Companies and practitioners throughout the Ninth Circuit are following the now-fully briefed appeal in Marks v. Crunch San Diego, LLC, No. 14-56834, with interest. In this appeal, the Ninth Circuit is considering what constitutes an Automatic Telephone Dialing System (“ATDS”) under the TCPA and could imminently issue a decision.
The appeal is from an order granting a TCPA defendant summary judgment on the basis that texts sent using human intervention did not utilize an ATDS. Marks, 55 F. Supp. 3d 1288, 1292 (S.D. Cal. 2014). In a prescient decision that pre-dates the D.C. Circuit’s recent ruling in ACA Int’l v. FCC, 885 F.3d 687, 693 (D.C. Cir. 2018), Judge Cynthia Bashant held that only present capacity to store or produce numbers to be called using a random or sequential number generator renders a system an ATDS within the statute’s plain meaning. Id. at 1291-92. If adopted by the Ninth Circuit, such a holding would be very favorable to defendants, many of whom use modern technology to dial accountholders’ telephone numbers, not random or sequentially generated numbers. After the appeal was fully briefed and argued, the Ninth Circuit ordered the parties to brief the effect of ACA Int’l on the appeal, as that decision represents an arguable sea change regarding what equipment constitutes an ATDS. The Marks parties, along with Sirius XM as amicus curiae, filed their supplemental briefs on April 20, 2018, and May 4, 2018, respectively.
Appellant Marks’s supplemental brief argues that “ACA International does nothing more than set aside the FCC’s 2015 efforts to clarify the types of calling equipment that fall within the [TCPA],” and that the D.C. Circuit’s decision necessarily leaves prior Ninth Circuit and FCC precedent intact. Appellant’s Supp. Br., Dkt. No. 71, at 1. By contrast, Sirius XM’s brief—authored by Shay Dvoretzky (who argued ACA Int’l before the D.C. Circuit)—argues that, under ACA Int’l, “a device qualifies as an ATDS regulated by the TCPA only if the device, as currently programmed, has the ability to generate and dial random or sequential telephone numbers.” Sirius XM Supp. Br., Dkt. No. 74, at 2. Second, Sirius XM argues that ACA Int’l supports interpreting the TCPA to not regulate “devices that call from lists of numbers.” Id. at 9. Third, Sirius XM argues that under ACA Int’l, “a device qualifies as an [ATDS] only if it can perform its functions without human intervention.” Id. Thus, Sirius XM contends that ACA Int’l not only vacated the FCC’s interpretation of what constitutes an ATDS, but also that it—in concert with the statute’s plain language—provides guidance as to what does not constitute an ATDS. Finally, Sirius XM argues that, under the Hobbs Act, the Ninth Circuit is bound to follow the D.C. Circuit’s decision, as only the D.C. Circuit is empowered by Congress to review the FCC’s statutory interpretation of the TCPA. Id. at 12.
Separately, Appellee Crunch San Diego LLC’s brief argues that—in the wake of ACA Int’l—the Ninth Circuit should uphold the district court’s grant of summary judgment to Crunch San Diego based on the plain meaning of the statute, as the equipment at issue “lacks the capacity to generate random or sequential phone numbers,” and is thus “not an ATDS under the statute.” Crunch San Diego Supp. Br., Dkt. No. 75, at 14. Per the Ninth Circuit panel’s comments at oral argument, Crunch San Diego LLC’s brief also grammatically parses the statute, to support the district court’s conclusion that “random or sequential number generator” must “have some limiting effect” and cannot be rendered superfluous. Id. at 8.
Parties in TCPA cases throughout the Ninth Circuit and beyond await the Ninth Circuit’s guidance on this threshold issue to TCPA liability. And, the decision cannot issue too soon. In the vacuum left by ACA Int’l, there is a significant risk that courts will reach competing interpretations of what constitutes an ATDS, subjecting plaintiffs and defendants alike to conflicting authorities in the absence of appellate or FCC guidance. Indeed, following ACA Int’l, two district courts have already reached competing conclusions regarding what equipment constitutes an ATDS under the TCPA. Compare Herrick v. GoDaddy.com LLC, 16-00254 (D. Ariz. May 14, 2018) (granting summary judgment on grounds that “GoDaddy did not use an [ATDS]”; further holding that ACA Int’l “ ‘set aside’ . . . the FCC’s interpretations of “using a random or sequential number generator,” and as a result “declin[ing] to defer to any of the FCC’s ‘prior pronouncements’ regarding the first required function of an ATDS, i.e. whether a device has the capacity to store or produce telephone numbers ‘using a random or sequential number generator.’”) (citations omitted); with Reyes v. BCA Fin. Servs., No. 16-24077, 2018 U.S. Dist. LEXIS 80690, *31-32 (S.D. Fla. May 14, 2018) (holding that though the “ACA International case has given the Court considerable pause[,] the Court finds that the prior FCC Orders are still binding. Therefore, the ACA International case does not change the Court’s conclusion on the ATDS issue.”). See our post here: (https://www.severson.com/consumer-finance/two-courts-reach-opposite-conclusions-regarding-what-constitutes-an-atds-in-the-wake-of-the-d-c-circuits-aca-intl-decision/)
The Marks appeal is before Circuit Judges Callahan, Bea, and Ikuta, all of whom were nominated by George W. Bush.
For further information or questions about the Marks appeal, contact Rebecca Saelao at firstname.lastname@example.org