In Espejo v. Santander Consumer USA, Inc., 2016 WL 6037625, at *12 (N.D.Ill. 2016), Judge Kocoras found that an automobile finance company’s calls to a TCPA class action plaintiff through its Aspect dialer used an ATDS under the TCPA.
Santander’s alternative ground for summary judgment asserts, not the consent of the called parties, but the equipment it used to call them. Santander argues that its “Aspect Telephone System” does not constitute the ATDS (automatic telephone dialing system) required to trigger liability under the TCPA for two reasons: (1) it “lacked the capacity to dial numbers stored or produced by a random or sequential number generator – an express statutory requirement of an ATDS,” and (2) it “relied on customer service agents clicking buttons to dial Espejo’s and Levins’ cell phone numbers from a manually assembled list – human intervention that takes Santander’s telephone system outside the ATDS definition.” Dkt. 96, at 1. According to Santander, both features are independently “fatal to Plaintiffs’ TCPA claims.” Id. The Court disagrees. As for the “human intervention” required by Santander’s Aspect system, its own description of that system reveals that there is little to speak of. According to Santander, its “dialer operations team” “uploads” a “file” containing a “criteria-generated list” of telephone numbers derived from factors “such as account behavior scores, account balances, new loan status, days past due and amounts past due.” Dkt. 96, at 5. And “when agents log-in and press buttons indicating their availability,” the Aspect system’s “dialer” “responds to these agent-initiated signals by dialing numbers from the uploaded list, using an algorithm designed to efficiently match available agents to answered calls.” Id. Thus, according to Santander’s own description, its Aspect “dialer”—not the agents—makes the calls “by dialing numbers from the uploaded list.” That “some act of human agency occurs at some point in the process” does nothing to place Santander’s automated “dialer” beyond the TCPA’s reach, since a person “will always be a but-for cause of any machine’s action.” See In re Collecto, Inc., 14-MD-02513-RGS, 2016 WL 552459, at *4 (D. Mass. Feb. 10, 2016) (emphasis in original); Johnson v. Yahoo!, Inc., No. 14 CV 2028, 2753, 2014 WL 7005102, at *5 n.10 (N.D. Ill. Dec. 11, 2014)). As the Johnson court explained, Every ATDS requires some initial act of human agency – be it turning on the machine or pressing “Go.” It does not follow, however, that every subsequent call the machine dials – or message it sends – is a product of that human intervention. There is some evidence to suggest that [defendant’s system] can pull numbers and dial them without a person ordering a specific system message….That is sufficient to defeat Yahoo!’s motion for summary judgment. Johnson, 2014 WL 7005102, at *5. So too here. Santander’s second ground for distinguishing its Aspect “dialer”—that it “lacked the capacity to dial numbers stored or produced by a random or sequential number generator”—is also insufficient. Indeed, there is no dispute that Santander’s Aspect “dialer” functions as a “predictive dialer,” which the Federal Communications Commission has ruled constitutes an ATDS for purposes of the TCPA, regardless of whether it uses “a random or sequential number generator” as recited in the TCPA. See Dkt. 96, at 12-13; Dkt. 123, at 12-15; Dkt. 136, at 13-15; Dkt. 138, ¶¶ 23-24. As a sister court recently explained: “The TCPA defines an autodialer 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). In 2003, the FCC explained that while previous autodialers generated random numbers to call, “the evolution of the teleservices industry has progressed to the point where using lists of numbers is far more cost effective.” In Re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Rcd. 14014, 14092 (2003). So a predictive dialer, which “has the capacity to store or produce numbers and dial those numbers at random, in sequential order, or from a database of numbers,” id. at 14091, “constitutes an automatic telephone dialing system and is subject to the TCPA’s restrictions on the use of autodialers,” 23 F.C.C. Rcd. at 566. In other words, an autodialer “has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists.” In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C. Rcd. 15391, 15932 n.5 (2012).” Wright v. Nationstar Mortg., LLC, No. 14 C 10457, 2016 WL 4505169, at *10 (N.D. Ill. Aug. 29, 2016) (emphasis added). Santander nevertheless asks the Court to disregard these FCC rulings, but Seventh Circuit authority squarely precludes such a departure. Even Santander concedes that the Hobbs Act requires this Court to “give weight” to these FCC rulings. Dkt. 96, at 13; see also 28 U.S.C. §§ 2341 et seq. The Seventh Circuit has reinforced this requirement, admonishing that the Hobbs Act “reserves to the courts of appeals the power ‘to enjoin, set aside, suspend (in whole or in part), or to determine the validity of’ all final FCC orders.” C.E. Design Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443, 446, 449 n.5 (7th Cir.2010) (citing 28 U.S.C. § 2342(1) and 47 U.S.C. § 402(a)). District courts within this circuit have heeded this warning in cases challenging the very FCC rulings that Santander contests here,1 including in a case against Santander itself, where the court described its argument urging rejection of this FCC interpretation as “perilously close to violating Fed. R. Civ. P. 11.” Nelson v. Santander Consumer USA, 931 F. Supp. 2d 919, 928 (W.D. Wisc. 2013). The Nelson court went on to hold that Santander’s Aspect dialer is an ATDS within the scope of the TCPA, although that decision was later vacated by stipulation of the parties. See id; 2013 WL 5377280, at *1 (W.D. Wis. June 7, 2013). Santander now resists the same holding here, pointing to a more recent appeal of various FCC rulings, including “whether a ‘predictive dialer’ still must have the requisite ‘capacity’ to use a random or sequential number generator to be considered an ATDS under the statute.” Dkt. 136, at 14 (citing ACA Int’l v. FCC, Appeal No. 15-1211 (D.C. Cir. filed July 10, 2015).
