As the battle over the definition of an ATDS continues throughout the nation, a District Court in Virginia just entered the fight with a dagger.

In Morgan v. On Deck Capital, Case No. 3:17-CV-00045, 2019 U.S. Dist. LEXIS 147757 (W.D. Va. Aug. 29, 2019), the court denied Defendant’s motion for summary judgment and held that although Plaintiff received a call that was manually dialed, the call may still violate the TCPA because it occurred on a device with the capacity to dial numbers automatically.

To provide some background, Defendant On Deck Capital is an online lender that calls individuals who it believes to be interested in small business loans. Plaintiff, a small business owner, received a call from Defendant after expressing interest in obtaining a loan. Based on this one call, Plaintiff filed a putative TCPA class action against Defendant alleging that the call was made via an ATDS. As the court noted, there was no dispute that the call at issue was initiated using the "Manual Touch Mode" dialing domain on a telephone system designed by a company called "Five9."

Defendant thus moved for summary judgment arguing that the "Manual Touch Mode" domain used to call Plaintiff did not qualify as an ATDS under the TCPA. Plaintiff, on the other hand, argued that the “Manual Touch Mode” domain is just one aspect of a larger system capable of automatic dialing and thus qualified as an ATDS.

In determining whether Five9’s Manual Touch Mode domain qualified as an ATDS, the court began its analysis by apply the statutory definition of ATDS. Specifically, the court held that in order to qualify as an ATDS, the system must have the capacity to store and produce telephone numbers to be called using a random or sequential number generator. Additionally, it found that an ATDS must have the ability to "dial numbers without human intervention."

The court recognized that the "Manual Touch Mode” dialer did not randomly or sequentially generate numbers. In this mode, the database that stores telephone numbers automatically populates an agent's next phone number. The agent must then manually key in the populated number, and the call will not be initiated unless the phone number is correctly input by the agent and the agent clicks "Dial." The court also acknowledged that the call at issue came from Defendant’s sales department, and the sales department only had access to the “Manual Touch Mode” and the “Preview Mode” – both of which require human intervention to dial numbers. It would thus appear that this case was a clear win for Defendant. However, the court did not stop there.

The court noted that two of Defendant’s other departments use Five9’s Virtual Contact Center ("VCC") domain, which includes dialing modes such as “Power Mode,” “Progressive Mode,” and “Predictive Mode” that do have the capacity to store and produce numbers using a random or sequential number generator and then automatically dial such numbers – which the court concluded “almost certainly would qualify as ATDSs.”

Therefore, the issue before the court became whether the Manual Touch Mode domain is its own "system" or, alternatively, simply one domain in a larger system that includes other modes that do qualify as ATDSs.

Defendant introduced evidence that the VCC and Manual Touch Mode telephones use separate hardware, separate software, a separate server, separate settings, and are administered separately, and therefore constitute separate systems. Defendant also demonstrated that members of the sales department that placed the call to Plaintiff were in the New York office, in their own separate workspace, and were not able to log into domains other than the Manual Touch Mode domain.

In response, Plaintiff presented evidence that the Manual Touch Mode is a software function within Defendant’s overall dialing system, and that this overall system includes other modes which have the capacity for automatic dialing. Further, Plaintiff provided that every agent received nearly identical computers which contained the Five9 dialer software and "[m]ultiple domains can be accessed from the same physical workstation" so long as the used as the appropriate login information.

Ultimately, the court held that although the call at issue was a manual call initiated using the "Manual Touch Mode" domain, it is simply one domain in a larger system that includes other modes that do qualify as ATDSs. Therefore, Defendant’s motion for summary judgment on the issue of ATDS use was denied.

At bottom, Morgan v. On Deck Capital can have significant consequences for businesses. Essentially, any call completed on a manual dialing mode may still violate the TCPA if it occurred on a system that includes other modes that have the capacity for automatic dialing. What a TCPA disaster!