Manatt’s Continuing Coverage on Significant Post-ACA International Developments

TCPA Connect

After a year marked with confusion surrounding the definition of what constitutes an automatic telephone dialing system (ATDS), courts remain split. While the flood of Telephone Consumer Protection Act (TCPA) litigation concerning this issue has slowed in recent months, courts continue to interpret the ACA International (ACA) decision from the D.C. Circuit in various ways. ACA struck down the Federal Communication Commission’s (FCC) 2015 ATDS guidance and the FCC has still declined to issue further guidance to clear up the debate. However, since the seemingly never-ending streak of litigation concerning whether ACA left prior FCC guidance intact and, as a result, whether systems constitute ATDSs has slowed considerably, perhaps the FCC will take the opportunity to comment.

In a post-ACA world, federal district judges have issued opinions interpreting ACA, with district courts in the Ninth Circuit consistently following the plaintiff-friendly decision Marks v. Crunch San Diego, and others either following Marks or, to a greater extent, the Second Circuit’s opinion in King v. Time Warner Cable and/or the Third Circuit’s opinion in Dominguez v. Yahoo, both of which arguably favor defendants. The Second, Third and Ninth Circuits remain the only significant appellate decisions on ACA, with the Ninth Circuit weighing in again in the recent Duguid v. Facebook case, which reaffirmed Marks.

Since our last update, we have observed no significant shift on how the district courts are interpreting ACA, except that the number of cases has considerably slowed over the past few months—i.e., still a little over half of the district court cases we have reported on have found that there was an ATDS when applying ACA (though there has been a slight uptick in this regard in favor of plaintiffs surviving dismissal); a little over a third have held that ACA invalidated all prior FCC orders defining an ATDS; and about one-fifth have found that human intervention was a deciding factor as opposed to just the 2015 order discussed in ACA. Further, courts continue to acknowledge plaintiffs’ disadvantage without factual development and discovery to determine whether an ATDS is being used to call them.

There have also been no new appellate decisions since our last update, and only four new district-level opinions: one from the Third Circuit, one from the Fifth Circuit, one from the Sixth Circuit and one from the Tenth Circuit. Notably, the Seventh Circuit, despite a large volume of cases interpreting ACA at the district court level, and other circuit courts of appeal have still refrained from weighing in so far.

As part of our continuing coverage in this area, Manatt’s TCPA team monitors and reports on significant developments at the FCC and on noteworthy (i.e., dispositive or class certification-related) federal district- and appellate-level decisions interpreting, applying or otherwise evaluating ACA in ways that may impact our readers. To read all our previous articles on post-ACA International developments, please click here.

Hill v. USAA Sav. Bank, No. CIV-18-803-SLP, 2019 WL 3082471 (W.D. Okla. July 15, 2019). United States District Judge Palk from the Western District of Oklahoma denied defendant’s motion to dismiss claims brought under the TCPA regarding the use of an ATDS to call plaintiff. Citing the Ninth Circuit’s opinion in Duguid, Judge Palk stated that post-ACA courts interpret the TCPA to define an ATDS as a device with the present capacity to generate telephone numbers randomly or sequentially and to call those numbers. However, the statute does not require the defendant to have deployed the device’s capacity, just that the device has such capacity. Despite acknowledging that bare allegations of the use of an ATDS are insufficient, the court found that plaintiff’s allegations allowed the court to reasonably infer that the calls were made using an ATDS.

To read the full decision in Hill v. USAA Sav. Bank, click here.

Adams v. Safe Home Sec. Inc., No. 3:18-CV-03098-M, 2019 WL 3428776 (N.D. Tex. July 30, 2019).

In the first decision from a Fifth Circuit district court that Manatt is reporting, Chief Judge Lynn of the Northern District of Texas denied defendant’s motion to dismiss TCPA claims alleging that defendant used an ATDS. Interpreting ACA as having invalidated all prior FCC orders, the court held that an ATDS is equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers, so merely storing any numbers is insufficient. Nevertheless, the court held that plaintiff adequately pled the use of an ATDS by alleging that the received calls began with a several-seconds-long pause. Defendant argued that the alleged calls were targeted debt-collection calls and thus were not susceptible to being created by a random number generator. The court disagreed and determined that the current capacity of a system to store or produce randomly generated numbers is what qualifies it as an ATDS, not whether that function was actually used to place the calls.

To read the full decision in Adams v. Safe Home Sec. Inc., click here.

Smith v. Navient Sols., LLC, No. CV 3:17-191, 2019 WL 3574248 (W.D. Pa. Aug. 6, 2019). Following the Third Circuit’s opinion in Dominguez v. Yahoo, District Judge Gibson of the Western District of Pennsylvania granted defendant’s motion for summary judgment, finding that there was no genuine dispute of material fact that defendant complied with the TCPA. Specifically, the Interactive Intelligence (ININ) system that defendant used to call plaintiff was not an ATDS because it did not have the capability to randomly generate numbers to comprise a ten-digit telephone number and then dial that number or to generate a sequential list of numbers for dialing. Despite being a predictive dialer, which is a device that automatically calls telephone numbers from a preprogrammed list or separate computer database where telephone numbers are stored, the ININ system did not constitute an ATDS under either the TCPA or the Third Circuit’s guidance in Dominguez. The court looked to the device’s present capabilities and clarified that while a predictive dialer may constitute an ATDS if it has the capacity to randomly or sequentially generate numbers to be called, it is not always an ATDS if it merely calls numbers from a list that is separately created and uploaded to the device.

To read the full decision in Smith v. Navient Sols., LLC, click here.

Allan v. Pennsylvania Higher Educ. Assistance Agency, No. 2:14-CV-54, 2019 WL 3890214 (W.D. Mich. Aug. 19, 2019). United States District Judge Quist granted plaintiff’s motion for summary judgment finding that there was no question that defendant’s Avaya system, which stores telephone numbers to be called and automatically dials those numbers, constituted an ATDS. Following the Ninth Circuit’s opinion in Marks, the court found that the Avaya system met the statutory definition of an ATDS as it was equipment that had the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and could dial such numbers.

To read the full decision in Allan v. Pennsylvania Higher Educ. Assistance Agency, click here.

A Numerical Overview of Post-ACA International Cases

At the time of publication of this edition of TCPA Connect, the overall landscape of post-ACA case law breaks down as follows (changes reflected in bold):

Case Law by FCC Order Validity

  • 14 cases say all FCC orders invalidated
  • 32 cases say only some/part of FCC orders invalidated

Case Law by Circuit

  • 1 case from the First Circuit district courts
  • 18 cases from the Second Circuit district courts and 1 from the Second Circuit
  • 8 cases from the Third Circuit district courts and 1 from the Third Circuit
  • 1 case from the Fourth Circuit district courts
  • 1 case from the Fifth Circuit district courts
  • 6 cases from the Sixth Circuit district courts
  • 11 cases from the Seventh Circuit district courts
  • 2 cases from the Eighth Circuit district courts
  • 11 cases from the Ninth Circuit district courts and 2 from the Ninth Circuit
  • 3 cases from the Tenth Circuit district courts
  • 11 cases from the Eleventh Circuit district courts

Case Law by Appellate Level

  • 4 appellate-level cases (Second, Third, Ninth Circuits)

Case Law by Autodialer Decision

  • 34 cases where autodialer found
  • 26 cases where autodialer not found
  • 11 cases where human intervention was a deciding factor in determining that system was not an ATDS
To read all our previous articles on post-ACA International developments, please see here.