Two District Courts (Ga. and Ill.) Deny TCPA Stay Based on Primary Jurisdiction

In Holcombe v. Credit Protection Ass’n, LP, — F.Supp.2d —-, 2014 WL 4252277 (M.D.Ga. 2014), Judge Royal refused to stay a TCPA case based on the primary jurisdiction of the FCC.

Here, Defendant admits in its Answer that it uses a predictive dialer but alleges that the equipment lacks the “present capacity” to store or produce random or sequential numbers. Defendant argues none of the prior FCC rulings have addressed the precise issue of whether the term “capacity” as used in the TCPA requires a “present ability” to generate random or sequential numbers. While the Court acknowledges that the FCC has not addressed the specific issue of what constitutes “capacity,” the 2003 and 2007 FCC rulings and general rules of statutory interpretation ably guide the Court in deciding this issue. In fact, at least one district court in this Circuit has undertaken the task of determining what the term “capacity” means within the TCPA.In any event, because discovery is ongoing, the intricacies of Defendant’s dialing equipment are not yet known to the respective parties or the Court. As such, whether Defendant’s dialing equipment has the capacity to generate random or sequential numbers and whether the parties even dispute the meaning of the term “capacity” are issues better left for the summary judgment stage.  Moreover, Plaintiff alleges that Defendant violated the TCPA in two distinct ways, by placing a call using (1) an ATDS or (2) using an artificial or pre-recorded voice. “From the plain text of the statute, each of these violations is independently actionable; a plaintiff may recover damages for calls made ‘using any automatic telephone dialing system or an artificial or prerecorded voice.’ “ FN22 The petitions currently pending before the FCC have no bearing on the viability of the second claim.FN23 Therefore, the Court declines to stay these proceedings based on the second issue presented. Based on the forgoing, it is clear the two issues presented are not matters of first impression for this Circuit or the FCC, nor are they so technical that this Court would be unable to decide the factual issues based on its own experience and guidance from prior FCC rulings. Moreover, given the uncertainty as to when the FCC will issue rulings and whether the FCC will change its prior positions on these issues, the Court finds that a stay will add unnecessary delay and expense to the parties in the present litigation. Accordingly, the Court declines to invoke the doctrine of primary jurisdiction to stay this case, and Defendant’s Motion [Doc. 14] is DENIED.

In Espejo v. Santander Consumer USA, Inc., 2014 WL 4347185 (N.D.Ill. 2014), Judge Kocoras refused to stay a case that had been pending for 3-years already:

