A New TCPA King?: Second Circuit Rejects “Potential Capacity” Definition Outright But Ducks Issues of ATDS Functionality

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In the second Court of Appeal decision to reach the TCPA’s definition of ATDS this week, the Second Circuit Court of Appeal held today in King v. Time Warner Cable, Case No. 15-2474-c, 2018 U.S. App. LEXIS 17880 (2nd Cir. 2018) that the TCPA governs only calls made by devices with the current “capacity” to perform the functions of an ATDS. Yet the Court refused to identify just what those required functionalities actually are.

Setting up the analysis, the district court had relied upon the FCC’s now-defunct TCPA Omnibus ruling in determining that the device Time Warner used to make the challenged calls had the “potential capacity”–whatever that means–to randomly or sequentially generate numbers and dial them. The district court granted summary judgment to the Plaintiff on that basis and Time Warner appealed challenging that its device lacked the present capacity to place calls in random or sequential fashion.

The Second Circuit panel begins its analysis of the appeal by finding that the ACA Int’l opinion overruled the Omnibus ruling relied upon by the district court and that the ACA Int’l opinion was binding on it and all other circuit courts of appeal and district courts under the Hobbs Act on that issue: “challenges to the 2015 Order were assigned to the D.C. Circuit, which thereby became ‘the sole forum for addressing . . . the validity of the FCC’s’ order.” King at *9. Thus the King court rejects the district court’s application of the FCC’s Omnibus ruling to the dispute before it and “must decide independently” what the required “capacity” is under the TCPA.

In addressing that issue the King Court holds that the “term ‘capacity’ is best understood to refer to the functions a device is currently able to perform, whether or not those functions were actually in use for the offending call, rather than to devices that would have that ability only after modifications.” King at *10-11.

To get there the Court starts with the words of the statute and opens several dictionaries to see what the word “capacity” actually means. After concluding that was a waste of time–all words are ultimately ambiguous (or lies as Nietzsche would urge) and the word “capacity” has multiple meanings–the panel falls back on common sense:  “Common sense suggests that legislation, which typically targets present social problems, would be aimed at devices that have the ‘capacity’…  to cause the problem that is the subject of legislative concern, rather than addressing itself to the hazily defined universe of things that have only a theoretical potential to do so.” Based on the “plain meaning” of the text, therefore, the King court determines to adopt a “narrower definition” than the one proposed by the FCC in the Omnibus. Id. at *14.

The King court hewed closely to the D.C. Circuit’s analysis of “capacity” and drew several nuggets from the ACA Int’l opinion noting it: “correctly dr[ew] a distinction between a device that currently has features that enable it to perform the functions of an autodialer whether or not those features are actually in use during the offending call – and a device that can perform those functions only if additional features are added.” King at *16. The panel found that distinction “persuasive” and concluded “that the former category of devices falls within the definition of an ATDS, and the latter does not.” Id.

The King case is not all good news for callers, however. It appears to reject the D.C. Circuit Court of Appeal’s suggestion that a call is only subject to the TCPA if the automated capacity of an ATDS is actually used to make the subject call: “The legislative history thus confirms…that the TCPA applies to calls from a device that can perform the functions of an autodialer, regardless of whether it has actually done so in a particular case.” King at *19. And, in King’s view, ATDS calls include calls made by a device “whose autodialing features can be activated, as the D.C. Circuit suggested, by the equivalent of ‘the simple flipping of a switch.'” King at *22.

And then there is the big punt. While the Third Circuit in Dominguez II played coy for a while but eventually opened up on its feelings regarding the required ATDS functionalities, the Second Circuit never quite got comfortable discussing the issue.  Noting that the district court had relied on the FCC’s Omnibus ruling in determining that a device’s “potential” capacity were at issue–and had not made any findings regarding the current functionalities of Time Warner’s device–the Second Circuit refused to address the issue of what “functionalities” are required in the first instance. Frustratingly, therefore, the Court expressly refuses to decide whether or not random and sequential number generation is a required functionality of an ATDS and “leave[s] it to the district court to address the [issue] in the first instance.” King at *24. Booooo.

So the tally for the week: four ATDS cases decided, one requiring random or sequential number generation (Dominguez II), one holding that the FCC’s predictive dialer rulings are defunct but refusing to decide whether a dialer is or is not an ATDS (Sessions), one holding that the FCC’s predictive dialer rulings are still viable (case that shall not be named), and now King holding that capacity means “present” capacity, but the capacity to do what?  Welcome to TCPAland. We hope you stay a while.