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Yahoo! Part Deux: Court Reconsiders Prior Ruling in TCPA Class Action and Grants Summary Judgment in Favor of Yahoo! on ATDS Use Finding no Ambiguity in the Statutory Definition

Late last week, a District Court in the Northern District of Illinois reconsidered a ruling it made back in 2014 denying Yahoo!’s summary judgment motion, and granted the motion in light of ACA Int’l.  Johnson v. Yahoo!, Inc., No. 14-cv-02028 (N.D. Ill. Nov. 29, 2018).  Notably, this is now the second court outside the Ninth Circuit to expressly refuse to follow Marks on the basis there’s no ambiguity in the statutory definition of ATDS.

Back in 2014, the court in Johnson had reluctantly followed the FCC’s 2003, 2008, and 2012 rulings that interpreted ATDS “to include systems that dialed numbers pulled from a stored list without human intervention,” and denied Yahoo!’s MSJ as a result.  At that time, the court “didn’t agree” with the FCC’s “expansive interpretation,” of the statutory definition of the ATDS, but applied it because it was bound to do so under Seventh Circuit precedent (holding that FCC rulings are binding under the Hobbs Act).  Notably though, the court gave a hat-tip to the PDR case and recognized that this might change given the Supreme Court’s grant of certiorari to determine the binding effect of FCC rulings under the Hobbs Act.

But putting PDR aside, the court found it was no longer bound by the FCC’s prior predictive dialer rulings because all of those rulings were set aside by the D.C. Circuit in ACA Int’l.  The court recognized that while the appeal was based on direct-review petitions from the 2015 order, the D.C. Circuit’s opinion “encompassed a review of all ‘pertinent pronouncements’ by the FCC,” set aside the FCC’s overall “treatment of the qualifying functions of an ATDS,” and thus “wiped the slate clean.”  The court’s conclusion was further supported by the FCC’s 2015 ruling itself in which the Commission “reviewed its past treatment of ATDS functionality, and . . . understood its option to revisit its definition when confronted with arguments about the statutory text.”  And because the FCC had “reaffirmed and reiterated its approach,” it had “brought the entire agency definition of ATDS up for review in the D.C. Circuit.”  Makes perfect sense, and is in line with the reasoning of numerous other courts on this point.

Turning to the statutory definition, the court recognized that “some” courts – including the Ninth Circuit in Marks – “think the statutory language is ambiguous enough to include a device that dials numbers from a stored list (without random or sequential number generation.”  But the court “read the statute differently,” than Marks and found the definition of ATDS is “not ambiguous.”  You know.  Because it isn’t.  The court then reasoned:

The phrase “using a random or sequential number generator” applies to the numbers to be called and an ATDS must either store or produce those numbers (and them dial them).  Curated lists developed without random or sequential number generation capacity fall outside the statute’s scope.

Notably, the court found that its interpretation didn’t render the term “store” in the statutory definition superfluous:

The word “store” ensures that a system that generated random numbers and did not dial them immediately, but instead stored them for later automatic dialing (after, for example,

Based on its findings the court held Yahoo!’s text message platform wasn’t an ATDS because it lacked the requisite functionality, and granted summary judgment in Yahoo!’s favor.

As we reported a few weeks ago, the Roark court was the first to expressly decline to follow Marks.  Johnson makes it two, and the court’s ruling hits all the good points.  Is this the start of a trend outside the Ninth Circuit?  We’ll see.  

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About this Author

Artin Betpera, Class action litigation lawyer, Womble
Senior Counsel

Artin serves as a chief lieutenant on one the nation’s most experienced and powerful class action defense teams.  Precise and analytic, Artin brings over a decade of experience to bear on complex litigation problems.

Artin adeptly manages significant volumes of litigation for some of the country’s largest banks and financial institutions, never losing sight of providing an exceptional level of service to his clients.  He has been a dedicated financial services litigator since starting the practice of law at ground-zero of the financial crisis, affording him with...

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