Category: Other Topics

1
In Wake of ACA Int’l, Ninth Circuit Adopts Expansive Definition of ATDS
2
D.C. Circuit Strikes Key Elements of FCC’s 2015 Order Interpreting the TCPA, Upholds Certain Provisions
3
U.S. House Judiciary Committee Examines Lawsuit Abuse and the TCPA
4
Rep. Virginia Foxx Seeks to Prohibit Political Robocalls to Numbers on Do-Not-Call Registry
5
Jury Awards $20M Verdict For Violation of National Do-Not-Call Rules
6
Ajit Pai to be Named New FCC Chairman
7
TCPA Class-Action Plaintiff Must Arbitrate Claims
8
Court Reaffirms Dismissal of TCPA Claims By Professional Plaintiff
9
New House Energy & Commerce Committee Leaders Good News for TCPA Reform
10
Sixth Circuit Reverses Denial of Class Certification and Dismissal Under Rule 68 in Purported Unsolicited Fax Case

In Wake of ACA Int’l, Ninth Circuit Adopts Expansive Definition of ATDS

By: Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller

The U.S. Court of Appeals for the Ninth Circuit recently adopted an expansive definition of the term “automatic telephone dialing system” (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  In Marks v. Crunch San Diego LLC, the panel held that, in light of ACA Int’l, the U.S. Court of Appeals for the D.C. Circuit’s landmark decision interpreting certain provisions within the TCPA (previously discussed here) and based on the panel’s own review of the TCPA, the statutory definition of an ATDS includes devices that store telephone numbers to be called, whether or not the device has the ability to generate numbers randomly or sequentially.  In so holding, the Ninth Circuit splits from a number of other decisions holding that an essential element of an ATDS is the capacity to generate random or sequential numbers.

The TCPA defines 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.”  In ACA Int’l, in brief, the D.C. Circuit invalidated the Federal Communications Commission (“FCC”)’s interpretation of two key questions raised by the statutory definition of an ATDS, namely “(i) when does a device have the ‘capacity’ to perform the two enumerated functions; and (ii) what precisely are those functions?”  In so doing, the D.C. Circuit created uncertainty as to what features or attributes of a dialing system would bring it within the scope of the ATDS definition.

Plaintiff Jordan Marks filed suit against Crunch San Diego LLC (“Crunch”) after he joined the gym and received three text messages over a period of eleven months.  Crunch utilized a system called Textmunication.  In this system, phone numbers are captured and stored in one of three ways: an operator of the system can manually enter a phone number into the system; a current or potential customer may respond to a marketing campaign with a text; or a customer may provide a phone number by filling out a consent form on a Textmunication client’s website.  A client of Textmunication can then design a marketing campaign and Textmunication will automatically send the desired messages to the stored phone numbers at a time scheduled by the client.  When Crunch wants to send a text through Textmunication, a Crunch employee logs into the system, selects the recipient phone numbers, generates the content of the message, and selects the date and time for the message to be sent.  The messages are then automatically sent at the appointed time.

Prior to the decision in ACA Int’l, the district court held that Textmunication was not an ATDS because it lacked the present or potential capacity “to store or produce telephone numbers to be called, using a random or sequential number generator” and granted summary judgment for Crunch.  Marks appealed the decision, and following his appeal, ACA Int’l was decided.  The Ninth Circuit then reversed, holding that a system could be an ATDS if it has the capacity to store a list of numbers and call those numbers automatically, even if the system does not have the ability to generate random or sequential lists of numbers.  In doing so, the Ninth Circuit first reviewed the statutory definition of ATDS as set forth by Congress in 1991 and determined that the provision is ambiguous, and, accordingly, that it was appropriate to look to the context and structure of the statutory scheme.  The Ninth Circuit found that Congress intended to regulate devices that make automatic calls, including those devices that make automatic calls from lists of recipients, rather than utilizing a random or sequential number generator.  The Ninth Circuit rejected Crunch’s argument that because the system was not fully automatic, it did not qualify as an ATDS, holding that Congress had been clear that it was targeting equipment that could engage in automatic dialing rather than equipment that operated without any human oversight or contact.  The Ninth Circuit remanded the matter back to the district court for further proceedings.

