May 25, 2020

Stay It Ain’t So: Court Rejects Primary Jurisdiction Doctrine in TCPA Case Because of “Minimal Risk” of Inconsistent ATDS Rulings – Internet Breaks

Because the TCPA landscape is in complete disarray regarding the definition of an ATDS, we have been opining that the primary jurisdiction doctrine is a TCPA Defendant’s best friend. However, the Western District of Pennsylvania seems to disagree as it denied Defendant’s motion to stay a TCPA suit on primary jurisdiction grounds just this week.

In Baum v. Civ. A. Lenihan ADT LLC, Defendant filed a motion to stay, arguing that the court should stay the TCPA case pursuant to the primary jurisdiction doctrine or, alternatively, the court’s inherent power to control its docket pending the FCC’s anticipated ruling regarding the definition of an ATDS.

In beginning its analysis, the court indicated that the Third Circuit relies on a four-factor test for determining whether a district court should stay a case under the doctrine of primary jurisdiction. Those factors are: (1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency’s particular field of expertise; (2) whether the question at issue is particularly within the agency’s discretion; (3) whether there exists a substantial danger of inconsistent rulings; and (4) whether a prior application to the agency has been made.

After considering each factor, the court concluded that Defendant had not demonstrated the applicability of the primary jurisdiction doctrine to this case. First, the court found that the first factor presented the biggest obstacle to abstention under primary jurisdiction. The court explained that under the first factor, when the disputed issue is “clearly better resolved in the first instance by the administrative agency charged with regulating the subject matter of the dispute,” the court should refer the matter to that agency. However, the court noted that “an agency’s expertise is not a talisman to strip the court of jurisdiction.” Whether courts have tackled this issue before goes directly to whether the current court could competently address the same matter in the case before it.

The court noted that the FCC is not evaluating issues of first impression. Indeed, the court has a significant body of law prior to the FCC’s 2015 Declaratory Ruling on which it can rely in making interpreting the definition of an ATDS. To support this premise, the court pointed to the Third Circuit’s decision in Dominguez v. Yahoo, Inc., in which the Third Circuit simply interpreted the statute as it has prior to the 2015 Declaratory Ruling. Because District Courts and the Third Circuit continue to adjudicate whether a certain device constitutes an ATDS, the court found “no reason why it cannot do likewise.” The court further noted that even if the court follows Fleming v. Associated Credit Servs. and other courts that conclude previous FCC guidance on an ATDS is invalid, the Court would simply proceed to “look to the statute and its language to make an independent determination as to whether such systems are disallowed under the TCPA.” As such, the court found that the first factor did not support a motion to stay under the primary jurisdiction doctrine.

Next, the court found that the second factor supported application of the primary jurisdiction doctrine because the question at issue – what is an ATDS – is within the FCC’s discretion.

Further, under the third factor, the court noted that that “agency inaction” in recent years equates with “minimal risk of inconsistent rulings.” The court recognized that the FCC has been very active in light of ACA International and Marks, seeking multiple rounds of comments on many issues pertaining to the TCPA. However, the court still concluded that this factor weighed in favor of abstention because the court has not yet been asked to rule on a TCPA issue as Defendant had not yet filed a response to the complaint. Therefore, there is a possibility that the FCC concludes its review before there is an issue of statutory interpretation presented to the court.

Finally, the court quickly moved on from the fourth factor. It acknowledged that the agency is currently and actively looking into the questions at issue here, but made note that the extent to which the FCC issues rules and regulations on each of the matters identified in the notices is speculation.

Ultimately, the court found that some of the factors weighed in favor of application of primary jurisdiction, but emphasized that abstention “is the exception rather than the rule.” The court concluded that “this is not one of those exceptional cases that calls for primary jurisdiction abstention” because this court is competent to decide the matters that may eventually be brought by the parties. As such, Defendant’s motion to stay Plaintiff’s TCPA claim was denied.

We here in TCPAland still believe that if an agency is set to resolve a disputed issue of statutory interpretation, courts should exercise restraint and allow the agency its chance to speak before weighing in on the issue. But I suppose we’re not the ones wearing the robes here. Let the frenzy continue…

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About this Author

Susan Nikdel, Womble, litigation attorney

Susan represents clients in commercial and financial services litigation, particularly Telephone Consumer Protection Act (TCPA) cases. She is part of a team that has handled more than 600 TCPA cases, including more than 50 national class actions.

Prior to beginning her legal career, Susan served as a Judicial Extern for the Honorable Theodor C. Albert in the U.S. Bankruptcy Court, Central District of California.  She is a Certified Mediator.

Susan is fluent in Farsi/Persian and conversational in Spanish.