Over the last few weeks we have written numerous articles assessing Telephone Consumer Protection Act (“TCPA”) cases addressing the scope of the statute’s definition of automated telephone dialing systems (“ATDs”) as the decisions have been handed down. With July 4th week being a bit light on TCPA developments, we decided to pause and provide some further insight on the shifting TCPA landscape and especially the ongoing battle over the scope of the ATDS definition.

The current roster of pertinent post-ACA Int’l TCPA cases addressing the ATDS issue are as follows (in order of decision):

1. Marshall v. CBE Group, Inc., Case No. 2:16-cv-02046-GMN, 2018 WL 1567852 (D. Nv. March 30, 2018)(FCC’s rulings holding that predictive dialers are an ATDS are no longer binding following ACA Int’l);

2. Reyes v. BCA Fin. Servs., Inc,. No.: 1:16-cv-24077-JG, 2018 U.S. Dist. LEXIS 80690 (S.D. Fla. May 14, 2018)(ACA Int’l did not expressly overruled FCC’s predictive dialer rulings so they remain binding);

3. Herrick v. GoDaddy.com LLC, No. CV-16-00254-PHX-DJH, 2018 WL 2229131 (D. Ariz. May 14, 2018)(FCC’s rulings holding that predictive dialers are an ATDS are no longer binding following ACA Int’l);

4. Swaney v. Regions Bank, No.: 2:13-cv-00544-JHE, 2015 U.S. Dist. LEXIS 184751 (N.D. Ala. May 22, 2018)(2003 FCC predictive dialer ruling remains binding);

5. Maddox v. CBE Grp., Inc., No.: 1:17-cv-1909-SCJ, 2018 WL 2327037 (N.D. Ga. May 22, 2018)(“human intervention” test from FCC’s 2003 predictive dialer rulings survived ACA Int’l);

6.  McMillion v. Rash Curtis & Associates, No.: 16-cv-03396-YGR, 2018 U.S. Dist. LEXIS 101700 (N.D. CA, June 18, 2018)(ACA Int’l did not disturb prior Ninth Circuit rulings on predictive dialers);

7. Sessions v. Barclays Bank Delaware, Civ. Action No. 1:17-CV-01600-LMM, 2018 WL 3134439 (N.D. GA June 25, 2018)(ACA Int’l overruled FCC’s predictive dialer rulings);

8. Dominguez v. Yahoo, Inc., 2018 U.S. App. LEXIS 17350  (3rd Cir. June 26, 2018);(systems that lack the present capacity to dial randomly or sequentially do not qualify as an ATDS under the TCPA);

9. Case That Will Not Be Named, NO. 3:17–cv–00505, 2018 WL 3134619 (M.D. Tenn. June 27, 2018)(Predictive dialer rulings survived ACA Int’l);

10. King v. Time Warner Cable, Case No. 15-2474-c, 2018 U.S. App. LEXIS 17880 (2nd Cir. June 29, 2018); and

11. O’Shea v. Am. Solar Sol., No. 3:14-cv-00894-L-RBB, 2018 U.S. Dist. LEXIS 110402 (S.D. Cal. July 2, 2018)(following Swaney and holding that FCC’s predictive dialer rulings survived ACA Int’l).

Looking at the numbers the score on the predictive dialer issue is as follows:

• 4 district court cases holding that the predictive dialer rulings survived ACA Int’l (Reyes, Swaney, CTWNBN, and O’Shea); 

• 3 district court cases hold that ACA Int’l overruled the FCC’s earlier predictive dialer rulings (Marshall, Herrick and Sessions);

•  1 holds that ACA Int’l did not disturb the existing precedent of the Ninth Circuit at all (McMillion); and

• 1 holds that the “human intervention” test of the 2003 predictive dialer ruling survived ACA Int’l (Maddox).

What a mess.

Although the predictive-dialer-rulings-survived camp holds a slight numerical advantage, as shown below, all of the better-reasoned decisions support the “clean slate” approach.  But we’ll untangle this in a moment.

First, let’s recognize that –mercifully– the two post-ACA Int’l Circuit Court of Appeal decisions are in complete harmony, although Dominguez goes further than King in one important respect. Here’s the (much needed) harmony– both King and Dominguez agree that only the present “capacity” to perform the functions of an ATDS are relevant in assessing whether or not equipment qualifies under the TCPA. That is a big win for callers who had long struggled under the FCC’ 2015 TCPA Omnibus formulation that converted any software-enabled dialing device into an ATDS. While the win in ACA Int’l obliterated the “potential” capacity formulation adopted by the FCC, it did not necessarily follow that the courts would adopt a “present” capacity approach after the Omnibus crumbled. With Dominguez and King both independently analyzing the issue and reaching the same conclusion, however, it is a good bet that the TCPA’s “present” capacity bed is now made and is unlikely to be disturbed when the FCC addresses the issue following its Public Notice seeking comment on the scope of the statute.