In addition to the Ninth Circuit, several other courts have discussed the effect of ACA Int’l on the definition of ATDS:

  • In Gonzalez v. Ocwen Loan Servicing, LLC, the Court concluded that a predictive dialer that lacks the capacity to generate random or sequential telephone numbers and dial them, but it does include a predictive dialer that has the “present ability” to do so.
  • In Washington v. Six Continents Hotels, Inc., the Court agreed that ACA Int’l set aside not only the FCC’s 2015 ruling but also the FCC’s historic treatment of which devices qualify as an ATDS. 16-3719, 2018 WL 4092024, at *3 (C.D. Cal. Aug. 24, 2018)  The Court then determined that the complaint adequately alleged the use of an ATDS by claiming that the defendant “acquired Plaintiff’s number, stored it in a database connected to its telephonic or computer system . . . [the system] . . . has the capacity to generate random numbers . . . has the capacity to generate sequential numbers . . . [and] has the capacity to store and dial the random or sequential numbers it generates just like it stored and dialed Plaintiff’s number.”  Id.

  • In Heard v. Nationstar Mortg. LLC, the Court held that a system that could and did store customer information for at least 24 hours and did not have the capacity to store or produce telephone numbers to be called using a random or sequential number generator fell within the definition of ATDS. 16-694, 2018 WL 4028116, at *5-6 & n.2 (N.D. Ala. Aug. 23, 2018).
  • In King v. Time Warner Cable Inc., the Second Circuit determined that qualification as an ATDS was limited to those devices that were “capable at the time of use” of performing the functions of an autodialer, absent any modifications to the device’s hardware or software. 849 F.3d 473, 476–77 (2d Cir. 2018).
  • In Dominguez ex rel Himself v. Yahoo, Inc., the Court held that, absent any evidence that the device had the capacity to generate random or sequential telephone numbers and dial those numbers, the plaintiff failed to show that the text messaging system was an ATDS in light of ACA Int’l. 894 F.3d 116, 119 (3d Cir. 2018).

Given the split among courts on how to interpret ATDS, uncertainty will continue to prevail until there is additional clarification, either from the Supreme Court or the FCC.  The FCC has requested further comment from the public regarding the interpretation of the TCPA in light of this decision.

D.C. Circuit Strikes Key Elements of FCC’s 2015 Order Interpreting the TCPA, Upholds Certain Provisions

By Joseph Wylie, Andrew C. Glass, Molly K. McGinley, Gregory N. Blase, Nicole C. Mueller, and Roger L. Smerage.

On March 16, 2018, in a long-awaited decision, the U.S. Court of Appeals for the District of Columbia Circuit vacated key provisions of the 2015 Federal Communications Commission order regarding the Telephone Consumer Protection Act, 47 U.S.C. § 227, including provisions regarding the definition of an autodialer and calls to reassigned wireless numbers.  Click here for a full discussion of the decision.

U.S. House Judiciary Committee Examines Lawsuit Abuse and the TCPA

By Pamela Garvie, Elana Reman, Andrew Glass, Gregory Blase, Joseph C. Wylie II and Molly K. McGinley

On June 13, the U.S. House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice held a hearing on “Lawsuit Abuse and the Telephone Consumer Protection Act”. The House Energy & Commerce Committee has primary jurisdiction over the TCPA.  But the Judiciary Committee oversees all matters related to the administration of justice in federal courts and has been active on a number of  litigation reform matters, including most recently class action reform legislation. The Subcommittee held the hearing in response to the fact that between 2010 and 2016, TCPA case filings increased by 1,272%, and today TCPA lawsuits are the largest category of class actions filed in federal court.  Although some of the Subcommittee’s Democratic members, including Ranking Democrat Steve Cohen (D-TN), questioned the Committee’s jurisdictional interest in the TCPA, the hearing focused on TCPA reform––specifically with an eye toward reducing lawsuit abuse, and the Republicans said they would work with Energy & Commerce on any legislative proposals.

Read More

Rep. Virginia Foxx Seeks to Prohibit Political Robocalls to Numbers on Do-Not-Call Registry

By Pamela J. Garvie, Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, and Molly K. McGinley

Rep. Virginia Foxx (R-NC) has introduced a bill, H.R. 740 (the “Robo Calls Off Phones Act” or “Robo COP Act”), to “stop the intrusion of political robocalls in homes across America.” Rep. Foxx stated that “politicians made sure to exempt political robo-calls from the power of the ‘Do Not Call’ registry. If these calls weren’t such a nuisance, their blatant exclusion would be laughable.” Claiming that eligible voters receive more than 20 political prerecorded voice calls per day, Rep. Foxx seeks through the bill to end the “robocall loophole” for politicians.

