Consumer Finance Litigation

The Fifth Circuit Court of Appeals may now have to decide where it stands on the ATDS issue.  On May 20, 2020, Judge Lee Yeakel of the United States District Court for the Western District of Texas issued an opinion in Suttles v. Facebook, Inc., Case No. 1:18-cv-01004 (W.D. Tex. May 20, 2020), where he concluded that a dialing system is not an Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”) if it does not produce numbers.  A copy of the opinion can be read here.

Three circuit courts have previously held that the definition of an ATDS requires a dialing system to produce telephone numbers using a random or sequentially number generator, two circuits have gone the other way and concluded that it is enough if the dialing system is able to store telephone numbers.  See Dominguez v. Yahoo, Inc., 894 F.3d 116, 121 (3rd Cir. 2018); Glasser v. Hilton Grand Vacations Co., LLC, 948 F.3d 1301, 1309 (11th Cir. 2020); Gadelhak v. AT&T Serv., Inc., 950 F.3d 458, 464 (7th Cir. 2020); but see Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052 (9th Cir. 2018); Duran v. La Boom Disco, Inc., 955 F.3d 279 (2nd Cir. 2020).  However, the Fifth Circuit has yet to weigh in on the ATDS definition. After describing this circuit split on the ATDS definition, Judge Yeakel provides, without additional discussion, that he “agrees that a device must randomly or sequentially generate – not just store – numbers to be considered an ATDS under the [TCPA].”

Unlike many ATDS decisions, however, Suttles involves a motion to dismiss and not a motion for summary judgment.  As such, even with its view of the ATDS definition, the Suttles court was still required to assume that all of the allegations in the complaint were correct.  The problem that the plaintiff had was that he alleged that he received “targeted” messages.  The court acknowledged “the difficulty [a plaintiff] faces in knowing the type of calling system used without the benefit of discovery.”  However, the court conclude that the facts already known by the plaintiff suggest that an ATDS was not used. Accordingly, based on the plaintiff’s allegation of receiving “targeted” messages, the court dismissed the complaint by holding that a device used to target specific individuals, not random individuals, “weigh[s] against an inference that an ATDS was used.”

One can only assume that this case will be appealed and that the Fifth Circuit will finally have a chance to weigh in on the ATDS definition unless the SCOTUS or Congress do something first, so stay tuned.