Consumer Finance Insights
June 6, 2018

In the Wake of ACA International, Four Cases Follow Suit

On March 16, 2018, the D.C. Circuit issued a long-awaited ruling in ACA International v. FCC, which struck down the Federal Communications Commission’s (FCC’s) expansive interpretation of the Telephone Consumer Protection Act’s (TCPA’s) “automatic telephone dialing system” (ATDS) definition.  As LenderLaw Watch analyzed more fully here, the D.C. Circuit focused on (a) whether the equipment has the “capacity” to perform the enumerated statutory functions of an ATDS (i.e., storing or producing telephone numbers “using a random or sequential number generator” and dialing such numbers) and, if so, (b) whether that capacity was used to make the challenged call.

Four district court decisions have come down since, which have all followed ACA International.  Both Marshall v. CBE Grp., Inc., 2018 WL 1567852 (D. Nev. Mar. 30, 2018) and Maddox v. CBE Grp., Inc., 2018 WL 2327037 (N.D. Ga. May 22, 2018) involved a technology that places calls using a “Manual Clicker Application” (MCA), which requires a user to manually click on a computer screen, causing the software to dial a telephone number.  In Marshall, the plaintiff argued that the MCA was an ATDS because it actively tracked information about each call.  The court disagreed, finding that the ability to track calls does not mean that the system “us[es] a random or sequential number generator,” as would be required for an ATDS.  Relying on historic FCC guidance, the plaintiff also argued that ATDS could include technology, like the MCA, that dials from a “fixed set of numbers.”  Consistent with ACA, the court disagreed, finding that such an interpretation would encompass technology “that cannot be programmed to dial random or sequential numbers.”

Similarly, in Maddox, the court held that an MCA system was not an ATDS because it could not dial numbers without human intervention.  The plaintiff argued that the system was an ATDS because it dialed numbers automatically, without the need for the user to manually dial phone numbers.  The court rejected that argument, finding that the question is whether the system can “automatically dial a phone number, not whether the system makes it easier to dial the number.”

A third case, Herrick v. LLC, 2018 WL 2229131 (D. Ariz. May 14, 2018), involved a technology that could dial numbers that users input into the system through a pre-programmed list.  The court found that the system was not an ATDS because it could not independently generate (randomly or sequentially) telephone numbers and automatically dial them.  The court also found that the system was not an ATDS because it was not configured as such at the time of the complained-of conduct.”  In reaching its findings, the Herrick court—like the Marshall court—concluded that ACA International had invalidated the historical FCC guidance (2003 and 2008) relied upon by plaintiffs in arguing that the technology at issue was an ATDS.

In a fourth case, Reyes v. BCA Financial Servs., Inc., 2018 WL 2220417 (S.D. Fla. May 14, 2018), the court—relying upon historic FCC guidance from 2003 (2003 FCC Order, 18 F.C.C.R. 14014)—determined that the technology was an ATDS because it is a “predictive dialer” that “automatically dials telephone numbers without human intervention.”  In reaching its conclusion, the Reyes court found that ACA International did not specifically overrule any prior FCC orders, and distinguished the Marshall case—which addressed the same FCC order—holding that Marshall did not address whether the 2003 FCC Order remained binding.

LenderLaw Watch will continue to monitor developments in the TCPA in the wake of ACA International.

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