Read More

Jury Awards $20M Verdict For Violation of National Do-Not-Call Rules

By Joseph C. Wylie II, Molly K. McGinley, Lexi D. Bond

A Greensboro, North Carolina jury handed down a $20.5 million verdict against Dish Network (“Dish”) last week in a class-action lawsuit, Krakauer v. Dish Network L.L.C., case number 1:14-cv-00333, brought under the Telephone Consumer Protection Act (“TCPA”). The verdict came after a five-day trial presided over by U.S. District Judge Catherine Eagles of the Middle District of North Carolina. Class representative Dr. Thomas Krakauer alleged Dish was responsible for telemarketing calls placed by an authorized Dish dealer to persons whose telephone numbers were on the National Do Not Call Registry.

Read More

Ajit Pai to be Named New FCC Chairman

By Pamela J. Garvie, Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, and Molly K. McGinley

On Friday, January 20, 2017, shortly after the conclusion of the presidential inauguration, news broke that Ajit Pai, a Republican Commissioner on the Federal Communications Commission (“FCC” or “Commission”) and its acting Chairman, will be named the permanent Chairman of the FCC. Commissioner Pai will assume the permanent chairmanship from former Chairman Tom Wheeler, who resigned effective January 20, 2017.  Because Commissioner Pai is a sitting member of the FCC, his appointment as permanent chair does not require Senate confirmation.

Read More

TCPA Class-Action Plaintiff Must Arbitrate Claims

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Matthew T. Houston

The U.S. District Court for the Western District of Washington (“Court”) recently allowed a defendant to enforce the arbitration provision in a TCPA plaintiff’s wireless agreements even though the defendant was not a party to the wireless agreements. The plaintiff in Rahmany, et al. v. T-Mobile USA, Inc., et al., Case No. 2:16-cv-01416-JCC (W.D. Wash.), brought suit against Subway Sandwich Shops, Inc. and the plaintiff’s wireless carrier, alleging that the companies violated the TCPA by sending unsolicited text messages to the plaintiff and a putative class of individuals. Shortly after filing suit, the plaintiff voluntarily dismissed the wireless carrier.  Subway, however, sought to enforce the mandatory arbitration clause in the agreement between the plaintiff and his wireless carrier, even though Subway was not a party to that agreement.  The clause required the plaintiff to individually arbitrate disputes unless the plaintiff opted out of the provision within 30 days of signing the contract, which the plaintiff had not done.

Read More

Court Reaffirms Dismissal of TCPA Claims By Professional Plaintiff

By Joseph C. Wylie II, Molly K. McGinley, and Lexi D. Bond

In a decision released last week, the District Court for the Northern District of Illinois denied a plaintiff’s motion for an order altering the court’s order dismissing the second amended complaint without prejudice and granting it leave to file an amended complaint. In Telephone Science Corporation v. Asset Recovery Solutions, LLC, the court previously granted defendant Asset Recovery Solutions, LLC’s (“ARS”) Rule 12(b)(6) motion to dismiss the second amended complaint of plaintiff Telephone Science Corporation (“TSC”), with prejudice, for failure to satisfy the “zone-of-interests” test under the Telephone Consumer Protection Act (“TCPA”) (previously discussed here).

Read More

New House Energy & Commerce Committee Leaders Good News for TCPA Reform

By Pamela J. Garvie, Peter V. Nelson, Elana Reman, Andrew C. Glass, Joseph C. Wylie II, and Gregory N. Blase

Last month, Rep. Greg Walden (R-OR) was selected by U.S. House of Representatives Republicans as the new Chairman of the House Energy and Commerce Committee. He succeeds Rep. Fred Upton (R-MI), who had to step down due to term limits. Today, Rep. Walden announced Energy and Commerce Committee Subcommittee leaders for the 115th Congress. Rep. Marsha Blackburn (R-TN) was named the Chair of the Subcommittee on Communications & Technology and Rep. Leonard Lance (R-NJ) will serve as Vice Chairman.

Read More

Sixth Circuit Reverses Denial of Class Certification and Dismissal Under Rule 68 in Purported Unsolicited Fax Case

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller

The Sixth Circuit reversed a lower court’s denial of class certification and dismissal of an action following a lapsed offer for individual judgment in a decision released earlier this month.  In doing so, the Sixth Circuit held that a defendant opposing class certification in a Telephone Consumer Protection Act (“TCPA”) case on the ground that issues of individualized consent predominate must do more than present “speculation and surmise to tip the decisional scales” because a “possible defense, standing alone, does not automatically defeat predominance.”  The court also held that a defendant may not escape potential class-wide liability through an unaccepted offer of individual judgment.

Read More

Copyright © 2018, K&L Gates LLP. All Rights Reserved.