Consumer Finance Insights
August 7, 2018

Northern District of Illinois Grants Judgment on the Pleadings to TCPA Defendant

On July 26, 2018, the Northern District of Illinois granted a Telephone Consumer Protection Act (TCPA) defendant judgment on the pleadings because plaintiff failed to allege a required element of his claim—the use of an automatic telephone dialing system (ATDS).  Pinkus v. Sirius XM Radio, Inc., 2018 WL 3586186 (N.D. Ill. July 26, 2018), is noteworthy in several respects, but particularly because of the court’s thorough analysis of the D.C. Circuit’s recent decision in ACA International v. FCC.  TCPA defendants should carefully monitor developments as district and circuit courts throughout the country interpret ACA.

By way of brief background, ACA (which we covered in detail here) involved a challenge to several aspects of the Federal Communication Commission’s (FCC’s) 2015 order interpreting the TCPA.  One part of the FCC’s order was its interpretation of the TCPA’s ATDS requirement.  The FCC concluded that equipment that has the potential capacity (as opposed to merely the present capacity) to operate as an ATDS met the statutory ATDS definition.  Additionally, the FCC reaffirmed prior orders (from 2003 and 2008) that instructed, alternatively, that an ATDS could be either (1) equipment which generated and dialed random or sequential numbers, or (2) equipment that lacked the capacity to generate or dial random or sequential numbers, but could nonetheless dial from a list without human intervention.  The D.C. Circuit ultimately struck down that part of the FCC’s 2015 order, though courts have reached different conclusions regarding whether the D.C. Circuit’s decision reached the FCC’s earlier ATDS interpretations.

In Pinkus, plaintiff alleged that Sirius violated the TCPA by calling his cellphone over one hundred times using an ATDS.  In alleging that Sirius used an ATDS, plaintiff relied on the claim that Sirius’ calling technology was a predictive dialer capable of placing calls without human intervention.  Given the centrality of the ATDS issue, Pinkus was stayed pending the D.C. Circuit’s decision in ACA.  In the wake of ACA, plaintiff filed an amended complaint, but again relied on his predictive-dialer allegations.  Arguing that predictive dialers do not meet the TCPA’s ATDS definition, Sirius moved for judgment on the pleadings.

Noting that other courts had reached different conclusions regarding the effect of ACA, the court found that ACA invalidated all of the FCC’s prior orders.  This was because the same rationale underlay all three orders, and the D.C. Circuit’s rejection of that rationale in the 2015 order was equally applicable to the 2003 and 2008 orders.  The Northern District of Illinois first explained that the D.C. Circuit struck down the FCC’s 2015 order because (1) its potential capacity finding was unreasonable and (2) the FCC’s ATDS definitions were inconsistent and thus fell short of the requisite reasoned decisionmaking.  The court then explained that the inconsistencies in the ATDS definitions provided in the 2015 order were simply reiterations of the FCC’s earlier, equally inconsistent pronouncements in the 2003 and 2008 orders.  Thus, because the 2015 order could not stand in light of those inconsistencies, the 2003 and 2008 orders necessarily also must be struck down.

Having concluded that ACA struck down all of this guidance, the court turned to the TCPA’s statutory ATDS definition.  Under that definition, an ATDS is “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”  Interpreting the statute, the court explained that, to be an ATDS, equipment must rely on random or sequential number generation whether in the storing or production of telephone numbers to be dialed.  And, because plaintiff had alleged that he was called using a predictive dialer and not random or sequential number generation, judgment on the pleadings in Sirius’ favor was appropriate.

Defendants facing TCPA cases based on alleged ATDS calls to cellphones should consider whether Pinkus might aid their defense and should continue to watch decisions interpreting ACA as they emerge.