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District court orders TCPA suit to mediation, states FCC’s interpretation of autodialer may take years
On February 1, the U.S. District Court for the Eastern District of Missouri issued an order referring the parties in a putative TCPA class action to mediation. The plaintiff’s complaint alleges that the defendant’s insurance company sent her text messages without her consent using an automatic telephone dialing system (autodialer). In response, the defendant argued that the software it used to send the text messages does not qualify as an autodialer because it calls numbers from a pre-set list, instead of one that is randomly or sequentially generated. The defendant further argued that the case should be stayed because the FCC is currently considering whether systems such as the one at issue qualify as autodialers under the TCPA following the D.C. Circuit’s March 2018 ruling in ACA International v. FCC, which set aside the FCC’s 2015 interpretation of an autodialer as “unreasonably expansive.” (Covered by a Buckley Special Alert.) The decision to refer the case to mediation comes after the court’s August 2018 order denying the defendant’s motion to stay the proceeding. In that order the court explained that, although the FCC issued a notice in May 2018 (covered by InfoBytes here) seeking comments on the interpretation of the TCPA, the rulemaking process would likely take years and may not even resolve the issue in the case.
District Court allows TCPA action to proceed, citing 9th Circuit autodialer definition as binding law
On January 17, the U.S. District Court for the District of Arizona denied a cable company’s motion to stay a TCPA action, disagreeing with the company’s arguments that the court should wait until the FCC releases new guidance on what constitutes an automatic telephone dialing system (autodialer) before reviewing the case. A consumer filed a proposed class action against the company, arguing that the company violated the TCPA by autodialing wrong or reassigned telephone numbers without express consent. The company moved to stay the case, citing the FCC’s May 2018 notice (covered by InfoBytes here), which sought comments on the interpretation of the TCPA following the D.C. Circuit’s decision in ACA International v. FCC (setting aside the FCC’s 2015 interpretation of an autodialer as “unreasonably expansive”). The company argued that the FCC would “soon rule on what constitutes an [autodialer], a ‘called party,’ in terms of reassigned number liability, and a possible good faith defense pursuant to the TCPA,” all of which would affect the company’s liability in the proposed class action. The court rejected these arguments, citing as binding law Marks v. Crunch San Diego, LLC, a September 2018 decision from the U.S. Court of Appeals for the 9th Circuit that broadly defined what constitutes an autodialer under the statute (covered by InfoBytes here), and therefore, determining there was nothing to inhibit the court from proceeding with the case. As for the FCC’s possible future guidance on the subject, the court concluded, “there seems little chance that any guidance from the FCC, at some unknown, speculative, future date, would affect this case.”
District Court dismisses TCPA action against ride-sharing company, allows plaintiff to correct deficiencies
On January 16, the U.S. District Court for the Southern District of California granted in part and denied in part a ride-sharing company’s motion to dismiss a proposed TCPA class action, holding that the plaintiff sufficiently alleged the company is vicariously liable for the sent text messages but that the plaintiff failed to sufficiently allege the use of an “automatic telephone dialing system” (autodialer). According to the opinion, the plaintiff received two unsolicited text messages from a commercial messaging system instructing him to download the ride-sharing company’s app and providing a link to download the app. The plaintiff filed suit arguing the commercial text system was acting as an agent of the company for the company’s financial benefit and that the texts were sent using an autodialer in violation of the TCPA. The company moved to dismiss the action. With regard to the use of an autodialer, the court agreed with the company, determining that the plaintiff “merely parrots [the] statutory definition of an [autodialer]” and fails to assert facts that could support a reasonable inference that the company used an autodialer to send the texts. As for vicarious liability, the court concluded that the plaintiff sufficiently alleged the company’s actual authority over the commercial messaging system by asserting the company “instructed its agent or vendor as to the content of the text messages and timing of the sending of the text messages.” The court dismissed the plaintiff’s amended complaint but allowed 30 days for the plaintiff to amend the deficiencies.
