Cross-Fire: First Lower Court Within Third Circuit Squarely Holds TCPA ATDS Opinion in Dominguez Requires Random or Sequential Number Generation, But Only After Another Lower Court Within the Same Circuit Says it Doesn’t

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Thus far, lower courts within the Third Circuit have been all over the place in addressing the issue of ATDS functionality post-ACA Int’l, and the meaning of the Third Circuit’s opinion in Dominguez v. Yahoo!.

Back in August, a New Jersey District Court twice ruled in two different cases that Dominguez actually held the 2003 and 2008 FCC predictive dialer rulings remained valid after ACA Int’l because the court in Dominguez said it would interpret the TCPA “as we did prior to the issuance of the 2015 Order.”  And just last week, another court within the District of New Jersey followed this same line of reasoning in holding that the 2003 and 2008 rulings remain valid because that is somehow what the Third Circuit said in DominguezWilson v. Quest Diagnostics Inc., No. 2:18-11960, 2018 U.S. Dist. LEXIS 212023, at *7 (D.N.J. Dec. 10, 2018).

Then in September, another New Jersey District Court—while ultimately holding predictive dialers are no longer covered by the TCPA—found that Dominguez did not address the validity of the 2003 or 2008 orders, or “deal with” the interpretation of the statutory definition of ATDS.

But we now have the first lower court within the Third Circuit to squarely read the Third Circuit’s opinion in Dominguez v. Yahoo! to mean that:

[T]o qualify as an ATDS, calling equipment must have the capacity to generate numbers using a random or sequential number generator and then call those numbers.

Richardson v. Verde Energy United States, No. 15-6325, 2018 U.S. Dist. LEXIS 212558, at *22 (E.D. Pa. Dec. 14, 2018).

This is exactly what we’ve been saying since Dominguez came out.  So let’s break down how the court got to the correct reading of the Third Circuit’s opinion.

Starting with the question of the validity of the 2003 and 2008 rulings, the Richardson court recognized that courts have gone different ways on the issue.  But after a “careful parsing,” of ACA Int’l the court found that “the invalidation of the 2015 Order necessarily invalidated the 2003 and 2008 Orders as well,” as each of these orders had the same inconsistencies that led to the invalidation of the 2015 order.

Turning then to the interpretation of the statutory definition of ATDS, the court again recognized there’s been inconsistent interpretations by the courts—and it really came down to the Ninth Circuit’s expansive interpretation in Marks versus the Third Circuit’s interpretation in Dominguez.  But since the court was within the Third Circuit, it was bound by Dominguez and wouldn’t be “writing on a blank slate.”  And after fully examining the opinion, the court held that the Dominguez court had interpreted ATDS as “a device [that] itself ha[s]the ability to generate random or sequential numbers to be dialed.”

So how did the lower courts within the Third Circuit—each bound by Dominguez—read the Third Circuit’s opinion so differently in rulings issued just one week apart from one another?

Well, it seems to come down to the fact that in last week’s ruling in the Wilson case, the court had read the words of the Third Circuit in a vacuum.  Critically, it’s a reading that finds no support at all in what the Third Circuit actually did after it said those words—which was to bypass the 2003 and 2008 rulings and reach back to the statutory definition of ATDS in holding that the device at issue was not an ATDS because there was no evidence it “had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.”  Obviously, if the Third Circuit had really meant what the Wilson court said it did then the holding in Dominguez would have been completely different.

And this is precisely why Richardson came out differently.  Instead of just reading the words of the Dominguez opinion out of context, the court in that case fully considered “the facts and the outcome,” of Dominguez together with “the reasoning essential to that outcome.”  And when the court did that, it led to the far more natural reading of Dominguez which is that to qualify as an ATDS equipment must “have the capacity to generate numbers using a random or sequential number generator and call those numbers.”

Dare I say, the Richardson court took the better approach here.

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