Consumer Finance Litigation

In the wake of the D.C. Circuit's ruling in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018), which struck down the FCC's interpretations of "automatic telephone dialing system" ("ATDS") under the TCPA as "unreasonably, and impermissibly, expansive," courts are reevaluating what it takes to qualify as an ATDS under the statute. In Maddox v. CBE Group, Inc., No. 1:17-cv-1909-SCJ (N.D. Ga. May 22, 2018), the Northern District of Georgia found the defendant's calling equipment required human intervention to place calls, and thus did not qualify as an ATDS.

The Maddox plaintiff filed TCPA and FDCPA claims in response to CBE's alleged harassing debt collection calls. CBE moved for summary judgment on both claims. As to the TCPA claim, CBE argued that none of the calls at issue were placed with an ATDS and, therefore, there was no TCPA violation. The evidence showed that the calls were placed with CBE's Manual Clicker Application, which (as its name suggests) requires a manual "click" to initiate a call. The Manual Clicker Application is used in conjunction with LiveVox technology which places calls through a separate automated outbound dialing system. All calls are initiated by CBE agents via the Manual Clicker Application. The evidence further showed that CBE's system does not use any predictive or statistical algorithm to engage in predictive dialing, minimize the time agents wait between calls, or minimize the occurrence of a consumer answering a call when no CBE agent is available. CBE's system also lacks the capacity to auto-dial or produce numbers to be called using a random or sequential number generator.

The plaintiff did not allege that the Manual Clicker Application was itself an ATDS, but instead argued that it had the capacity to be an ATDS when paired with other components of the calling system. In order to determine whether the defendant's dialer qualified as an ATDS, the court relied on ACA International, which it found to be binding. The court noted that the FCC's 2015 Ruling-which held that a system need only have the "capacity" to dial random and sequential numbers, rather than the "present ability" to do so-was rejected by the D.C. Circuit in ACA International as an unreasonably broad expansion of the statute. Accordingly, the court relied on the FCC's 2003 Ruling, which focuses the ATDS analysis on whether a system can dial numbers without human intervention.

The court first rejected the plaintiff's argument that the defendant's system qualified as an ATDS unless CBE's agents manually dial each 10-digit telephone number one digit at a time. The court found this argument to have "no basis in law," and that under the plaintiff's argument, "any phone with a speed-dial feature-i.e., nearly all phones-would qualify as an ATDS." The court concluded that "[t]he focus is on whether the system can automatically dial a phone number, not whether the system makes it easier for a person to dial the number." Because CBE's system required human intervention and did not use any kind of algorithm to engage in predictive dialing, the system did not qualify as an ATDS. Accordingly, the court granted summary judgment in CBE's favor on the TCPA claim.

The court denied summary judgment as to the plaintiff's FDCPA claim under § 1692d(5), however, finding that whether CBE's call volume amounted to annoying, abusive, or harassing conduct was a jury question. While acknowledging that "[c]ourts are adrift in a sea of case law . . . sometimes pulling in completely contradictory directions" as to the call volume necessary to amount to an FDCPA violation, the court held, "Given the pattern and sheer volume of calls-120 calls in just over two months-a reasonable jury could decide that Defendant violated § 1692d(5)." The court also found the time of day that calls were made and the frequency of call volume within a given time span to also weigh against entering summary judgment.