Manatt’s Continuing Coverage on Significant Post-ACA International Developments

TCPA Connect

As we have previously reported, the recent ACA International decision from the D.C. Circuit changed the face of litigation in the Telephone Consumer Protection Act (TCPA) world by striking down the Federal Communication Commission’s (FCC’s) 2015 automatic telephone dialing system (ATDS) definition. As part of our continuing coverage in this area, the Manatt TCPA team has been reporting on significant developments at the FCC and on noteworthy (i.e., dispositive or class certification-related) federal district- and appellate-level decisions interpreting, applying or otherwise evaluating ACA in ways that may impact our readers.

At the government level, the FCC still has not weighed in, and in fact, a group of senators has recently sent a letter to FCC Chairman Ajit Pai, urging him and the FCC to take immediate action to protect consumers. For our article discussing that letter in more detail, please click here.

At the judicial level, while the opinions—including appellate decisions from the Second and Third circuits—initially came quickly, after the D.C. Circuit handed down its opinion, we have observed somewhat of a slowdown this past month. (However, we do not necessarily see this trend continuing, because many cases were stayed pending the D.C. Circuit’s opinion.) So, for this edition of TCPA Connect, there were only two district court decisions of note, both coming out of the Sixth Circuit and in favor of the defendants.

Lord v. Kisling, Nestico & Redick, LLC, 2018 WL 3391941 (N.D. Ohio, July 12, 2018). In this putative class action, the plaintiffs alleged the defendant sent unsolicited marketing messages in violation of the TCPA. The defendant moved to dismiss, arguing the platform used to send the messages was not an ATDS. In granting the motion to dismiss, the court found the D.C. Circuit’s interpretation of an ATDS in ACA International a persuasive (but apparently not binding) authority and, therefore, followed the D.C. Circuit’s holding rejecting the “capacity” or “potential functionality” test. Thus, the court found that for the telephone system used to be considered an ATDS, “Plaintiffs’ claim must allege plausible facts that KNR’s system has the ability to store or produce telephone numbers using a random or sequential number generator.” Finding that the plaintiffs did not allege any facts showing the defendants used a system with the ability to store or produce phone numbers to be called using a random or sequential number generator, the court dismissed the claim. Notably, the district judge expressly stated that, after ACA, “The fact that KNR’s system may[ ]be capable of sending bulk or mass messages without human intervention is irrelevant.”

Gary v. TrueBlue, Inc., 2018 WL 3647046 (E.D. Mich. Aug. 1, 2018). In this putative class action, the plaintiff alleged that the defendant, a work placement agency, used an ATDS to send him thousands of text messages without his consent after he completed a job application and signed a “consent for telephone contact” form giving the defendant “express permission and consent” to contact the applicant at the telephone number listed on the application in order to alert him of potential job assignments. Moving for summary judgment, the defendant presented evidence showing, among other things, that its calling system could not send text messages without human intervention (e.g., it did not allow for “form” messages and it required an employee to select and send messages to recipients for specific job opportunities) and could not randomly or sequentially dial to send text messages. Conversely, the plaintiff argued that the system had the capacity to send text messages without human intervention primarily to the extent the system would send automatic replies or independently dial numbers from a set list. Denying summary judgment, the district court first considered whether ACA was binding on the district court and suggested it likely would be, under the Sixth Circuit’s holding in Sandusky, but ultimately ruled that it need not decide that issue now because the plaintiff could “not prevail under any potentially applicable TCPA standard.” The court then rejected the plaintiff’s argument that the defendant’s system was an ATDS, applying both ACA and the FCC’s 2015 order, holding that the fact that the system at issue sends texts to a set list of recipients or automated replies does not make it an ATDS, because (i) “Defendant ha[d] provided evidence that the texts [its system] sends to potential workers require human intervention, preventing the system from qualifying as an ATDS” and (ii) “Plaintiff ha[d] not shown that all reasonable people would conclude that the automated confirmation texts establish the [defendant’s] system as an autodialer.”

To read the entire decision in Lord v. Kisling, Nestico & Redick, LLC, please click here.

To read the entire decision in Gary v. TrueBlue, Inc., please click here.

Why these cases matter: The Lord and Gary holdings show that district courts are still struggling with how to interpret and apply ACA International when determining whether a defendant’s dialing system qualifies as an ATDS under the TCPA, and with whether ACA is binding outside the D.C. Circuit. These cases also show that the outcome in an ATDS argument may depend on how much emphasis the court places on the amount of “human intervention” required to make the calls, at least until the FCC weighs in on the issue. Manatt’s TCPA Compliance and Class Action Defense Group continues to monitor developments in this area and will continue to report on post-ACA decisions if and until the FCC finally weighs in and gives some much needed clarity.

To read our continuing coverage on all post-ACA International developments please click here.