Telemarketers across the nation continue to grapple with a deepening divide when it comes to the definition of an “autodialer” under the Telephone Consumer Protection Act. The seminal ACA International decision by the D.C. Circuit, and the recent and expansive Marks v. Crunch San Diego, LLC decisions are just two of many recent court rulings that are rapidly changing the face of TCPA litigation.
The TCPA defines an autodialer as “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.”
The most recent addition to the judicial split when it comes to how to interpret the TCPA’s language regarding dialing “capacity” is a Minnesota federal court. In Roark v. Credit One Bank, N.A., No. 16-173, 2018 WL 5921652 (D. Minn. Nov. 13, 2018) the court attempted to reconcile four appellate cases concerning the definition of an ATDS. Importantly, the Roark court ruled that the defendant’s “predictive dialing systems” did not violate the TCPA.
The defendant in Roark, a national bank, allegedly made a series of collections telephone calls through its vendor to a customer number that had, unbeknownst to the defendant, been reassigned.
First, the Roark court considered that the D.C. Circuit in ACA International rejected the FCC’s 2015 “potential capacity” because it would render “nearly every phone on earth” an autodialer. The Roark court then considered “more persuasive” Second and Third Circuit decisions in concluding that the proper area of inquiry is present capacity to function as an autodialer, not whether the equipment could be modified to function as an ATDS. The court then rejected the plaintiff-friendly Ninth Circuit ruling in Marks (any system which has the capacity to “store numbers” is an autodialer – generating numbers is not a prerequisite of an ATDS).
“The correct inquiry is whether a device can generate numbers to dial either randomly or sequentially,” the Roark court concluded. Here, the evidence demonstrated that defendant’s predictive dialing equipment did not presently have the capability to do so.
The Roark court also considered the “reassigned” telephone number issue.
The TCPA makes it unlawful to use an artificial or prerecorded voice to place a call to a cell number without “the prior express consent of the called party.” The FCC has interpreted the statutory term “called party” as the current subscriber of the cell number and not the intended recipient of the call. The decision in ACA Int’l¸ however, invalidated a portion of the FCC ruling that allowed for a one-call “safe harbor” rule for reassigned numbers and “set aside the Commission’s treatment of reassigned numbers as a whole.” The Roark court held that in order to determine whether there has been a violation of this section of the TCPA under current authority, the reasonableness of the caller’s reliance on a prior number holder’s express consent must be considered.
The defendant had express consent from its customer to call him at the number he provided, including consent to call him with prerecorded messages. The court stated that the defendant had no reason to know that the phone number had been reassigned because they received no notice from Roark and the caller I.D. for the number still populated with his information. On this basis and on this issue too, the court ruled in the defendant’s favor.
Takeaway: Conflicting circuit-level guidance suggests that predictive dialing systems are no longer always considered to violate the TCPA. Telemarketers should consult with an FTC defense lawyer to implement preventative compliance measures that evidence dialing equipment cannot presently be used to generate and dial random or sequential numbers.
Richard B. Newman is a telemarketing compliance lawyer at Hinch Newman LLP. Follow him on Facebook, Twitter and LinkedIn @FTC Investigation Attorney.
Informational purposes only. Not legal advice. Always seek the advice of an attorney. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.
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