Significant Plaintiff Friendly Ninth Circuit TCPA Ruling

Earlier this, year in the matter of ACA International v. FCC, the D.C. Circuit vacated the Federal Communications Commission’s broad definition of “automatic telephone dialing system.” However, the manner in which an ATDS is defined has continued to garner inconsistent analyses. Earlier this month, the Ninth Circuit U.S. Court of Appeals issues its much anticipated opinion in the matter of Marks v. Crunch San Diego, LLC.

In short, Marks involved the alleged receipt of unsolicited text messages purportedly sent via an ATDS. Crunch sought to have the matter dismiss, arguing that the third-party platform it utilized was not an ATDS. The platform dialed telephone numbers that were inputted by various measures, including, manually. Messages were allegedly sent automatically when Crunch manually selected the numbers to be called and a corresponding send date.

According to Crunch, the technology did not meet the definition of an ATDS because it did not have the capacity to store and call numbers using a random or sequential number generator. The lower court agreed and dismissed the case. On appeal, the Ninth Circuit disagreed.

On appeal, the plaintiff argued that the definition of an ATDS should include technology with the capacity to store telephone numbers and then dial them. Conversely, Crunch argued that an ATDS must necessarily store telephone numbers that have been produced using a random or sequential number generator.

The Ninth Circuit was not persuaded by Crunch’s argument. It held that the statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator. It further held that, as a result of the ACA decision, only the statutory definition of ATDS is pertinent.

The definition remains ambiguous.

The court opined, “Despite the ambiguity of the statutory definition of ATDS, reading the definition in its context and with a view to its place in the overall statutory scheme, we conclude that the statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a random or sequential number generator, but also includes devices with the capacity to dial stored numbers automatically.”

Human intervention, therefore, is not dispositive. Therefore, technology can still be deemed an ATDS despite it not being “fully automatic, meaning that it [does not have to] operate without any human intervention whatsoever.” “Common sense indicates that human intervention of some sort is required before an autodialer can begin making calls, whether turning on the machine or initiating its functions,” the court stated.

Here, the technology used by Crunch was found to have “the automatic dialing function necessary to qualify as an ATDS, even though humans, rather than machines, are needed to add phone numbers to the … platform.”

Thus far, the Second Circuit, Third Circuit and Ninth Circuit have weighed-in on the ATDS-definition issue.

Richard B. Newman is an FTC compliance lawyer. He provides advertising compliance and regulatory defense services, with a focus on advertising substantiation proceedings and investigations conducted by the FTC and state attorneys general. Follow him on Linkedin.

Informational purposes only. Not legal advice. Always seek the advice of an attorney. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

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