Ninth Circuit Weighs In on the TCPA Following ACA International

On September 20, 2018, the Ninth Circuit weighed in on the definition of an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. See Marks v. Crunch San Diego, LLC, Case No. 14-56834 (Sept. 20, 2018). The opinion, written by Judge Ikuta, comes after the D.C. Court of Appeals’ much-discussed ruling in ACA International et al. v. Federal Communications Commission, No. 15-1211 (Mar. 16, 2018), which appeared to pare back significantly the scope of activity that may be subject to the TCPA.  (See https://classdismissed.mofo.com/tcpa/an-autodialer-aint-what-it-used-to-be-d-c-circuit-rejects-fccs-broad-ruling-on-the-tcpas-scope/.)  In its opinion, the Ninth Circuit found that, contrary to the lower court’s decision, an ATDS includes systems that have the capacity to dial stored numbers automatically, as opposed to just those systems that can generate numbers sequentially or randomly. The Ninth Circuit also rejected Crunch San Diego, LLC’s (Crunch) argument that its system could not qualify as an ATDS because human intervention was required to create the list of numbers and set up the automatic dialing process.

Defendant Crunch utilized Textmunication, a third-party web-based platform, to send promotional text messages to a list of stored telephone numbers, including to members and prospective customers. The TCPA plaintiff, Jordan Marks, alleged that three text messages he received from Crunch violated the TCPA.  The district court granted Crunch’s motion for summary judgment, finding that Textmunication was not an ATDS because it did not have the present capacity to store or produce numbers to be called using a random or sequential number generator, and to call those numbers.

Plaintiff appealed. The Ninth Circuit vacated the district court’s ruling and remanded for further proceedings.

The Ninth Circuit first determined that the Federal Communications Commission’s (FCC) prior definition of an ATDS in the FCC’s 2015 order was no longer binding on the Ninth Circuit in light of the D.C. Circuit’s decision in ACA International.  Because the D.C. Circuit had vacated the FCC’s interpretation of what qualified as an ATDS, the Ninth Circuit “beg[an] anew to consider the definition of ATDS under the TCPA.” Based on its own independent statutory interpretation, the Ninth Circuit found that an ATDS is not limited to devices with the capacity to call numbers produced by a “random or sequential number generator.”  Instead, the Ninth Circuit said, “language in the statute indicates that equipment that made automatic calls from lists of recipients was also covered by the TCPA.”  In so holding, the Ninth Circuit declined to follow the Third Circuit’s finding to the contrary in Dominguez ex. rel. Himself v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018).

The Court also rejected defendant’s argument that a device qualifies as an ATDS only if it can operate without any human intervention whatsoever at any point.  According to the Ninth Circuit, because Textmunication dialed numbers automatically, it qualified as an ATDS, “even though humans, rather than machines, are needed to add phone numbers.” The court declined to reach the question of whether a device needs to have the current or potential capacity to perform the required functions.

The Ninth Circuit’s decision in Marks arguably expands the definition of an autodialer. While many courts have focused on whether a system uses a random or sequential number generator, the Ninth Circuit found that an ATDS also includes systems that automatically dial from a stored list of numbers.  The Ninth Circuit’s decision also suggests that human intervention may not be dispositive in determining whether a system falls within the definition of an ATDS.  Courts are likely to see an increase in TCPA litigation as courts around the country attempt to grapple with the uncertainty surrounding the definition of an ATDS.