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If you are like me, your inbox is being inundated with blogs and articles on the recent, bombshell development in the case of Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. Sept. 20, 2018) (“Marks”). Some of the finest lawyers in the country are churning out their analysis, breaking down the procedural history and dissecting the Court’s opinion with the best of intentions; but what does it all mean? To help readers understand how Marks impacts their contact management strategy, consider the following takeaways:

1 – The Issue: In Marks, the question for the District Court was whether the defendant’s web-based marketing platform used to send promotional text messages to a list of stored telephone numbers was an automated telephone dialing system (ATDS) as that term is defined by the Telephone Consumer Protection Act (TCPA).

2 – Statutory Definition: To answer the question, the District Court examined the definition of ATDS as presented in the TCPA: “[E]quipment which has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(A)(1).

3 – District Court’s Interpretation of ATDS: In the opinion of the District Court, to meet the TCPA’s definition of an ATDS, the device must include a random or sequential number generator to store or produce numbers to be called. Since Crunch established its text platform did not have a random or sequential number generator, the Court ruled in the defendant’s favor. This was good news.

4 – Plaintiffs’ Appeal: Not surprisingly, the plaintiffs in this class action did not take kindly to the District Court’s decision and appealed to the wisdom of the 9th Circuit Court of Appeals. The plaintiffs argued the statute supports two definitions of an ATDS – one which supports the Court’s very narrow interpretation of an ATDS (i.e. a device with the capacity to generate random or sequential numbers and dial such numbers) and a second which includes a device that stores numbers to be called and dials such numbers. The 9th Circuit agreed. This was bad news – at least for the industry.

5 – 9th Circuit Rules for Plaintiffs: In contrast to the District Court’s interpretation, the 9th Circuit broadly interpreted the TCPA’s definition of ATDS to include devices with the capacity to dial stored numbers automatically. The 9th Circuit found that “the statutory definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.” Id. at 1043.

6 – Defendant Files for Supreme Court Review: Equally disgruntled, on January 28, 2019, Crunch San Diego, LLC, as petitioner, filed a petition for a writ of certiorari with the U.S. Supreme Court, asking the Court to review the 9th Circuit decision.

7 – Parties Settle: Shockingly, before the U.S. Supreme Court decided whether it would take the case on certiorari review, the parties settled. This was more bad news. This means the 9th Circuit’s broad interpretation of ATDS stands!

8 – 9th Circuit’s Decision Stands: The 9th Circuit has appellate jurisdiction over the district courts in the following districts: District of Alaska, District of Arizona, Central, Eastern, Northern and Southern Districts of California; District of Hawaii. The 9th Circuit’s decision in favor of the plaintiffs stands as the law of the land for these districts.

9 – Two Definitions of ATDS: This means the most prudent course of action for anyone dialing consumers located in the any one of these states using a device that stores telephone numbers to be called and automatically dials such numbers is to realize they are using an ATDS as that term is defined by the TCPA. 

10 – Sage Advice (but not legal advice):  Stay the course. Be proactive. Comply with Crunch even if when you are autodialing, texting, or leaving prerecorded messages on the mobile phones of consumers who live outside of the 9th.

  • Seek independent legal advice to ensure your policies, procedures and processes support compliance with Crunch.
  • Obtain and record the consumer’s consent before autodialing, texting, or leaving prerecorded messages on mobile phones.
  • Receive and record the consumer’s revocation of consent before autodialing, texting, or leaving prerecorded messages on mobile phones.
  • Treat any device which stores a list of numbers and dials such numbers to be an ATDS.
  • Do not assume a device which lacks the ability to generate random or sequential numbers is not an ATDS.
  • Dial responsibly. When in doubt, use your manual contact system.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

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Rozanne Andersen, J.D., serves as Ontario Systems’ Vice President and Chief Compliance Officer. She is responsible for leading Ontario Systems’ corporate efforts and response to the CFPB’s launch of compliance examinations in the ARM industry. Rozanne is a recognized thought leader in the area of compliance. Her advocacy work on behalf of the credit and collection industry has resulted in landmark legislation and regulation at both the state level and at the federal level with regard to the FDCPA, FCRA and HIPAA.
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