The Ninth Circuit Court of Appeals issued its decision in Marks v. Crunch San Diego, LLC. The case involves a Telephone Consumer Protection Act (TCPA) claim and it is the first time the Ninth Circuit considered a TCPA claim after the D.C. Circuit’s ACA International decision. A central issue was the definition of an automatic telephone dialing system (ATDS) The statutory definition of 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.” The parties’ argument, and the Court’s decision centered on whether the phrase “using a random or sequential number generator” modified both “store” and “produce” or only the word “produce.”
The Ninth Circuit wrote, “Accordingly, we read § 227(a)(1) to provide that the term automatic telephone dialing system means equipment which has the capacity – (1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator – and to dial such numbers (even if the system must be turned on or triggered by a person).” Thus, according to the Ninth Circuit, an ATDS includes devices that have the capacity to store numbers to be called and to dial such numbers.
The Ninth Circuit’s decision ignores central concerns held by now-FCC Chairman Ajit Pai and the D.C. Circuit who were both concerned that the FCC’s 2015 Omnibus Order was so broad, it would include most smartphones with only a few modifications to its software. Indeed, that was part of the D.C. Circuit’s reasoning when it set aside the FCC’s treatment of the definition of an ATDS. However, the Ninth Circuit’s opinion is even more expansive. Now, any smartphone in the Ninth Circuit is an ATDS because it can store numbers and dial them, and if smartphones qualify under the Ninth Circuit’s new definition, the dialing equipment used by the industry in the Ninth Circuit just became an ATDS.
The silver lining is that the Ninth Circuit’s decision creates a split in the circuits. Both the Second and Third Circuits issued decisions in June holding that a device needed to have the current capability to dial randomly – or sequentially – generated phone numbers to qualify as an ATDS. This split could set up an appeal to the United States Supreme Court. However, it is more likely that the FCC will issue a new order addressing this issue before then. In the meantime, TCPA litigation just became much more plaintiff-friendly.