Court Finds ATDS Allegations Survive Pleading Stage With a Nod Toward Need for FCC Guidance

As we wrote a while back, the time is now for courts to defer to the FCC on the definition of ATDS within the TCPA. With a nearly-year-long Public Notice proceeding winding to a close there is no reason for courts to continue to wade into the murky unsettled depths of statutory interpretation. Indeed, as the courts have proven categorically incapable of coming to a consensus on a proper reading of the statute there seems to be little incentive for individual judges to continue to play a game of pin the tail on the donkey with this statute. The proper course, of course, is for Defendants to seek stays of these actions under the primary jurisdiction doctrine and for courts to grant such stays to allow the FCC to act and define ATDS with a little much-needed clarity. This concern is all the greater following the Fourth Circuit Court of Appeals recognition that the TCPA is an unconstitutional restriction on speech that only survives First Amendment review with one of its limbs severed—surely courts should tread extra carefully here to assure statutory clarity and prevent protected speech from being unnecessarily chilled.

One recent decision seems to recognize the need for guidance from above, while yet venturing into the depths below.  In Melvin v. Ocwen Loan Servicing LLC, Case No: 8:18-cv-1911-T-36SPF, 2019 U.S. Dist. LEXIS 74995 (M.D. Fl. May 3, 2019) the Defendant sought a third decision on the issue of whether or not its dialer qualified as an ATDS. Highlighting just how uncertain TCPAWorld is, in two prior decisions the reviewing courts had split on whether or not the equipment was an ATDS—meaning that the same Defendant using the same equipment was found potentially liable in one federal court, and found blameless in another. What a mess.

Well, perhaps hoping to break the tie, the Defendant again sought dismissal of a TCPA case accusing it of using an ATDS. With the case at the pleadings stage, however, the court was confined to accept the pleaded facts as true. After a lengthy recitation of the background on the FCC’s expansion of the ATDS definition in 2003 and 2008, followed by the ambiguous result in ACA Int’l, the Court determined that decisions in the Eleventh Circuit have “generally adopted the position that ACA voided and vacated the 2003 and 2008 FCC Orders’ interpretation of the statutory meaning of an ATDS.” Melvin at * 8. But, following the approach of an earlier decision involving this same defendant, the Court determined that vague allegations regarding encountering a period of silence upon answering a call was sufficient to allege ATDS usage. In the Court’s words: “ Melvin alleged that… he heard silence and a clicking sound once he answered the phones, which may suggest the use of an ATDS.” End of analysis.

The Court also reached the rather non-controversial conclusion that the TCPA applies to debt collection calls. While the statute does not, as a practical matter, apply to the equipment used by most debt collectors—rarely are they randomly or sequentially dialing folks to collect debts—it most assuredly would apply to such calls if a collector stooped so low. Presumably Defendant was driving at a larger point connecting the dialer equipment covered by the statute with the Congressional intent to limit telemarketing calls, but the argument comes off a bit flat in the opinion.

Setting all of that aside, however, the critical piece of the opinion is the seeming reluctance with which the Court addressed these issues. As the Court states: “Ultimately the district courts must grapple with this question [of the definition of ATDS] until they receive further guidance from the FCC, the D.C. Circuit, or their respective circuit courts of appeals.”

You can almost imagine the court issuing a heavy side as it recites those words. And the sentiment is quite appropriate. Why should the district courts be left to grapple with these impossible issues—which are ultimately a matter of policy line-drawing—when the FCC has the issue before it to resolve the matter once and for all (and possibly with a compromise position.)

Ultimately, and perhaps unsurprisingly, the court punts on the critical issue of ATDS functionality deeming mere allegations of hearing a period of silence before calls commenced as sufficient. The Defendant will get another crack at the issue at the summary judgment stage—this time, perhaps, with some additional guidance for the court to consider.

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