The Court of Appeals for the Ninth Circuit issued its opinion in Marks v. Crunch San Diego on September 20, 2018.  Marks v. Crunch San Diego, LLC, 2018 WL 4495553 (9th Cir. 2018). The court held that equipment needs only “store” numbers and automatically dial them to qualify as an ATDS.  The court held: “the statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.”  Slip. Op. at 4.  As a result, the court vacated and remanded the district court’s grant of summary judgment to the defendant, finding that there was a genuine question of fact regarding whether the equipment, which texted numbers from a set list, was an ATDS.

The court first held that the statutory definition of ATDS is ambiguous, which gave rise the D.C. Circuit’s ruling in ACA Int’l that the definition was susceptible of more than one—but not simultaneous and competing—interpretations by the FCC.   Slip Op. at 13.  The court also held that all prior FCC orders on the definition of ATDS were set aside by ACA Int’l, such that the court could interpret the statute anew, by reference to its language and the canons of statutory interpretation.  Slip Op. at 17-18.

The court parsed the statute, found it ambiguous on its face,*** and then relied on the legislative history and context to reach the conclusion that equipment that automatically calls from setlists meets the statutory definition of ATDS.  The relevant holdings are at pages 21-24:

  • “Although Congress focused on regulating the use of equipment that dialed blocks of sequential or randomly generated numbers—a common technology at that time—language in the statute indicates that equipment that made automatic calls from lists of recipients was also covered by the TCPA.”  Slip Op. at 21.

  • Referring to “exemptions” from TCPA liability for calls made with consent or to collect on government backed debts as proof that such automatic calls would otherwise be subject to the statute, as made by regulated ATDS equipment: “Like the exception allowing the use of an autodialer to make calls ‘with the prior express consent of the called party,’ this debt collection exception demonstrates that equipment that dials from a list of individuals who owe a debt to the United States is still an ATDS but is exempted from the TCPA’s strictures.” Slip Op. at 22.

  • “[W]e conclude 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. Accordingly, we read § 227(a)(1) to provide that the term automatic telephone dialing system means equipment 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.”  Slip Op. at 23.

  • “We also reject Crunch’s argument that a device cannot qualify as an ATDS unless it is fully automatic, meaning that it must operate without any human intervention whatsoever. By referring to the relevant device as an ‘automatic telephone dialing system,’ Congress made clear that it was targeting equipment that could engage in automatic dialing, rather than equipment that operated without any human oversight . . . .”  Slip Op. at 23.

  • “Common sense indicates that human intervention of some sort is required before an autodialer can begin making calls, whether turning on the machine or initiating its functions. Congress was clearly aware that, at the very least, a human has to flip the switch on an ATDS.”  Slip Op. at 24.

  • “[E]vidence in the record shows that the . . . system stores numbers and dials them automatically to send text messages to a stored list of phone numbers as part of scheduled campaigns. This is sufficient to survive summary judgment.”  Slip Op. at 25.

We anticipate that the defendant will seek certiorari, particularly in light of the split of authority among the circuits.  See Slip Op. at 23, note 8: “we decline to follow the Third Circuit’s unreasoned assumption that a device must be able to generate random or sequential numbers in order to qualify as an ATDS. Dominguez ex rel. Himself v. Yahoo, Inc., 894 F.3d 116, 120 (3d Cir. 2018) (stating, without explanation, that the plaintiff’s claims against Yahoo failed because he ‘cannot point to any evidence that creates a genuine dispute of fact as to whether [Yahoo’s device] had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers’).”

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***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.” 47 U.S.C. § 227(a)(1).

 

For further information, contact Rebecca S. Saelao at rss@severson.com