iWe clearly do not have a crystal ball here in TCPAland, otherwise we would have been able to accurately predict the Ninth Circuit’s monumental recent decision in Marks v. Crunch San Diego, LLC, 2018 WL 4495553 (9th Cir. Sept. 20, 2018).
Which now leads us to this question(s): Will courts around the country follow Marks on the definition of an ATDS? Especially knowing that the FCC’s TCPA Omnibus II will be unveiled very, very soon? The following is our best attempts to predict what courts may now do on the ever-evolving issue of what the definition of an ATDS is, prior to the issuance of Omnibus II.
And in fair disclosure of our methodology, lest you think we just try to read tea leaves around here (as we are tea aficionados), we’ve made these predictions by trying to look at what some courts have done with their applications of ACA Int’l in light of the Hobbs Act (which essentially makes that ruling binding across the country), or if we weren’t able to find anything we looked at some pre-ACA Int’l TCPA decisions, and prior to the issuance of Omnibus II.
So here we go, in no particular order:
Let’s again start with the basics – the statutory definition of “ATDS:”
The TCPA defines the term “ATDS” as follows:
- The term “automatic telephone dialing system” [“ATDS”] means 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. 47 USC § 227(a)(1).
DC Circuit Court of Appeals: Our prediction: Most likely to ignore Marks.
The case that started it all: ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. Mar. 16, 2018). As a refresher, ACA Int’l held that an “ATDS” is “equipment with the ‘capacity’ to perform each of two enumerated functions: (i) storing or producing telephone numbers ‘using a random or sequential number generator’ and (ii) dialing those numbers.” Id. at 693.
The ACA Court found that the FCC’s 2015 Ruling that, “‘capacity’ of calling equipment ‘includes its potential functionalities’ or ‘future possibility,’ not just its ‘present ability’ was an impermissible expansive interpretation of “capacity” which had the apparent effect of “embracing any and all smartphones. . . . It is undisputed that essentially any smartphone, with the addition of software, can gain the statutorily enumerated features of an autodialer and thus function as an ATDS.” Id. at 696. The Court also reasoned that, “The TCPA cannot reasonably be read to render every smartphone an ATDS subject to the Act’s restrictions, such that every smartphone user violates federal law whenever she makes a call or sends a text message without advance consent.” Id. at 697.
The ACA Court also found that it was improper for the FCC to espouse the competing interpretations about the “precise functions an autodialer must have the capacity to perform,” stating: “So which is it: does a device qualify as an ATDS only if it can generate random or sequential numbers to be dialed, or can it so qualify even if it lacks the capacity? The 2015 ruling, while speaking to the question in several ways, gives no clear answer (and in fact seems to give both answers) . . . But the Commission cannot, consistent with reasoned decisionmaking, espouse both competing interpretations in the same order.” Id. at 701, 702.
The ACA Court also set aside the Commission’s ruling that the “‘basic function’ of an autodialer is to dial numbers without human intervention, but a device might still qualify as an autodialer even if it cannot dial numbers without human intervention,” reasoning that those “side-by-side propositions are difficult to square.”
9th Circuit: Our prediction: Courts will likely follow Marks.
A recap of the 9th Circuit’s Marks decision:
Marks v. Crunch San Diego, LLC, 2018 WL 4495553 (9th Cir. Sept. 20, 2018): The 9th Circuit Court found that ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018) overturned the FCC’s prior predictive dialer rulings. It also found that the statutory text was “ambiguous on its face,” and that it needed to look at the “context and the structure of the statutory scheme.” Id. at *8. It concluded that the statutory definition of 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 dial stored numbers automatically.” The Court then defined “ATDS” to mean:
“[E]quipment 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 automatically (even if the system must be turned on or triggered by a person).”
District courts in the 9th will likely follow Marks. This is further evidenced by two district court cases that have held that ACA Int’l does not trump existing circuit court precedent. See McMillion v. Rash Curtis & Assoc., 2018 WL 3023449 (N.D. Cal. Jun. 18, 2018) (finding that ACA Int’l did not disturb prior Ninth Circuit rulings on predictive dialers); and Abante Rooter & Plumbing v. Alarm.com, 2018 WL 3707283 (N.D. Cal. Aug. 3, 2018) (finding that ACA Int’l only invalidated the 2015 FCC Order).
4th Circuit: Our prediction: Courts will likely ignore Marks.
In Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, et al., 883 F.3d 459 (4th Cir., Feb. 23, 2018), the appellate court held: “When Chevron meets Hobbs, consideration of the merits must yield to jurisdictional constraints. [A]n Article III court’s obligation to ensure its jurisdiction to resolve a controversy precedes any analysis of the merits … [A]rguing that the district court can put off considering its jurisdiction until after step one of Chevron … turns that traditional approach on its head. [citations] Indeed, a district court simply cannot reach the Chevron question without ‘rubbing up against the Hobbs Act’s jurisdictional bar.’”
A future district court within the 4th Circuit will lack jurisdiction to even consider an argument contrary to the FCC’s new ATDS formulation. Assuming the district courts take that mandate seriously, they should disregard Marks entirely in favor of the FCC’s new ruling, and wait for same.
3rd Circuit: Our prediction: Courts will likely ignore Marks.
In Fleming v. Associated Credit Servs., 2018 WL 4562460 (D. NJ. Sept. 21, 2018), the district court held, one day after Marks, that a predictive dialer is not an ATDS subject to the TCPA, and that the 2003 and 2008 Rulings were overruled by ACA Int’l. Id. at *9.
In Dominguez v. Yahoo, Inc., 894 F.3d 116 (3rd Cir. June 26, 2018), the Third Circuit held that sending text messages only to numbers that had been “individually and manually inputted into its system by a user” is not an ATDS unless it has the present ability to randomly or sequentially generate numbers and dial them. The Court did not weigh in on the debate of whether the 2003 and 2008 predictive dialer rulings remain viable. The Court did however, cite to ACA Int’l’s concern that “any ordinary smartphone could achieve autodialer functionality by simply downloading a random-number-generating app.” Id. at 119.
But see Somogyi v. Freedom Mortg. Corp., 2018 WL 3656158 (D.N.J. Aug. 2, 2018), finding that predictive dialer rulings survived ACA Int’l and that dialing from a list is “random or sequential” dialing.
But see Sieleman v. Freedom Mortg. Corp., 2018 WL 3656159 (D.N.J. Aug. 2, 2018), finding that predictive dialer rulings survived ACA Int’l and dialing from a list is “random or sequential” dialing.
Given the recent Fleming decision, also out of New Jersey, and Dominguez, we predict that future courts within the Third Circuit will ignore Marks and follow Dominguez. Additionally, the holding in Dominguez regarding sending text messages that had been individually and manually inputted by a user, appears to be at odds with Marks.
6th Circuit: Our prediction: Courts will likely ignore Marks.
In Gary v. TrueBlue, Inc., 2018 WL 3647046 (E.D. Mich. Aug. 1, 2018), the court found that the 2003 and 2008 orders were overturned and that dialing from a list of numbers did not qualify as the use of an ATDS. Gary is at odds with Marks.
In Keyes v. Ocwen Loan Servicing, 2018 WL 3914707 (E.D. Mich. Aug. 16, 2018), the court found that the 2003 and 2008 orders were overturned and the Aspect predictive dialing system was not an ATDS.
But see Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc. 788 F.3d 218 (6th Cir. 2015), tackling the meaning of the term “advertisement” under the TCPA, but declining to defer to the FCC’s 2006 ruling on the subject because it found the statutory definition unambiguous, without even mentioning the Hobbs Act’s jurisdictional bar.
Recent decisions appear to support that the rationale in Marks would not be followed within the 6th Circuit.
7th Circuit: Our prediction: Courts will likely ignore Marks.
In Pinkus v. Sirius XM Radio, (N.D. Ill. July 26, 2018), the district court held that the 2003 and 2008 orders were overturned and predictive dialers do not qualify as an ATDS even at the pleading stage.
Assuming the rationale of Pinkus is followed in the 7th Circuit, it is unlikely that courts there will use the new ATDS definition provided by Marks.
11th Circuit: Our prediction: Courts will likely ignore Marks, assuming “human intervention” rule is available
In Glasser v. Hilton Grand Vacations, 2018 WL 4565751 (M.D. Fla. Sept. 24, 2018), the district court found that ACA Int’l left intact the earlier FCC rulings that the basic function of an autodialer is to dial numbers without human intervention, but found that the “click to dial” dialer was not an ATDS.
