Jul 25

What “Capacity?” The Post-ACA International v. FCC Landscape

What “Capacity?” The Post-<em>ACA International v. FCC</em> Landscape

Amanda N. Griffith, Esq.

What constitutes an automatic telephone dialing system [“ATDS”] under the federal Telephone Consumer Protection Act [“TCPA”]? As statutorily defined, 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.” 47 U.S.C. §227(a)(1) (emphasis added).
But, does this statutory definition include a dialing platform which dials off a pre-inputted list? If it lacks the current capacity to randomly or sequentially generate and call numbers, what if the technology can be modified to do so? How much modification would be needed? What degree of human intervention is required to take a dialing platform outside the definition of an ATDS? All eyes were on the U.S. Court of Appeals, D.C. Circuit and its decision in ACA International v. FCC, 885 F.3d. 687 (D.C. Cir. 2018), to answer these questions in light of the FCC’s 2015 Declaratory Ruling. (1). The court did not disappoint.
In its March 2018 ruling, the court set aside the FCC’s 2015 Declaratory Ruling with respect to the type of equipment that falls within the TCPA’s restrictions. (2) In doing so, the court found that the FCC exceeded its authority by interpreting the term “capacity” to include any latent or potential capacity through some unspecified software modifications. It should be noted that irrespective of a small minority of district courts in the Ninth Circuit, the decision in ACA Intl. should be binding on all courts by the doctrine of primary jurisdiction. See 28 U.S.C. §2342(1); Peck v. Cingular Wireless, LLC, 535 F.3d. 1053, 1057 (9th Cir. 2008).
While invalidating a portion of the FCC’s 2015 Declaratory Ruling, the court left intact the statutory definition of an ATDS which requires that the equipment use a “random or sequential number generator” [or at least have the flip-the-switch capacity to do so].

Consequently, the question whether equipment has the ‘capacity’ to perform the functions of an ATDS ultimately turns less on labels such as ‘present’ and ‘potential’ and more on considerations such as how much is required to enable the device to function as an autodialer; does it require essentially a top-to-bottom reconstruction of the equipment?

Now, the question for the circuit courts to decide is “how much” “capacity” is required for a dialing platform to constitute an ATDS. As recently as June 26 and 29, 2018, the Second and Third Circuit Courts of Appeal have sought to rectify what ACA Intl. left open.
In Dominguez v. Yahoo, Inc., 2018 U.S. App. LEXIS 17436 (3rd Cir. 2018), the Third Circuit found that Yahoo did not violate the TCPA by sending text messages to a re-assigned number because the software platform utilized did not have the present capacity to generate random or sequential telephone numbers.
Three days later, the Second Circuit issued its ruling in King v. Time Warner Cable, Inc., 2018 U.S. App. LEXIS 17880 (2nd Cir. 2018). While ostensibly punting the issue of random or sequential number generation, the Second Circuit remanded the case to the district court to decide whether Time Warner Cable’s dialing platform was an ATDS within the meaning of the ACA Intl. decision. In doing so, the Second Circuit defined “capacity” as follows:

In sum, we conclude that the term ‘capacity’ in the TCPA’s definition of a qualifying autodialer should be interpreted to refer to a device’s current functions, absent any modifications to the device’s hardware or software. That definition does not include every smartphone or computer that might be turned into an autodialer if properly reprogrammed, but does include devices whose autodialing feature can be activated, as the D.C. Circuit suggested, by the equivalent of ‘the simple flipping of a switch’.

Accordingly, there appears to be a trend among the circuits to define capacity as the “present” ability to randomly or sequentially generate and dial numbers – or a simple flip-the-switch to do so. See also Herrick v. GoDaddy.com, LLC, 2018 U.S. Dist. LEXIS 83744 at *19-20 (D.AZ. 2018); Marshall v. CBE Group, Inc., 2018 U.S. Dist. LEXIS 55223 at *17 (D. NV. 2018) (“Plaintiff cannot rely on the FCC’s definition of an ATDS to the extent it includes systems that cannot be programmed to dial random or sequential numbers, as is the case with some predictive dialers.”). Perhaps long gone are the days of having to analyze the process of how dialing platforms can be hypothetically re-programmed to meet the definition of an ATDS. But, until then, businesses that use dialing platforms can expect to see further litigation as to what qualifies as an ATDS. We await the Ninth Circuit’s decision in Marks v. Crunch San Diego, LLC, Case No. 14-cv-00348-BAS-BLM to further resolve [or confuse] the TCPA landscape.