King and Dominguez are consistent on a second point of import as well–both Circuit Court of Appeal decisions agree that ACA Int’l is binding across the country as to the viability of the FCC’s previous ATDS pronouncements. (As we shall see, most–but not all–district court decisions are in accord).

Nonetheless, the issue of what functionalities equipment must perform to qualify as an ATDS remains the subject of hot debate. While Dominguez holds directly that equipment must randomly and sequentially generate numbers and dial them to qualify as an ATDS–that’s what the statute says, after all–King refuses to address the issue and expressly reserves it for the district court to decide on remand. And, importantly, neither King nor Dominguez involve predictive dialers so TCPAland still lacks a Circuit Court of Appeals decision on that issue.

The debate over what functions an ATDS must be able to perform must rank as among the least likely debates in legal history. This is so because Congress actually specifically articulated those functions with a degree of precision that is rarely found in federal statutes: “to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” See 47 U.S.C. Sec. 227(a)(1). So even the very earliest TCPA decisions–all from state courts for that matter–had little problem reading the statute to mean just what it says–if the device does not use a random or sequential number generator it is not an ATDS. And that, of course, is the very result Dominguez just reached as well.

So why the hot-tempered debate today? Its no mystery really. The FCC took it upon itself to expand the statute beginning in 2003 and again in 2008 and ultimately in 2015 in response to complaints about “robocalls” from consumers that it could not address through any other vehicle but the TCPA. The 2003 and 2008 orders held that predictive dialers are subject to the statute because they can dial a bunch of numbers at a time without human intervention–overlooking that the statute requires random or sequential number generation.

The D.C. Circuit Court of Appeal did not overlook that fact, however, and in ACA Int’l criticized the FCC for issuing the 2003 and 2008 orders in vague reliance on new functionalities–calling a lot without human intervention–although both the statute and the FCC’s own 2015 TCPA Omnibus ruling require random or sequential number generation to pass muster as an ATDS. So ACA Int’l specifically set aside the 2015 TCPA Omnibus ruling as inconsistent with previous orders (and itself). But the question remains–were the 2003 and 2008 predictive dialer rulings also set aside?

The first Court to address the issue–Marshall v. CBE Group, Inc., Case No. 2:16-cv-02046-GMN, 2018 WL 1567852 (D. Nv. March 30, 2018)–said “yes.” And why not? The D.C. Circuit Court of Appeal specifically held that it was empowered to review the 2003 and 2008 Orders, after all, and went on to find that those orders were inconsistent with the functionalities required by the statute and the Omnibus. ACA, Int’l at 701. So Marshall’s refusal to apply those predictive dialer rulings in favor of the Plaintiff in that case was hardly surprising.

But we all knew the other shoe was going to drop and drop it did. In Reyes v. BCA Fin. Servs., Inc,. No.: 1:16-cv-24077-JG, 2018 U.S. Dist. LEXIS 80690 (S.D. Fla. May 14, 2018)  the Court correctly observed that ACA Int’l preserves the FCC’s ability, on remand, to adopt anew a broad definition of “ATDS” that includes predictive dialers. The Reyes court then leaps to the conclusion that since the FCC is currently empowered to re-adopt those earlier predictive dialer rulings, the earlier orders must still be in effect. But that seems a classic non sequitur.  Sure, the FCC may properly adopt the findings underlying its predictive dialer rulings a second time—and this time in a manner that does not contradict other orders—but until it does there is simply no binding FCC pronouncement on predictive dialers out there.

Herrick v. GoDaddy.com LLC, No. CV-16-00254-PHX-DJH, 2018 WL 2229131 (D. Ariz. May 14, 2018)–rather famously decided on the same day as Reyes— and draws upon the same conclusions made in Marshall. It holds that the FCC’s predictive dialer rulings are “defunct” following ACA Int’l and refuses to apply the rulings or any cases relying on them to the dispute before it.

Following Herrick was Swaney v. Regions Bank, No.: 2:13-cv-00544-JHE, 2015 U.S. Dist. LEXIS 184751 (N.D. Ala. May 22, 2018), which seesawed back the other direction. Swaney reaches the curious conclusion—without supporting analysis— that ACA Int’l overruled only part of the FCC’s 2015 TCPA Omnibus ruling respecting ATDS usage, but not all of it.  The Swaney court seems moved by the ACA Int’l panel’s citation to the 2003 FCC Order for the proposition that not all predictive dialers dial randomly or sequentially—see Swaney at *2— but the D.C. Circuit Court of Appeal’s citation in that respect merely sets up a record conflict between the FCC’s findings in that earlier order with the functionalities listed in the Omnibus ruling. Far from citing the 2003 FCC Order with approval, therefore, the portion of ACA Int’l referenced in Swaney was merely noting an inconsistency in the FCC’s various orders. Unfortunately the analysis in Swaney is very lean so this portion of the Court’s ruling is somewhat mysterious.