In Maddox v. CBE Group, 2018 WL 2327037 (N.D. Ga. May 22, 2018), the district court found that the human intervention” test from the FCC’s predictive dialer rulings survived ACA Int’l, but found that the defendant’s clicker system was not an ATDS under this standard.
But see Heard v. Nationstar Mortg. LLC, 2018 WL 4028116 (N.D. Ala. Aug. 23, 2018), finding that the Avaya predictive dialer met the statutory definition of an ATDS regardless of the FCC rulings.
Although the 11th Circuit has found that the FCC’s predictive dialer rulings survived ACA Int’l, they appear to differ from Marks in their reliance on the “human intervention” rule.
2nd Circuit: Our prediction: Courts will likely ignore Marks.
In King v. Time Warner Cable, 894 F.3d 473 (2nd Cir. Jun. 29, 2018), the Second Circuit Court of Appeal held that the TCPA governs only calls made by devices with the current“capacity” to perform the functions of an ATDS. The court did not identify just what those required functionalities actually are. However, the court found that ACA Int’loverruled the FCC’s Omnibus ruling, and that it was binding on it and all other circuit courts of appeal under the Hobbs Act. The King court also focused on ACA Int’l’sconcern about extending the TCPA to “reach every smartphone that could be programmed to make automatic calls through a simple app download.” Id. at 478.
The reasoning in King appears to be at odds with the reasoning in Marks. As such, it is unlikely that courts in the Second Circuit will use the new ATDS definition provided by Marks.
5th Circuit: Our prediction: Courts will likely ignore Marks.
In Lester v. Wells Fargo Bank, N.A., 2018 WL 1220577 (W.D. La. Mar. 8, 2018), the district court granted Wells Fargo’s summary judgment motion. With regard to the TCPA claim, the court held that the plaintiff’s claim was barred because she did not opt out of a prior class action settlement, and that she also expressly consented to the calls.
In Reese v. Anthem, Inc., 2018 Wl 1251658 (E.D. La. Mar. 12, 2018), the district court granted the defendant’s motion to dismiss in a putative class action on the basis that the plaintiff consented to receiving the text messages at issue.
In Dwyer v. USAA Savings Bank, 2017 WL 7805760 (W.D. Tx. Nov. 21, 2017), the district court stayed the matter pending the decision in ACA Int’l, given that the defendant denied using an ATDS.
Nothing in the aforementioned cases (and other cases reviewed but not listed) suggest that courts within the Fifth Circuit would follow Mark’s definition of an ATDS.
8th Circuit: Our prediction: Courts will likely ignore Marks.
In Garcia v. Target Corp., 276 F.Supp.3d 921 (D. Mn. Nov. 3, 2016), the district court stayed the case pending the decision in ACA Int’l.
But see Gould v. Farmers Insur. Exchange, 2018 WL 3729294 (E.D. Mo. Aug. 6, 2018), where the district court denied a stay of the action. However, the district found that ACA Int’l struck down the FCC’s most recent ATDS rulemaking because it “espoused competing interpretations concerning whether the lack of human intervention is a necessary aspect of any ATDS, among other issues.”
Given the acknowledgement of ACA Int’l at least by one district court, it appears that courts within the 8th Circuit would not follow the rationale in Marks.
10th Circuit: Our prediction: Courts will likely follow Marks.
In Lavigne v. First Community Bancshares, Inc., 2018 WL 2694457 (D. Nm. June 5, 2018), the district court granted plaintiff’s motion to certify a class on a TCPA claim. In its opinion, the court cited a number of California district court decisions.
Given the geographical proximity of the 9th and 10th circuits, it appears likely that the district courts in within the 10th circuit would be willing to follow the rationale in Marks.
1st Circuit: Our prediction: Courts will likely ignore Marks.
In Ready v. Synchrony Bank, 2018 WL 1701355 (D. Me. April 6, 2018), the district court denied a motion to dismiss and found that there were sufficient enough allegations to state a claim. In also finding standing to sue, the court stated that it would “adopt the better-reasoned majority approach” that concluded that the “invasion of privacy, annoyance and wasted time associated with robocalls is sufficient to demonstrate concrete injury.” The court also cited ACA Int’l for the definition of an ATDS.
It appears that courts in the 1st Circuit would try to follow a “majority approach,” and perhaps stay and wait for the FCC’s Omnibus II ruling, or follow the rationale in King or Dominguez.
