Source: https://www.adamsandreese.com/news-knowledge/companies-face-increased-risk-of-tcpa-lawsuits-following-9th-circuit-ruling
Timestamp: 2019-04-24 06:53:39+00:00

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Following yesterday’s 9th Circuit ruling, companies need to be aware of its implication on the telecommunication devices used to reach customers and prospective customers and their potentially increased exposure to Telephone Consumer Protection Act (TCPA) claims.
This opinion further complicates the TCPA landscape and burdens companies’ efforts towards compliance and in the defense of litigation claims. For now, at least in the 9th Circuit, an automatic telephone dialing system (ATDS) under the TCPA now includes both equipment that has the capacity to call randomly or sequentially generated numbers and equipment that merely has the capacity to automatically dial stored numbers by the company.
Further, the human intervention exception to an ATDS has now been significantly undermined. It is imperative you speak with your counsel and your equipment vendors to determine whether your systems are impacted by this ruling. This is a time to reevaluate your policies and procedures in how you communicate with individuals via telephonic equipment.
Adams and Reese continues to closely monitor TCPA developments—future updates will follow as changes occur.
On September 20, 2018, the 9th U.S. Circuit Court of Appeals published its opinion in Marks v. Crunch San Diego LLC vacating summary judgment in favor of the defendant on the issue of whether the communication platform used to communicate with the plaintiff qualified as an ATDS under the TCPA, 47 U.S.C. § 227.
When must a device require the “capacity” to perform the two enumerated functions?
What precisely are those functions?
Earlier this year, the D.C. Circuit vacated prior FCC orders, attempting to clarify these questions in ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018). The ACA Int’l opinion was a success for the defense bar in reopening a number of arguments to exclude companies’ communication systems as an ATDS.
The primary issues now litigated post-ACA Int’l include the following: whether a predictive dialer qualifies as an ATDS, whether equipment qualifies as an ATDS if it automatically dials numbers from a stored list, whether human intervention in initiating the communications excludes a system as an ATDS and whether an ATDS must have actual current configuration to generate numbers and dial them or if potential capacity/future ability to do so is sufficient. See Reyes v. BCA Financial, 312 F.Supp 3d 1308 (S.D. Fla. 2018).
The Court agreed with many other courts, deciding that the statutory definition is ambiguous. As a result, the Court closely analyzed the history and plain language of the TCPA and prior related case law. Interestingly, the Court joined a growing number of other courts, finding that all of the FCC’s prior orders on these issues are no longer binding based upon the ACA Int’l opinion.
The Court ultimately concluded that the statutory definition of an 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. The Court further rejected the argument that human intervention will exclude equipment as an ATDS, as some sort of human intervention in turning on the machine or initiating its functions will always be required. The Court vacated the underlying judgment and remanded for further proceedings as to whether the system at issue qualifies as an ATDS under its decided meaning.
What’s next for TCPA litigation?
In the coming months and years, we expect continued litigation on these issues, as there are numerous post-ACA Int’l opinions from other jurisdictions that conflict with Marks. Most notably, the 3rd Circuit and 2nd Circuit held in June this year that only a device that generates random or sequential numbers qualifies as an ATDS. See Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018), King v. Time Warner Cable, Inc., 894 F.3d 473 (2d Cir. 2018). The Marks Court expressly declined to follow the Dominguez opinion, finding it unpersuasive. Additionally, there are a number of more recent decisions that analyze the human intervention exception on a deeper level than Marks, and those courts continue to recognize the same. We expect these conflicts to be raised before the Supreme Court.
We will continue to monitor these developments and update our clients and friends accordingly.

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