Maddox v. CBE Grp., Inc., No.: 1:17-cv-1909-SCJ, 2018 WL 2327037 (N.D. Ga. May 22, 2018)–decided the same day as Swaney–is even more mysterious.  In Maddox the Court used the FCC’s 2003 predictive dialer as a sword and—without passing on the functionalities required of an ATDS—determined (without any real analysis) that the FCC’s focus on human intervention in its 2003 order remained binding after ACA Int’l . Maddox, therefore, does not address the functionalities of a predictive dialer or hold that such dialers satisfy the statutory definition of an ATDS.

At this point in the timeline, some observers began to observe that there might be a geographic bend to these decisions–courts in the Eleventh Circuit seemed content to continue applying the FCC’s earlier rulings whereas courts out west were more inclined to lean toward ruling that the D.C. Circuit Court of Appeal dispatched with those rulings. But that theory wouldn’t last very long.

On June 18, 2018 the Northern District of California torpedoed it by entering the fray with McMillion v. Rash Curtis & Associates, No.: 16-cv-03396-YGR, 2018 U.S. Dist. LEXIS 101700 (N.D. CA, June 18, 2018)–a case going a completely different direction. Unlike all other district and circuit court of appeal decisions to address the issue to date, McMillion held that ACA Int’l was simply not binding on it and that the Ninth Circuit’s previous authority applying the FCC’s predictive dialer rulings remained good law.

The best-reasoned case to date followed next–a ruling out of the Eleventh Circuit holding that the predictive dialer rulings were, in fact, overruled by ACA Int’l. In Sessions v. Barclays Bank Delaware, Civ. Action No. 1:17-CV-01600-LMM, 2018 WL 3134439 Judge May of the Northern District of Georgia rolls up her sleeves and really spends some time with the D.C. Circuit’s ruling. She concludes:

the D.C. Circuit [in ACA Int’l] clearly held that it invalidated all of the FCC’s pronouncements as to the definition of “capacity” as well as its descriptions of the statutory functions necessary to be an ATDS…[and despite the FCC’s challenge to the Circuit Court’s ability to review the earlier predictive dialer rulings] the D.C. Circuit “set aside the [FCC’s] treatment of those matters” without qualification.

That’s just pristine. The Sessions court also analyzed the binding effect of ACA Int’l and–contrary to McMillion and consistent with the conclusions in Dominguez and King–concludes that ACA Int’l was binding upon it. The Court, nonetheless, stopped short of dismissing the ATDS allegations before it, exercising laudable judicial restraint on the issue.

The last case we can address here is O’Shea–remember, we can’t discuss one of these cases. Although O’Shea followed Swaney–again with very limited analyses–the procedural posture needs to be noted. O’Shea was decided on an ex parte by a defendant for leave to file a further summary judgment motion in a case that has already been through one set of motions and cross-motions for summary judgment and certification briefing. Not surprisingly, perhaps, the defendant’s belated attempt–on an ex parte basis–to re-address the ATDS issues fell upon deafer-than-average ears. The analysis in O’Shea is lean and limited and Sessions is not mentioned.

Bringing it all together, outside of the predictive dialer context it is clear that only present “capacity” matters and the required functionalities of an ATDS are likely those embedded in the statute per Dominguez. The debate over predictive dialers continues, but the best-reasoned decisions all appears to line up behind the conclusion that ACA Int’l set aside the FCC’s earlier predictive dialer rulings. The district court decisions reaching the contrary result seem to turn on one of three flawed premises: i) that the ACA Int’l ruling stated that it would bless a future predictive dialer ruling (which says nothing on the issue of whether past predictive dialer rulings remain binding); ii) that ACA Int’l cited the 2003 ruling for the proposition that not all predictive dialers operate using a random or sequential number generator (which is not, in and of itself, a basis to conclude that the D.C. Circuit intended to maintain that ruling after determining that it was inconsistent with the Omnibus); and/or iii) that ACA Int’l is not binding on district courts in other circuits (which both Circuit Court of Appeals addressing the issue disagree with). And TCPAland still awaits a Circuit Court of Appeal decision on the predictive dialer issue–or better yet, a primary jurisdiction stay ruling–to provide further desperately-needed clarity.