Given the both Hobbs Act and Seventh Circuit authority requiring district courts to adhere to final FCC rulings, this Court joins those in this circuit and elsewhere in holding that a predictive dialer such as Santander’s Aspect system falls within the scope of the TCPA. See, e.g., Schumacher, 2015 WL 5786139, at *6-8 (citing cases). This holding disposes of all calls discussed above, including the four calls to Levins’ 9678 in May 2012, which both sides agree were made with Santander’s Aspect dialer manually, rather than using its “predictive dialer” mode. Dkt. 124, ¶ 39; Dkt. 136, at 2, 9-10. Under the FCC’s controlling interpretation, the pivotal inquiry is whether the dialing system had the “capacity” to dial numbers automatically, regardless of whether the calls were made manually or using the system’s autodialer or predictive dialer features. See Johnson, 2014 WL 7005102, at *5-6; see also Robinson v. Green Tree Servicing, LLC, No. 13 CV 6717, 2015 WL 4038485, at *3-4 (N.D. Ill. June 26, 2015) (denying summary judgment on TCPA claim for calls allegedly made manually on Aspect predictive dialer which had the “requisite capacity to act as an ATDS” as construed by the FCC); see also 47 U.S.C. § 227(a)(1) (an ATDS “has the capacity…to dial such numbers”). That FCC interpretation is dispositive here. Anticipating this result, Santander urges the Court to stay this action until the D.C. Circuit decides the appeal in ACA Int’l. See Dkt. 96, at 13 n.3. Santander notes that a “number of federal courts recently have granted motions to stay based on the pendency of the ACA Int’l appeal.” Id. (citing cases). But Plaintiffs oppose any such stay, complaining that Santander “has not shown how a stay serves judicial economy or impacts the balance of hardships to the parties.” Dkt. 123, at 15 n.7. While some courts have taken such a wait-and-see approach, others in this district and elsewhere have come to the opposite conclusion, noting that the delay caused by a stay awaiting the D.C. Circuit’s decision “could be substantial,” and therefore opting to allow progress in the case, particularly on issues unrelated to that appeal. See, e.g., Konopca v. Ctr. For Excellence in Higher Educ., Inc., No. 15-5340, 2016 WL 4644461, at *2-3 (D.N.J. Sept. 6, 2016) (citing cases). This Court takes the latter approach and opts to resolve Plaintiff Levin’s Motion for Class Certification, which the Court denies for reasons unrelated to the ACA Int’l appeal, as explained below. The Court notes, however, that oral argument in that appeal is scheduled to take place soon, on October 19, 2016. Accordingly, in the event the parties here are unable to resolve Plaintiffs’ remaining individual claims, the Court will defer a trial on those claims until the D.C. Circuit issues its decision in ACA Int’l, and will revisit any issues affected by that decision as needed, at any time before the trial in this case.
The District Court denied Class Certification, however, on the basis that the class was a “fail-safe” class.
Nor has Levins met Rule 23(a)’s numerosity requirement. Levins attempts to meet this requirement with evidence that “almost three million individuals were called by Santander or on its behalf, on numbers not provided in the loan applications.” Dkt. 103, at 17. From this, she reasons that “it is overwhelmingly likely that thousands of individuals—and certainly more than forty—fit the proposed Class and Subclass definitions.” Id. But the volume of calls placed to numbers not listed in loan applications hardly quantifies class membership, which also asks whether the number was “otherwise volunteered” or “verified” before Santander called it, “as reflected in Santander’s records,” id. at 11—records which Plaintiffs concede cannot be used to make that determination. Nor has Levins attempted to identify any group of individuals (forty, or even less than that) who meet her class definition, further demonstrating that such a determination cannot be based on Santander’s records alone. Levins attempts to address this shortcoming by contending that “Santander has not challenged numerosity.” Id. at 18. But the concession she cites was made in the case brought by Espejo (who does not seek class certification) with respect to a different class definition which did not rely on Santander’s records. See 8987 Dkt. 30, ¶ 19; 8987 Dkt. 117, at 11. Here by contrast, Levins relies upon Santander’s records not only to define her class, but also to argue that it amounts to more than an improper “fail-safe” class, i.e., “one that is defined so that whether a person qualifies as a member depends on whether the person has a valid claim.” See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012). As Santander correctly argues, such a class definition “is improper because a class member either wins or, by virtue of losing, is defined out of the class and is therefore not bound by the judgment.” See id; see also Dkt. 119, at 15 (citing Messner). Levins argues that her proposed class is more than a mere “fail-safe” because it is “defined by objective criteria (as determined by reference to Santander’s own internal records of the calls at issue)” and “is not pegged to ultimate success on the merits of the TCPA claims alleged here.” Dkt. 139-1, at 3 n.1. But Plaintiffs’ own challenges to Santander’s records demonstrate that they provide no such “objective” criteria. Class membership would thus require a determination of consent—i.e., whether the called party’s number was “volunteered” or “verified” before Santander used it—as is liability under the TCPA, which likewise requires a call without “the prior express consent of the called party.” See 47 U.S.C. § 227(b)(1)(A). Accordingly, Levins’ proposed class fails not only because it is indefinite and she has failed to identify any group of members who fall within it, but also because disputes concerning Santander’s records, such as Plaintiffs mount here, would also require a liability determination to determine class membership, rendering it an impermissible “fail-safe” class.