Santander argues that this case should be stayed due to the FCC’s consideration of two issues, which depending on the FCC’s determination, would be dispositive of the case at bar. The issues posed by numerous petitions before the FCC seek clarification on telephone equipment: (a) that lacks the current capacity to store, produce and dial telephone numbers randomly or sequentially; and (b) that requires human intervention to function. In advocating for a stay, Santander contends that the TCPA’s current definition of an ATDS is ambiguous and the lack of specificity needs to be resolved by the FCC. The TCPA defines an 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). Santander submits that the resolution of whether an ATDS must have the present or potential capacity to store or produce numbers would alleviate the need for the parties to delve into extensive discovery.  The FCC is currently considering multiple petitions for declaratory rulings that seek guidance on the capacity of the phone system and the level of human intervention required to be deemed an ATDS. First, In the Matter of Communication Innovators, CG Docket No. 02–278 (June 7, 2012), a petition seeking a declaration that telephone dialing systems that lack “the current ability to generate and dial random or sequential numbers, are not automatic telephone dialing systems under the TCPA.” Additionally, In re YouMail Inc. Petition for Expedited Declaratory Ruling and Clarification, CG Docket No. 02–278 (April 19, 2013), a declaration is sought deeming software that does not have the current capacity to store, produce, or dial random or sequential numbers, being outside the scope of the definition of an ATDS. Finally, In re Professional Association for Customer Engagement Petition for Expedited Declaratory Ruling, CG Docket 02–278 (October 18, 2013), seeks to clarify the term capacity in relation to the dialing systems capabilities when the call is made. Also a declaration is sought stating that a calling system is not an ATDS unless it has the capacity to dial numbers without human intervention. All petitions have been taken under advisement by the FCC and there has not been a definitive date for any ruling. Espejo opposes the imposition of a stay to await a final FCC determination. Espejo contends that previous FCC rulings and courts throughout the country have already determined the human intervention and capacity issues which renders a stay of the present case futile. Additionally, the imposition of a stay would further delay the present case for an undetermined period of time after years of protracted arbitration and settlement negotiations, which were not fruitful. Espejo contends that Santander has offered evidence showing that human intervention was merely utilized in dialing initiation but has failed to provide any evidence of human intervention in the actual dialing process. According to Espejo, the concept of human intervention necessary to defeat the application of the TCPA is missing here. See Griffith v. Consumer Portfolio Serv., Inc., 838 F.Supp.2d 723, 727 n. 2 (N.D. Ill. 2011) (noting that calls were made without human intervention where “[defendant’s individual] collectors [did] not dial the numbers, the dialer [did].”). Santander counters Espejo’s assertion by offering the declaration of Wayne Nightingale, the Vice President of Operating Systems for Santander, which states, “[w]ithout a live employee pressing a button to initiate a call, no call could be made.” Faced with contradictory levels of human intervention regarding Santander’s dialing system, it remains for the Court to decide the disputed question of human intervention. Additionally, Espejo argues that the issue concerning the capacity of the phone dialing systems to dial numbers has been sufficiently established to classify Santander’s equipment as an ATDS. Espejo supports its argument by relying on the FCC’s declaration In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02–278, 18 FCC Rcd. 14014, 14092 (2003) (2003 Order). In the 2003 Order, the FCC held that an ATDS includes “any equipment that has the specified capacity to generate numbers and dial them without human intervention….” Admittedly, the 2003 Order presents some vagueness concerning the present or potential capacity of the dialing equipment, and courts from around the country have weighed in on the issue of capacity, with varying results. Compare Hunt v. 21st Mortgage Corp., 2012 CV 2697, 2013 WL 5230061, at *4 (N.D. Ala. Sept. 17, 2013) (to meet the ATDS definition, “a system must have the present capacity, at the time the calls were made, to store or produce and call numbers from a number generator”); Gragg v. Orange Cab Co., 12 CV 576, 2014 WL 494862, at *2 (W.D. Wash. Feb. 7, 2014) (finding that “present, not potential, capacity to store, produce, or call randomly or sequentially generated telephone numbers” is the applicable standard) with Sterk v. Path, Inc., 13 CV 2330, 2014 WL 2443785 (N.D. Ill. May 30, 2014) (broadly construing the statutory language to include any dialer with the potential to dial numbers without human intervention). The extent of disagreement in interpreting the capacity requirement does not currently represent a dispositive issue which requires the FCC’s interpretation. At this stage of the case, Espejo has pled in his complaint that Santander made calls with “equipment that had the capacity to store or produce telephone numbers to be called using a random or sequential number generator and dial such numbers.” Espejo relies on the present capacity of the equipment used, not any future capacity. In opposition to Espejo’s complaint Santander asserts that at the time of the calls, its dialing system lacked the current capacity to store, produce or dial telephone numbers using a random or sequential generator. The disputed issues are matters traditionally decided by courts, whether factual, legal, or mixed matters.  This case has languished through numerous arbitrations and prospective settlement negotiations without a glimmer of finality. As we have surpassed the three-year mark in this case, it would be unduly burdensome to stay the proceedings for an undetermined period of time to await the FCC’s determinations without any idea about when a decision will be rendered. At this stage of the case, it is not clear that any pronouncement by the FCC will materially aid in the resolution of the issues in this case.