Consumer Finance Insights
November 14, 2018

Ninth Circuit’s Mandate on ATDS Definition Stayed Pending Petition for Writ of Certiorari

On November 7, 2018, in the closely-followed case Marks v. Crunch San Diego, LLC, No. 14-56834 (9th Cir.), the Ninth Circuit granted a stay of its ruling on the Telephone Consumer Protection Act’s (TCPA) definition of an “automatic telephone dialing system” (ATDS) while appellee Crunch San Diego, LLC files a petition for writ of certiorari of that ruling to the Supreme Court.

The stay pertains to the three-judge panel’s September 20, 2018 opinion interpreting an ATDS broadly to include equipment that stores and dials telephone numbers from a list, regardless of whether those numbers were randomly or sequentially generated.  In issuing the opinion, the Ninth Circuit became the third appellate court to address this issue in the wake of the D.C. Circuit’s decision in ACA International, which left the circuit courts to their own devices in interpreting the meaning of an ATDS and accordingly set in motion a good deal of confusion and inconsistent conclusions from courts interpreting the statutory language.  Following the panel’s decision, Crunch filed a petition for rehearing and petition for rehearing en banc, which was denied in a one-page decision.

In the unopposed motion to stay, Crunch argued that the certiorari petition will present substantial questions under the TCPA because the panel’s broad reading creates a circuit split.  Earlier this year, the Third Circuit weighed in on the definition of an ATDS and came away with a much narrower reading, which the Ninth Circuit panel in fact acknowledged in its decision.  Crunch also pointed out that in ACA International, the D.C. Circuit held that an ATDS could not be construed so broadly as to “render every smartphone an ATDS.”  Crunch argues that, under the Ninth Circuit panel’s interpretation of an ATDS,  TCPA liability could potentially extend to all smartphone owners and users – since all smartphones have the capacity to dial from a stored list of numbers, e.g., contact lists or automatic replies that obviate ever having to manually dial a 10-digit number – and thus create a conflict between the two Circuits’ decisions.

The stay comes shortly after the close of the public comment period solicited by the Federal Communications Commission (FCC) on how to interpret the definition of an ATDS in light of Marks.  It remains to be seen whether the Supreme Court would grant cert., especially since the FCC has demonstrated this recent effort to address the very exact issue.  With the hotly contested ATDS issue on track to be simultaneously before both the Supreme Court and the FCC, it will be important to track any activity on either front, especially since these developments may expedite a long awaited ruling from the FCC.