On December 20, the U.S. District Court for the District of New Jersey granted a student loan company’s motion for summary judgment, holding that the plaintiff failed to establish the company’s phone system qualified as an automated telephone dialing system (autodialer) under the TCPA. The plaintiff alleged the company violated the TCPA by using an autodialer to call his cell phone without his prior express consent. Each party filed cross-motions for summary judgment with the plaintiff arguing that the company’s system “had the present capacity without modification to place calls from a stored list without human intervention.” The company disagreed with the plaintiff’s assertions, arguing that it used separate systems for land lines and cell phones, and that the system which dialed the cell phone “contains no features that can be activated, deactivated, or added to the system to enable autodialing.” Citing to the opinion of the U.S. Court of Appeals for the 3rd Circuit in Dominguez v. Yahoo (previously covered by InfoByres here), which held that it would interpret the definition of an autodialer as it would prior to the FCC’s 2015 Declaratory Ruling, the court noted that the term “capacity” in the TCPA’s autodialer definition refers to the system’s current functions, not its potential capacity. Because the plaintiff failed to establish that the system used to dial his cell phone had the “present capacity” to initiate autodialed calls without modifications, the court concluded the claim failed as a matter of law.
On December 10, the U.S. District Court for the District of New Jersey denied a medical laboratory’s motion to dismiss a putative TCPA class action against the company, holding the plaintiff sufficiently alleged the equipment used to make unsolicited calls qualified as an “autodialer.” According to the opinion, the plaintiff filed the class action against the company after receiving an unsolicited call to her cell phone and hearing a “momentary pause” before a representative started speaking, allegedly indicating the company was using an automatic telephone dialing system (autodialer). The plaintiff argues the company violated the TCPA by placing non-emergency calls using an autodialer without having her express consent. The company moved to dismiss the action, arguing the plaintiff did not sufficiently allege the company called her using an autodialer. The court disagreed, stating that “[d]ead air after answering the phone is indicative that the caller used a predictive dialer.” The court noted that a predictive dialer is a device considered an autodialer under binding precedent, citing to the opinion of the U.S. Court of Appeals for the 3rd Circuit in Dominguez v. Yahoo, which held that it would interpret the definition of an autodialer as it would prior to the FCC’s 2015 Declaratory Ruling, which was invalidated by the D.C. Circuit. (Previously covered by InfoBytes here.) The court acknowledged that the actual configuration of the dialing equipment should be explored in discovery, but at this stage, the plaintiff sufficiently alleged the use of an autodialer for purposes of the TCPA.
On November 29, the U.S. District Court for the District of New Jersey partially denied a company’s motion to dismiss proposed class action allegations that it violated the TCPA when it used an automatic telephone dialing system (ATDS) to send unsolicited text messages to customers’ cell phones that resulted in additional message and data charges. According to the opinion, the company sent three text messages to the plaintiff who responded to two of them. The first message gave the plaintiff the option to send “STOP” to opt out or “HELP” to receive assistance. Because the plaintiff texted “HELP” in response, the court found that the plaintiff consented to receiving the company’s second message; the court found that the third follow-up message was permissible because it was a single “confirmatory message” sent after the plaintiff texted “STOP” after receiving the second follow-up message. However, the court determined that the plaintiff satisfied the burden of showing at this stage in the proceedings that the first text message was sent from a company with whom he had no prior relationship and had not provided consent. “When an individual sends a message inviting a responsive text, there is no TCPA violation,” the judge ruled. “The TCPA prohibits a party from using an ATDS ‘to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party,’ unless the call falls within one of the statute’s enumerated exemptions.”
The court further denied the company’s motion to stay pending the FCC’s interpretation of what qualifies as an ATDS in light of the decision reached by the D.C. Circuit in ACA International v. FCC, stating, among other things, that the company “has not established the FCC proceedings will simplify or streamline the issues in this matter” and that the plaintiff is entitled to discovery concerning the company’s communication devices.
