Ever since the D.C. Circuit’s ruling six months ago in ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018), which invalidated the FCC’s interpretation of an Automatic Telephone Dialing System (“ATDS”), a consensus had been growing. Led by the Third Circuit in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018), many courts nationwide have found that the ACA opinion invalidates all of the FCC’s previous ATDS definitions and stands for the proposition that an ATDS is a system that uses a random or sequential number generator. But because things can never be that easy in the TCPA space, the Ninth Circuit created a circuit split last week with its decision in Marks v. Crunch San Diego, LLC, 2018 U.S. App. LEXIS 26883 (9th Cir. Sept. 20, 2018).
If you have seen members of the TCPA plaintiffs’ bar sweating a bit more than usual lately, it’s not just the summer heat—they’re probably concerned about the steady stream of positive cases for the defense bar over the past month. Since our last update, a considerable number of new TCPA decisions have come out, including several circuit level decisions. And while not every case discussed in this edition of the TCPA Case Law Review went the way of the defendants, a clear tendency this summer is for courts to rule against TCPA class action plaintiffs. Let’s hope this is one trend that continues after Labor Day.
On August 9, 2018, the United States District Court for the Northern District of Alabama agreed with the Second Circuit Court of Appeals decision in Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d (2d Cir. 2017), which held that contractual consent to be contacted by an automatic telephone dialing system (“ATDS”) could not (and cannot) be unilaterally revoked because the consent formed part of a bargained-for exchange in the contract. The Second Circuit’s ruling was favorable for companies seeking clarification on consent revocation issues that exist with respect to claims brought under the Telephone Consumer Protection Act (“TCPA”).
Overview of the Ruling
If you follow developments in TCPA case law, you’ve probably heard by now that the DC Circuit Court of Appeals last week overturned the 2015 FCC Order that had required TCPA opt-out notices on both solicited and unsolicited faxes. The court held that the FCC’s rule was “unlawful to the extent that it requires opt-out notices on solicited faxes.” See Bais Yaakov of Spring Valley v. FCC, et al., Case No. 14-1234 (D.C. Cir.). In fact, the DC Circuit—despite years of FCC guidance, 13 consolidated appeals and more than two dozen lawyers participating in the briefing—seemed to view this as a relatively simple issue of statutory construction: “The text of the Act provides a clear answer to the question presented in this case. . . . Congress drew a line in the text of the statute between unsolicited fax advertisements and solicited fax advertisements. Unsolicited fax advertisements must include an opt-out notice. But the Act does not require (or give the FCC authority to require) opt-out notices on solicited fax advertisements. It is the Judiciary’s job to respect the line drawn by Congress, not to redraw it as we might think best.”
Yet another court has found that consent in a TCPA case is an inherently individualized issue that precludes class certification. In Newhart v. Quicken Loans, Inc., 2016 U.S. Dist. LEXIS 168721 (S.D. Fla. Oct. 13, 2016), the plaintiff moved to certify a class of individuals who had received calls from defendant on their cellular telephones, allegedly in violation of the TCPA. The court denied class certification, finding that “resolving the consent issue will depend upon multiple layers of individualized evidence about each call and the circumstances that preceded it. Therefore, predominance is lacking.” Id. at *6. Importantly, the court did not need to decide “whether any class member actually consented.” Id.
Despite claims from the plaintiffs’ bar that the Supreme Court’s decision in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), did not significantly change the landscape for class actions, courts continue to rely on Spokeo to dismiss claims that have no concrete injury beyond a statutory violation. In the last month, two more cases — including one federal circuit-level decision and one TCPA decision — were dismissed because the plaintiff was unable to demonstrate Article III standing under Spokeo. These cases demonstrate the important role that Spokeo-related arguments can play in stymying class actions.