December 9, 2019

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TCPA Class Action Update — Establishing Use of an ATDS in the 9th Circuit Still a Hurdle

Establishing Use of an ATDS in the 9th Circuit Still a Hurdle at Summary Judgment and the Pleadings Despite Marks

The Ninth Circuit sent defendants reeling when it issued Marks in late 2018. Having determined that prior FCC Automatic Telephone Dialing System pronouncements had been invalidated, the Court analyzed the TCPA’s statutory language and concluded — notwithstanding the plain language of the statute — “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.”[1] Though ominous, in practice the holding is not the slam dunk plaintiffs assumed.

Less than two months before the Ninth Circuit issued Marks, Michele Ammons sued Diversified Adjustment Service, which she claimed called her in connection with a delinquent Sprint account using an ATDS. Ammons v. Diversified Adjustment Serv., No. 18-cv-06489, 2019 U.S. Dist. LEXIS 175842 (C.D. Cal. Oct. 9, 2019). Despite Marks, Diversified shot back with a Motion for Summary Judgment, arguing the system at issue — LiveVox HCI — was not an ATDS. The Central District of California agreed: “[T]o be an ATDS, a system must be capable of automatic dialing, which LiveVox HCI is not.”[2]

To get there, the Court examined evidence showing the system was “purposefully designed to require a human component to initiate each call through th[e] platform, and to be incapable of automated dialing.”[3] Specifically, “a ‘clicker agent,’ must physically click a dialog box to launch each individual call … and verifies that a ‘closer agent’ is available to receive the call before launching it.”[4] Acknowledging that the Ninth Circuit “envisioned that some level of human interaction with a system may still qualify as an ATDS,” LiveVox HCI is a square peg for a round hole because it “goes far beyond merely triggering a system to run automatically” and “requires human interaction to initiate each call.”[5]

While Ammons provides a factual road map out of liability at summary judgment for claims filed in the Ninth Circuit, a number of recent decisions at the pleading stage should give plaintiffs pause before filing a complaint that simply parrots the statute’s ATDS language. See e.g., Tuck v. Portfolio Recovery Assocs., LLC, No. 19-CV-1270, 2019 U.S. Dist. LEXIS 179274, *10 (Oct. 16, 2019) (dismissing claim where “Plaintiff’s complaint simply parrots the statutory definition of an ATDS”); Caruso v. Cavalry Portfolio Servs., No. 19-CV-1224, 2019 U.S. Dist. LEXIS 169377, *11 (S.D. Cal. Sept. 30, 2019) (“Plaintiff has failed to sufficiently allege that an ATDS was used”); Ewing v. Gonow Travel Club, LLC, No. 19-cv-297, 2019 U.S. Dist. LEXIS 120969, *6-*7 (S.D. Cal. July 19, 2019) (“Plaintiff’s FAC and its attachments, in their entirety, show that Plaintiff has not plausibly alleged [defendant] called him using an ATDS”); Bodie v. Lyft, No. 16-cv-02558, 2019 U.S. Dist. LEXIS 9800, *5 (S.D. Cal. Jan. 16, 2019) (granting motion to dismiss where complaint “merely parrots statutory definition of an ATDS”). Together with Ammons, recent decisions stopping plaintiffs at the pleadings confirm that challenging allegations regarding ATDS use remains a viable defense throughout the life of a case in the Ninth Circuit.

ENDNOTES
1 Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052 (9th Cir. 2018).
2 Ammons v. Diversified Adjustment Serv., No. 18-cv-06489, 2019 U.S. Dist. LEXIS 175842, *13 (C.D. Cal. Oct. 9, 2019).
3 Id. at *12.
4 Id.
5 Id. at *14.

 

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Joshua Briones Litigation Lawyer Mintz
Member / Managing Member, Los Angeles Office

Joshua, Managing Member of the firm’s LA office, is a highly experienced trial lawyer with a national practice. He has received awards and national recognition for his innovative approach and specializes in high-stakes, bet-the-company litigation. He represents clients in such industries as financial services, building products, retail, pharmaceuticals, automotive, professional sports, food and beverage, petroleum, chemical manufacturing, health care, high technology, and higher education. He frequently publishes and lectures before national and local bar and industry...

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Esteban Morales, Mintz, Class Action Defense Lawyer, financial services litigation
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Esteban is an experienced litigator whose practice is principally focused on class action defense and financial services litigation. Esteban has successfully defended both small and large corporate clients targeted in class action suits alleging violations of the Telephone Consumer Protection Act, California’s Unfair Competition Law, and California’s Invasion of Privacy Act. Results include dismissals at the pleading stage and without any discovery following aggressive defense strategies. In addition to defending class actions, Esteban has represented clients in real estate, trust and estate, and securities disputes. He is also a member of the firm's Sports Law Practice.

Before joining the firm, Esteban served as in-house Counsel for a major broker-dealer with thousands of registered representatives stationed throughout the country. In his capacity as an in-house attorney, Esteban litigated cases, routinely interfaced with insurance carriers and brokers, managed outside counsel, and advised on regulatory matters.

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