On November 13, the U.S. District Court for the District of Minnesota held that a bank’s predictive dialing systems do not violate the Telephone Consumer Protection Act (TCPA), granting summary judgment for the bank. According to the opinion, a customer of a national bank changed his phone number and his previous number was reassigned to the plaintiff in the case. The customer did not inform the bank he had changed his phone number, and between September 2015 and December 2015, the bank called the plaintiff’s cell phone 140 times. The plaintiff subsequently informed the bank he was not a customer and the bank ceased calling the cell phone number. In January 2016, the plaintiff filed a complaint alleging the company violated the TCPA by placing auto-dialed calls to his cell phone. The court stayed the action pending the result of the D.C. Circuit case ACA International v. FCC (covered by a Buckley Sandler Special Alert), which narrowed the FCC’s 2015 interpretation of “autodialer” under the TCPA.
In reviewing cross-motions for summary judgment, the court disagreed with the plaintiff that the company’s predictive dialing systems qualified as an autodailer under the TCPA. Citing to ACA International, the court noted that predictive dialers are not always autodialers under the Act, the equipment must have the capacity to randomly or sequentially generate numbers to dial, and the plaintiff failed to provide sufficient evidence to prove the systems has this capability. Moreover, the court rejected the plaintiff’s argument that it should follow the 9th Circuit, which recently broadened the definition of autodialer under the TCPA (covered by InfoBytes here), concluding that other courts’ narrow interpretations were more persuasive (InfoBytes coverage available here).
On October 30, a third-party debt collector and its affiliates (defendants) entered into a stipulated final judgment in the Superior Court of California to settle a consumer protection lawsuit brought by the state of California over allegedly illegal debt collection calling practices. According to a press release issued by the Los Angeles County District Attorney, the defendants allegedly violated California’s Rosenthal Fair Debt Collection Practices Act, the FDCPA, and the TCPA by calling consumers with “excessive frequency,” continuing to call consumers even after being advised that they had reached the wrong number, and using a “predictive dialer” to place calls to consumers’ cell phones without their consent. By entering into the judgment, the defendants—who have not admitted to the allegations in the complaint—will, among other things, (i) pay $1 million in monetary relief; (ii) pay an $8 million civil penalty; (iii) maintain records of calls and complaints; (iv) conduct compliance training for employees responsible for outbound debt collection calls; and (v) conduct an annual third-party audit to ensure compliance with the settlement.
On October 30, the U.S. District Court for the Western District of Wisconsin denied a company’s motion to dismiss allegations that it violated the TCPA when it used a predictive dialer to try to collect a debt from the plaintiff. According to the opinion, the plaintiff alleged the company called him repeatedly without permission in an attempt to collect a debt using a predictive dialer. The company moved to dismiss because the plaintiff did not allege that the company used an autodialer with the ability to dial random or sequential phone numbers, which the company argued was required by the TCPA. The court found that a predictive dialer is an autodialer under the TCPA even if it does not generate random or sequential numbers. This conclusion was based on a 2003 FCC ruling, which stated that predictive dialers are autodialers “even if the device does not dial random or sequentially generated numbers.” The court further noted that the decision reached by the D.C. Circuit in ACA International v. FCC—which set aside the FCC’s 2015 interpretation of an autodialer as unreasonably expansive—did not invalidate the FCC’s 2003 order. (See previous Buckley Sandler Special Alert on ACA International here.) Based on this analysis, the court concluded that the plaintiff had established the three elements necessary to allege a TCPA violation.
On October 30, the U.S. Court of Appeals for the 9th Circuit denied a California gym’s petition for a rehearing en banc of the court’s September decision reviving a TCPA putative class action. As previously covered by InfoBytes, the appeals court vacated a district court order granting summary judgment in favor of the gym, concluding that there was a genuine issue of material fact as to whether the text system used by the gym—which stores numbers and dials them automatically to send the messages—qualified as an “autodialer” under the TCPA. Notably, in vacating the summary judgment order, the 9th Circuit performed its own review of the statutory definition of an autodialer in the TCPA, because the recent D.C. Circuit opinion in ACA International v. FCC (covered by a Buckley Sandler Special Alert) set aside the FCC’s definition. Through this review, the appeals court concluded that the TCPA defined an autodialer broadly as “equipment which has the capacity—(i) to store numbers to be called, or (ii) to produce numbers to be called, using a random or sequential number generator—and to dial such numbers automatically (even if the system must be turned on or triggered by a person).”
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