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

TCPA Connect

Over a year after the ACA International (ACA) decision from the D.C. Circuit that 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) guidance, the courts remain split on what constitutes an ATDS, with no immediate relief in sight. However, the tide may be turning as the consistent and pervasive wave of case law interpreting ACA has slowed down considerably in the past month.

Since ACA, federal district judges have issued opinions interpreting the decision, with district courts in the Ninth Circuit consistently following the plaintiff-friendly decision Marks v. Crunch San Diego, and others following either Marks or, to a greater extent, the Second Circuit’s opinion in King v. Time Warner Cable and/or the Third Circuit’s opinion in Dominguez v. Yahoo, both of which arguably favor defendants. The Second, Third and Ninth Circuits’ decisions remain the only significant appellate decisions on ACA, with the Ninth Circuit weighing in again in the recent Duguid v. Facebook case, which reaffirmed Marks. The FCC still has not issued any new guidance defining an ATDS in the post-ACA world.  

Since our last update, we have observed no significant shift in how the district courts are interpreting ACA, except that the number of cases has considerably slowed—i.e., still a little over half of the district court cases we have reported on have found that there was an ATDS when applying ACA (though there has been a slight uptick in this regard in favor of plaintiffs surviving dismissal), about a third have held that ACA invalidated all prior FCC orders defining an ATDS, and about one-fifth have found that human intervention, as opposed to just the 2015 order discussed in ACA, was a deciding factor. The volume of district court decisions on ACA has, however, slowed somewhat over the past couple of months, this past month especially, which may be the result of the Fourth Circuit’s and Ninth Circuit’s recent decisions finding one of the TCPA exemptions (the so-called “debt-collection exemption” for government debt collectors) to be a content-based restriction on speech in violation of the First Amendment to the U.S. Constitution. We continue to wait and see whether these key decisions will make their way to the Supreme Court on the issue of whether the TCPA itself is constitutional, which would undoubtedly moot and/or slow new decisions regarding the interpretation of ACA.

Since our last update, there have been no new appellate decisions and only two new district-level opinions: one from the Second Circuit and one from the Seventh Circuit. Notably, the Seventh Circuit, despite a large volume of cases interpreting ACA at the district court level, and other circuit courts of appeal have still refrained from weighing in so far. And while beyond the scope of this article, we have noted that litigants are still seeking to stay their cases because of ACA—arguing that the court should stay the case until the circuit split is resolved and/or the FCC provides guidance—with varying degrees of success.

As part of our continuing coverage in this area, Manatt’s TCPA Team monitors and reports 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. To read all our previous articles on post-ACA International developments, please click here.

Gerrard v. Acara Sols. Inc., No. 18-CV-1041V(F), 2019 WL 2647758, at *14 (W.D.N.Y. June 27, 2019). Following the Second Circuit’s opinion in King v. Time Warner Cable, Inc., U.S. Magistrate Judge Leslie G. Foschio of the Western District of New York denied the defendant’s motion to dismiss because the plaintiff adequately alleged the use of an ATDS—specifically, a device with the capacity to produce numbers using a random or sequential number generator—to send text messages to the plaintiff. Judge Foschio defined “capacity” under the TCPA as “a device’s current functions, absent any modification to the device’s hardware or software” (quoting King). The court also rejected the defendant’s contention that “human intervention” negates an inference of the use of an ATDS.

To read the full decision in Gerrard v. Acara Solutions Inc., click here. 

Espejo v. Santander Consumer USA, Inc., No. 11 C 8987, 2019 WL 2450492, at *1 (N.D. Ill. June 12, 2019). In Espejo, U.S. District Judge Charles P. Kocoras denied the defendant’s renewed motion for summary judgment on claims concerning the defendant’s use of the Aspect Telephone System (Aspect) to make calls regarding outstanding auto loans to consumers. Aspect has a dialer function that dials phone numbers from a list using an algorithm; however, the dialer makes a call only after an agent logs in and presses a button to indicate that the agent is available. The court interpreted ACA and concluded that both 2003 and 2008 FCC rulings were vacated. Moreover, the court found that based on the purpose of the TCPA, the defendant’s Aspect system constitutes an ATDS because it automatically dials numbers from a set customer list. Thus, the court held that the Aspect system did not need to utilize a random, sequential number generator to satisfy the definition of an ATDS.

To read the full decision in Espejo v. Santander Consumer USA, Inc., click here.

A Numerical Overview of Post-ACA International Cases

At the time of publication of this edition of TCPA Connect, the overall landscape of post-ACA case law breaks down as follows (changes reflected in bold):  

Case Law by FCC Order Validity

  • 12 cases say all FCC orders invalidated
  • 32 cases say only some/part of FCC orders invalidated

Case Law by Circuit

  • 1 case from the 1st Circuit district courts
  • 18 cases from the 2d Circuit district courts and 1 from the 2d Circuit
  • 7 cases from the 3d Circuit district courts and 1 from the 3d Circuit
  • 1 case from the 4th Circuit district courts
  • 0 cases from the 5th Circuit district courts
  • 5 cases from the 6th Circuit district courts
  • 11 cases from the 7th Circuit district courts
  • 2 cases from the 8th Circuit district courts
  • 11 cases from the 9th Circuit district courts and 2 from the 9th Circuit
  • 2 cases from the 10th Circuit district courts
  • 11 cases from the 11th Circuit district courts

Case Law by Appellate Level

  • 4 appellate-level cases (2d, 3d, 9th Circuits)

Case Law by Autodialer Decision

  • 31 cases where an autodialer was found
  • 25 cases where autodialers were not found
  • 11 cases where human intervention was a deciding factor in determining that a system was not an ATDS

To read all of our previous articles on post-ACA International developments, please see here.