Written by Nicole Su

In Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), cert. dismissed, 139 S. Ct. 1289 (2019), the Ninth Circuit adopted an expansive definition of an ATDS that includes devices that dial from a stored list of telephone numbers.  Since then, no other circuit court has weighed in on whether it will follow or reject Marks.  But the footprint of Marks appears to be slowly spreading across lower courts outside of the Ninth Circuit. 

Previously, the only lower court outside of the Ninth Circuit to follow Marks was a Florida court in the Eleventh Circuit.  See Adams v. Ocwen Loan Servicing, LLC, 18-81028-CIV, 2018 WL 6488062 (S.D. Fla. Oct. 26, 2018)(“Court agrees with the reasoning and conclusions of post-ACA decisions which hold that ‘the statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.’ Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1043 (9th Cir. 2018)”).

Recently, however, a lower court within the First Circuit has also adopted Marks. In Gonzalez v. Hosopo Corporation, 2019 WL 1533295 (D. Mass. Apr. 9, 2019), the District Court held:

“[T]o qualify as an ATDS…a device need only have the capacity to… (1) ‘store…telephone numbers to be called’ and ‘dial such numbers,’ or (2) ‘produce telephone numbers to be called, using a random or sequential number generator’ and ‘dial such number.’” 

Stated another way, the Court found that a device that has the capacity to dial numbers from a stored list of numbers is an ATDS.

The Court undertook the following analysis to reach to its conclusion. 

First, the Court noted that the parties agreed ACA Int’l. v. Fed. Commun. Commn., 885 F.3d 687(D.C. Cir. 2018)  overturned the FCC’s 2015 Order interpreting what constituted an ATDS, but disagreed as to whether ACA Int’l also overturned FCC’s 2003, 2008 and 2012 rulings.  The Court said ultimately it is irrelevant whether the prior rulings were invalidated because the conclusion would remain the same: the equipment need not itself be able to generate random or sequential numbers to qualify as an ATDS.

Second, the Court undertook an analysis of several different ATDS decisions and concluded that the Marks analysis was the correct one.  But the Gonzalez court went further than Marks and found that applying both “store” and “produce” to the term “using a random or sequential number generator” just didn’t make sense.  Specifically, it was not clear to the court how a device could “store” numbers using a number generator.  Thus, the logical conclusion—according to the court—was that the phrase “using random or sequential number generator” only modified the verb “produce” and not “store.” 

After finding that a device that dials from a list of stored numbers qualified as an ATDS, the Court then examined the sufficiency of Plaintiff’s allegations regarding Defendant’s use of an ATDS. The Court held that Plaintiff’s allegation that he heard “a click and a pause,” and received a high number of calls in a short period of time all for the same purpose raised a plausible inference that Defendant had used an ATDS in making the alleged calls at issue to Plaintiff.

As it stands, two lower courts outside of the Ninth Circuit have adopted Marks.  On the other hand, lower courts in the Seventh and Eight Circuits have rejected MarksSee Roark v. Credit One Bank, N.A., CV 16-173 (PAM/ECW), 2018 WL 5921652 (D. Minn. Nov. 13, 2018); Thompson-Harbach v. USAA F.S.B., 359 F. Supp. 3d 606, 625 (N.D. Iowa 2019); Gadelhak v. AT&T Services, Inc., 17-CV-01559, 2019 WL 1429346, (N.D. Ill. Mar. 29, 2019).

It remains to be seen how the other courts will rule and whether we will receive clarity from the FCC anytime soon.  But until the FCC provides such clarity, it appears that this sort of inconsistency will remain the status quo.


 


 

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