No Way Around It: Another ATDS Ruling in the Ninth Circuit Footprint Follows Marks

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We know it has to happen, but it still hurts every time a district court in the Ninth Circuit follows Marks. 

Here’s a quick report on the Hon. Cathy Ann Bencivengo’s latest TCPA ruling involving ATDS issues that came down yesterday. You might recall that Judge Bencivengo rather famously decided the Romero and Ewing decisions that determined call recipients lack Article III standing to assert TCPA claims in federal court unless they suffered some harm specific to the use of an autodialer. The reasoning in those cases was later rejected by the Ninth Circuit court of appeal but the point is that Judge Bencivengo is no stranger to big TCPA rulings.

As fortune would have it, she also ended up being the first judge within the Ninth Circuit to rule on an ATDS challenge following the big Marks decision last year. Her first pass on the issue was in a case called Keifer v. Hosopo Corp., Case No. 3:18-cv-1353, 2018 U.S. Dist. Lexis 183468 (S.D. Cal. Oct. 25, 2018) wherein she found—unsurprisingly—that Marks was binding on her and that under Marks “an ATDS need not create or develop the numbers dialed on its own.” Keifer at *10. She went on to conclude, rather roughly, that the dialer used to place the calls in that case certainly stored and dialed numbers based upon “judicial experience and common sense.” Keifer at *10.  I wrote all about it here.

Well, yesterday Judge Bencivengo got her second crack at the issue and the results were more or less the same. In Ewing v. Encor Solar, Case No. 18-cv-2247, 2019 WL 277386 (S.D. Cal. Jan. 22, 2019) the Court faced a motion to dismiss a complaint challenging both ATDS and vicarious liability allegations. As to the ATDS issue, the Complaint alleged merely that “the calls frequently exhibited signs associated with calls made from ATDs including repeated calls ‘within a period of time and the presence of a pause or click.’”  As was in the case in Keifer, the Ewing Court noted that Plaintiff does not “specifically set forth allegations that are sufficient on their own to support his claims that an ATDS was used”—that seems promising– but the Court, nonetheless, “accepts as true the factual allegations of the FAC, applies the definition of an ATDS provided by the Ninth Circuit in Marks v. Crunch of San Diego, 904 F.3d 1041, 1052 (9th Cir. Sept. 20, 2018)6 , and draw[s] on [the] Court’s judicial experience and common sense” to determine that the allegations of the Complaint are sufficient to demonstrate ATDS usage. *Insert foghorn sound.*

As I have previously observed: “Judge Bencivengo is certainly no fan of TCPA claims and the fact that even she swiftly applied Marks and rejected the Defendant’s 12(b)(6) motion should serve as clear notice to defendant’s contemplating similar motions in the Ninth Circuit’s footprint: don’t try it.”

Although the ATDS component is the lead story, the vicarious liability component of Ewing is important too and probably a bit more helpful. The Court held directly that the Plaintiff was responsible for clearly articulating what role each of the various defendants played in launching the calls at issue. More importantly, the Court concluded that the mere allegation of a right to control conduct of a caller is not enough, in a vacuum, to allege facts plausibly demonstrating agency—“Plaintiff has failed to plead any facts in support of his conclusory allegations that Encor exercised any control over the other defendants allegedly making the calls to Ewing to establish an agency relationship between them and Encor.” Ewing at * 7. That’s dynamite stuff even if a little out of conformity with the weight of authority in this area. The Court goes on to grant the motion to dismiss on this ground and requires the Plaintiff to re-allege the complaint properly asserting the role each Defendant played with respect to launching the challenged calls and asserting clear facts demonstrating agency.

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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.

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