Marks Rejected By Pennsylvania Federal Court: A Predictive Dialer Is Not Per Se An ATDS In The Third Circuit

black queen chess piece

Well, TCPAWorld, the Keystone State has again opined on the issue of predictive dialers – this time, however, by faithfully following circuit precedent. In Smith v. Navient Solutions, LLC, 2019 U.S. Dist. LEXIS 131231 (W.D. Pa. Aug. 4, 2019), the Western District of Pennsylvania held that, under the Third Circuit’s decision in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018), a “predictive dialer” is not per se an ATDS under the TCPA – creating further tension with the 9th Circuit’s Marks decision.

In Smith, Navient utilized the “ININ telephony platform” to place calls to a student loan debtor’s cell phone related to the debtor’s default. At summary judgment, the court found that the ININ system “utilizes three different modes—‘preview,’ ‘predictive,’ and ‘agentless’—when it places calls to consumers.” The court found that “preview mode” requires “a Navient agent [to] take some ‘human action’ to place calls to consumers,” such as “review[ing] customer information from a database and choos[ing] which customers to call;” whereas, in the “predictive” and “agentless” modes, “the ININ system can initiate a call to a consumer without a Navient agent taking action to place the call.”

Based on the evidence, the court found that “[t]he ININ system does not have the capacity to randomly generate telephone numbers to be called” nor does it “have the capacity to generate sequential lists of telephone numbers.” (Emphasis added). “Rather, the telephone numbers that the ININ system dials are uploaded from a database containing Navient’s customer information.” According to the Smith court, the above-discussed facts about the ININ system were dispositive of the ATDS issue.

Specifically, the court surveyed the FCC’s 2003, 2008, and 2015 orders and determined that, “from these three sets of guidance, it is difficult to discern whether a predictive dialer or a device that utilizes predictive-dialing software” constitutes an ATDS under the TCPA. The court went on to explore the D.C. Circuit’s ACA decision, concluding that the Third Circuit has “followed” ACA and “rejected the FCC’s guidance on the definition of ATDS” in its Dominguez opinion – thus, seeming to reject any arguable controlling or persuasive value contained in the prior FCC decisions. In fact, in its third footnote, the Smith court specifically stated: “The Court agrees that the ACA International decision explicitly invalidated the FCC’s 2015 guidance, and by implication the 2003 and 2008 guidance.”

Thus, according to the Smith court, per ACA and the Dominguez decision, “courts must interpret [an] ATDS to mean a system that has ‘the present capacity to function as an autodialer[,]’” and went on to note that this language has been interpreted to require “that [the] device must [itself] be able to generate random or sequential numbers in order to qualify as an ATDS.”

Based on this analysis, the Smith court held that, “under the plain language of the [TCPA] statute,” “a predictive dialer may constitute an ATDS but that, consistent with Dominguez, the predictive dialer must have the capacity to generate numbers randomly or sequentially and then call them.” (Emphasis added). The court then correctly found that “[p]redictive dialers do not necessarily generate numbers to be called” and “predictive dialers do not necessarily have the capacity to randomly or sequentially generate numbers to be called.” (Emphasis in original). Though the Smith court’s interpretation of Dominguez leaves open the possibility that “predictive dialers may be ATDSs where some feature of the software enables them to randomly or sequentially generate numbers to be called,” the court went on to quickly eschew that exception for a more bright line test for predictive dialers:

[W]here a predictive dialer merely calls consumer numbers from a list that is separately created and uploaded onto the software, the predictive dialer itself is not generating any numbers to be called. In that situation, the predictive dialer is not an ATDS . . . . [A] predictive-dialing device is [also] not an ATDS merely because it calls consumers from a preprogrammed list of numbers that was inputted into the device. Rather, the device itself must have the capacity to generate numbers.

That’s big, folks. And is a direct rebuke of Marks and other district court decisions from the Third Circuit which seemed to go against Dominguez and in favor of Marks. Specifically, see the Ruby v. Dish Network, 2019 U.S. Dist. LEXIS 62472 (E.D. Pa. March 25, 2019), decision, reported on by the Czar here.

Based on this analysis, the court granted summary judgment to Navient on the ATDS issue because, simply, “a device does not qualify as an ATDS under Third Circuit precedent merely because it utilizes predictive dialing” and “the ININ system cannot be an ATDS because it does not generate, either randomly or sequentially, numbers to be called” and “there is no evidence that the ININ system has . . . the present capacity to randomly or sequentially generate numbers to be called.” (Emphasis in original).

So, there you have it folks. Per Smith, under the Third Circuit’s Dominguez decision, a predictive dialer is not per se an ATDS under the statutory language of the TCPA. This creates more tension with Marks, and seems to halt the creeping influence of that decision in the Third Circuit, which the Ruby decision (mentioned above) appeared to bring into question. However, the Smith and Ruby decisions have created an intra-circuit split on the issue, which the Third Circuit may have to resolve in the future. Importantly, the Smith decision is also in line with the Northern District of Texas’s recent Adams decision, which the Archduke just reported to TCPAWorld here.

The fight over what constitutes an ATDS continues throughout the country and you can count on us at TCPAWorld to keep you on top of all important developments. Stay tuned.

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