Marks Stopper: Iowa District Court Rejects Ninth Circuit’s “Overly Broad” ATDS Definition

Sometimes it takes courage to do the right thing.

In Harbach v. Usaa Fed. Sav. Bank, Case No. 15-CV-2098-CJW-KEM, 2019 U.S. Dist. LEXIS 3687 (N.D. Iowa  Jan. 9, 2019) the district court took the Ninth Circuit’s Marks opinion head on and obliterated it with brilliant legal reasoning.

The Harbach analysis tracks closely to Pinkus concluding first that the ACA Int’l decision set aside the 2003 and 2008 FCC formulations that treated predictive dialers lacking the ability to randomly or sequentially generate numbers as subject to the TCPA, and next that the absence of proof that a dialer can actually randomly or sequentially generate numbers to be dialed justifies judgment in favor of a defendant. The Court closely analyzed the statutory ATDS definition—re-introducing all of us to Eighth-grade grammar lessons regarding adverbial phrase usage that we promptly forgot—and concluded that the only reasonable reading of the TCPA requires random and sequential number generation. As the Court puts it:

This Court disagrees with the Ninth Circuit Court of Appeals’ interpretation that a device, to be considered an ATDS, must be capable of ‘dial[ing] [numbers generated using a random or sequential number generator] automatically.’ Marks v. Crunch SanDiego, LLC, 904 F.3d 1041, 1053 (9th Cir. 2018). As the D.C. Circuit recognized, to place a telephone call, numbers must necessarily ‘be called in some order-either in a random or some other sequence.’ ACA Int’l, 885 F.3d at 702 (emphasis in original)

So there.

Harbach is actually a really important case and one any TCPA practitioner should read carefully. It joins Roark as the only post-Marks decisions to expressly reject the Ninth Circuit’s broad dialer formulation as applied to predictive dialers. It also holds—similar to Keyes – that the Aspect predictive dialer is not an ATDS.

As an added bonus, Harbach also address a Reyes/Barton argument reaching the important (but rather obvious) conclusion that “as a matter of law, parties may, by mutual agreement, limit the means by which a consumer can withdraw consent to be called on the telephone, so long as the means contracted to are reasonable.” Harbach at * 52.  That’s rather neat and tidy. But the Court giveth and it taketh away concluding that a blanket consent clause lacking a revocation provision is revocable: “The Court agrees with plaintiff that the Second Circuit Court of Appeals went too far in Reyes when it concluded that a company could effectively defeat the TCPA by including a contractual provision barring a consumer from ever withdrawing consent.” Harbach at *53. Eesh.

The Court goes on to conclude that a clause reading “[t]o revoke this authorization, you may edit your profile by removing telephone numbers on which you do not want to receive such calls” is permissive in nature—again the reader will delight in a grammar lesson as the court parses the rules regarding when the word “may” is permissive vs mandatory—affording a consumer a non-exclusive means by which consent can be revoked. Thus, the Plaintiff was permitted to revoke consent orally (although there was a question of fact as to whether or not that happened.) While the Harbach defendant is likely confused as to why the Court even addressed the Barton issue after determining it was entitled to summary judgment on the ATDS issue, TCPAWorld can delight in the rather dense analysis the Court affords the one-line agreement.

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.