Court Finds Predictive Dialers Not Covered by the TCPA– Contrary to Earlier Rulings by Different Judge In Same Court

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As courts continue to address the definition of automated telephone dialing system (“ATDS”) within the Telephone Consumer Protection Act (“TCPA”) it was only a matter of time before we started seeing intra-district splits.  Last Friday, in a ruling deeply overshadowed by the Marks ruling,  the Hon. Kevin McNulty issued a ruling in the District New Jersey that is deeply and directly at odds with two earlier decisions entered by the Hon. Jerome B. Simandle of that same district. See the Grand Duchess’ article on those cases here.  The case is Fleming v. Associated Credit Servs., Civ. No. 16-3382 (KM) (MAH), 2018 U.S. Lexis 163120 (D. N.J. Sept. 21, 2018) and it marks the first time a predictive dialer has been squarely held to not be an ATDS subject to the TCPA in New Jersey.

The Fleming ruling actually tracks Pinkus quite closely. Before it can do so, however, the court first must deal with the impact of Dominguez— a case that seemingly required fidelity to the TCPA’s statutory definition, but maybe not. Indeed, Judge Simandle has twice held, in essence, that Dominguez actually compels fidelity to the FCC’s 2003 and 2008 Predictive Dialer Rulings and not to the statute’s mandate of random or sequential number generation. The Fleming court, however, quickly determined that Dominguez did not address the issue of whether the 2003 and 2008 Predictive Dialer Rulings remain viable at all. See Felming at * 20 (“The Third Circuit did not really deal with it [the viability of the FCC’s earlier Orders] at all.”) As such it found itself a blank slate to write upon, and write it did.

After noting the inconsistency of district court opinions on the matter, the Fleming court aligned itself with Pinkus and holds directly that the 2003 and 2008 Rulings were, in fact, overruled by ACA Int’l:

While recognizing the disparate views in the case law, I am convinced by the reasoning in Pinkus and similar decisions. I hold that when the D.C. Circuit vacated the 2015 FCC Declaratory Ruling it also necessarily set aside the parts of the previous 2003 and 2008 FCC Orders that ruled that a predictive dialer was impermissible under the TCPA.

Fleming at *22

As the Fleming court sees the matter–in a thoughtful analysis that I am truncating badly– ACA Int’l is “permeated with the notion that the 2015 Ruling is an elaboration of the earlier 2003 and 2008 Orders, and that the appeal of the 2015 Ruling may encompass its reaffirmation of the earlier Orders, even though those Orders had not themselves been appealed.”  Fleming at *24. As such, the court expressly adopts the holding of Pinkus and determines: “ACA Int’l necessarily invalidated the 2003 Order and 2008 Declaratory Ruling insofar as they provide, as did the 2015 Declaratory Ruling, that a predictive dialer qualifies as an ATDS even if it does not have the capacity to generate phone numbers randomly or sequentially and then to dial them.” Fleming at *25-26.

So far so good. But after the walloping Marks just gave TCPAland after likewise determining that the 2003 and 2008 Orders were overruled by ACA Int’l, the match is far from over.  Luckily for defendants, however, the Court reads the statutory language for what it says and does not try to re-write it as some would suggest Marks did:

Does a system that dials numbers from a list that was not randomly or sequentially generated when the list was created qualify as an ATDS? With only the statutory text to guide me, I am convinced that the answer is no.

Fleming at * 26.

The Court’s analysis is actually refreshingly straightforward. First, the court states its decision that “[t]he phrase “using a random or sequential number generator,” I believe, applies to the manner in which the numbers make their way onto the list—not to the manner in which the numbers are dialed once they are on the list.” Fleming at 26. This is an important call back to Judge Simandle’s contrary rulings in which that court determined that dialing numbers sequentially or randomly from a list was sufficient to meet the statutory definition. Notably, however, the Fleming court does not expressly call out Judge Simandle’s earlier rulings or specifically distinguish either of them. Classy move.

After reviewing the evidence and determining, not surprisingly, that there was no evidence the numbers called were randomly or sequentially generated, the court concludes that Defendant is entitled to summary judgment:

I therefore find that ACS’s LiveVox HCI system, as presented in this case, is merely a predictive dialer and not an ATDS under the TCPA.

Fleming at *29.

How sweet is that?

It is important to note, however, that the LiveVox product at issue in Fleming was not actually a predictive dialer at all. Instead it was the LiveVox HCI product, which TCPAland dwellers will recognize has been commonly and repeatedly upheld as a “manual” dialing application, rather than as a predictive dialer. That said, the core of the ruling remains deeply pertinent to users of true predictive dialers– the “mere” use of such a dialer does not trigger TCPA coverage; at least not in the eyes of the Fleming court.

Also, in an added bonus unrelated to ATDS issues, an important component of the ruling that is likely to be overlooked is the court’s focus on receipt of messages as a predicate for Article III standing. See Fleming at *13.  There is a pretty serious split of authority as to whether or not a call is actionable even if it does not actually ring through. See, for the Defense perspective, Watkins, 2017 U.S. Dist. LEXIS 84503, at *8 n.2 (Plaintiff may only recover damages for calls that “he, and not an answering machine, answered”); Juarez v. Citibank, N.A., No. 16-cv-01984, 2016 U.S. Dist. LEXIS 118483, at *7 (N.D. Cal. Sept. 1, 2016) (a violation of the TCPA “[does not] necessarily give rise to Article III standing–for example calls made to a neglected phone that go unnoticed or calls that are dropped before they connect may violate the TCPA but not cause any concrete injury”); Lemieux v. Lender Processing Center, No. 16-cv-1859-BAS(DHB), 2017 U.S. Dist. LEXIS 47139, at *11 (S.D. Cal. Mar. 29, 2017) (agreeing that “a bare allegation of a violation of the TCPA could be an insufficient allegation of injury to establish standing, such as when a telephone call is unheard or unanswered … .”).  Fleming appears to join this “calls must be received to afford standing camp.”

Fleming is a fun ruling that seems to properly apply the TCPA’s statutory definition of ATDS and also, properly, holds that ACA Int’l reversed the FCC’s handiwork in 2003 and 2008. It also treats Dominguez as agnostic on the issue of whether the 2003 and 2008 Predictive Dialer rulings remain viable, which is probably an accurate assessment. Notably, however, the court does not address Marks, which was handed down only the day before the decision. And with a solid split of authority within the D. NJ, it remains to be seen what line of cases future rulings within that district will follow. Always fun.

NOTE: I made a few edits to this article a the behest of LiveVox. Specifically, although the Court found that LiveVox’ product was a predictive dialer, it was actually LiveVox’s HCI product that was at issue in the case.

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