic telephone dialing system?
  • What devices have the capacity to store numbers? And do smartphones have such capacity?
  • What devices that can store numbers also have the capacity to dial such numbers automatically? And do smartphones have such capacity?
  • In short, how should the FCC address these two court holdings?
  • The FCC also seeks comment on any other issues addressed in the Marksdecision that the FCC should consider in interpreting the definition of an “automatic telephone dialing system.”

Id.

Interested parties must file comments on or before October 17, 2018. The deadline for reply comments is October 24, 2018.

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About this Author

Marsha Indych, Litigation Lawyer, Drinker Biddle
Counsel

Marsha J. Indych assists her clients with complex business disputes, including contract claims, breaches of fiduciary duty, and business torts. Marsha has experience litigating international business disputes, products liability claims, class action claims, employment disputes, environmental claims, commercial real estate disputes, and bankruptcy adversarial proceedings. She has handled numerous cases in New York's federal and state courts, including the New York State Commercial Division, as well as securities arbitrations before FINRA.

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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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