2018 brought us a flurry of inconsistent ATDS decision, and it looks like 2019 will be no different. The good news, for now, is that we will be starting the New Year with a big win, as the Northern District of Iowa just held that: (1) ACA Int’l overturned the 2003 and 2008 Predictive Dialer Rulings; and (2) a dialer must generate numbers randomly or sequentially to constitute an ATDS. Happy New Years to us!
In Harbach v. Usaa Fed. Sav. Bank, No. 15-CV-2098-CJW-KEM, 2019 U.S. Dist. LEXIS 3687 (N.D. Iowa Jan. 9, 2019), the court considered cross motions for summary judgment and granted Defendant’s motion on grounds that the equipment used to dial Plaintiff’s telephone number did not fall within the definition of an ATDS.
In determining whether Defendant’s equipment constituted an ATDS, the court began its analysis by addressing whether the FCC’s 2003 and 2008 Predictive Dialer Rulings were binding on the court. Plaintiff argued that ACA Int’l left the 2003 Order and 2008 Declaratory Ruling intact, thereby qualifying all predictive dialers as an ATDS. Defendant, on the other hand, argued that ACA Int’l vacated the 2015 Declaratory Ruling’s definition of an ATDS, and in so doing, invalidated the FCC's “materially identical interpretation” of the term ATDS in the 2003 and 2008 Rulings.
The court accepted Defendant’s argument and held that ACA Int’l overruled not only the FCC's 2015 Declaratory Ruling, but also the FCC's 2003 Order and 2008 Declaratory Ruling. In support of its holding, the court noted that ACA Int’l overruled the FCC’s 2015 Declaratory Ruling on grounds that the FCC’s reasoning had “fatal inconsistencies” with regards to what qualities a device must have to qualify as an ATDS. As such, ACA Int’l’s concerns with the 2015 Declaratory Ruling “appli[ed] with equal force” to the 2003 and 2008 Rulings because the 2003 and 2008 Rulings are equally as flawed.
After finding that the FCC’s prior rulings are not binding, the court then turned its attention to whether predictive dialers meet the statutory definition of an ATDS. It concluded, after a thorough and well-reasoned analysis, that predictive dialers that call from a list do not constitute an ATDS.
In support of its holding, the court logically turned to the plain language of the statute and found that the adverbial phrase "using a random or sequential number generator" modifies both "produce" and "store." As such, the court determined that a device meets the definition of an ATDS only when it is capable of randomly or sequentially producing, or randomly or sequentially storing telephone numbers. Notably, the court expressly refused to follow the Ninth Circuit’s decision in Marks, that dialers that call automatically from a list constitute an ATDS, on the basis that the decision is “erroneous as a matter of statutory construction.” Based on its findings, the court ultimately granted Defendant’s motion for summary judgment and held that that Defendant’s Aspect Dialer was not an ATDS because it was not capable of using a random number generator to generate calls.
Harbach turned out to be huge win to kick off 2019 and hopefully a sign of more favorable ATDS decisions to come in the new year.