Jordan Marks v. Crunch San Diego, LLC ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JORDAN MARKS, individually and on No. 14-56834
behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 3:14-cv-00348-
BAS-BLM
v.
CRUNCH SAN DIEGO, LLC, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
Cynthia A. Bashant, District Judge, Presiding
Argued and Submitted December 6, 2016
Submission Vacated December 14, 2016
Resubmitted September 13, 2018
Pasadena, California
Filed September 20, 2018
Before: Consuelo M. Callahan, Carlos T. Bea,
and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Ikuta
2 MARKS V. CRUNCH SAN DIEGO
SUMMARY*
Telephone Consumer Protection Act
The panel vacated the district court’s grant of summary
judgment to the defendant on a claim under the Telephone
Consumer Protection Act, which places restrictions on the use
of automated telephone equipment.
The plaintiff alleged that three text messages that he
received from the defendant violated the TCPA. The district
court held that the automatic text messaging system that had
sent the messages was not an automatic telephone dialing
system (“ATDS”) under the TCPA because it lacked the
present or potential capacity “to store or produce telephone
numbers to be called, using a random or sequential number
generator.” After the district court ruled, the D.C. Circuit
issued its opinion in ACA Int’l v. Fed. Comm’cns Comm’n,
885 F.3d 687 (D.C. Cir. 2018), invalidating the FCC’s
interpretation of questions raised by the statutory definition
of an ATDS.
The panel held that, in light of ACA Int’l, and based on its
own review of the TCPA, the statutory definition of an ATDS
includes a device that stores telephone numbers to be called,
whether or not those numbers have been generated by a
random or sequential number generator. The panel remanded
the case for further proceedings.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
MARKS V. CRUNCH SAN DIEGO 3
COUNSEL
Seyed Abbas Kazerounian (argued) and Jason A. Ibey,
Kazerouni Law Group APC, Costa Mesa, California; Joshua
B. Swigart, Hyde & Swigart, San Diego, California; for
Plaintiff-Appellant.
Ian C. Ballan (argued), Lori Chang, Nina D. Boyajian, and
Justin A. Barton, Greenberg Traurig LLP, Los Angeles,
California, for Defendant-Appellee.
Shay Dvoretzky, Jeffrey R. Johnson, and Vivek Suri, Jones
Day, Washington, D.C., for Amicus Curiae Sirius XM Radio
Inc.
Brian Melendez, Barnes & Thornburg LLP, Minneapolis,
Minnesota, for Amicus Curiae ACA International.
Stuart T. Rossman and Carolyn Carter, National Consumer
Law Center, Boston, Massachusetts; Ira Rheingold, National
Association of Consumer Advocates, Washington, D.C.; for
Amici Curiae National Consumer Law Center and National
Association of Consumer Advocates.
4 MARKS V. CRUNCH SAN DIEGO
OPINION
IKUTA, Circuit Judge:
Jordan Marks appeals the grant of summary judgment to
Crunch Fitness on his claim that three text messages he
received from Crunch violated the Telephone Consumer
Protection Act (TCPA), 47 U.S.C. § 227. The district court
held that the automatic text messaging system that had sent
the messages was not an automatic telephone dialing system
(ATDS) under the TCPA, because it lacked the present or
potential capacity “to store or produce telephone numbers to
be called, using a random or sequential number generator.”
Id. § 227(a)(1). In light of the D.C. Circuit’s recent opinion
in ACA International v. Federal Communications
Commission, 885 F.3d 687 (D.C. Cir. 2018) (which was
decided after the district court ruled), and based on our own
review of the TCPA, we conclude that the statutory definition
of ATDS includes a device that stores telephone numbers to
be called, whether or not those numbers have been generated
by a random or sequential number generator. Therefore, we
reverse the district court’s grant of summary judgment.
I
A
By the early 1990s, telemarketing was in its golden age.
Telemarketing sales had “skyrocketed to over $435 million in
1990,” which was a “fourfold increase since 1984.”
137 Cong. Rec. S16,971 (daily ed. June 27, 1991) (statement
of Rep. Pressler). “This marketing success ha[d] created an
industry in which over 300,000 telemarketing solicitors
call[ed] more than 18 million Americans every day.” Id. In
MARKS V. CRUNCH SAN DIEGO 5
part, this was due to the advent of machines that
“automatically dial a telephone number and deliver to the
called party an artificial or prerecorded voice message.”
S. Rep. No. 102-178, at 2 (1991). Advertisers found these
autodialers highly efficient because they could “ensure that a
company’s message gets to potential customers in the exact
same way, every time, without incurring the normal cost of
human intervention.” H.R. Rep. No. 102-317, at 6 (1991).
At that time, a single autodialer could cause as many as 1,000
phones to ring and then deliver a prerecorded message to
each. Id. at 10.
The dark side of this success story caught Congress’s
attention. As Senator Fritz Hollings complained,
“[c]omputerized calls are the scourge of modern civilization.
They wake us up in the morning; they interrupt our dinner at
night; they force the sick and elderly out of bed; they hound
us until we want to rip the telephone right out of the wall.”
137 Cong. Rec. S16,205 (daily ed. Nov. 7, 1991) (statement
of Sen. Hollings). Recipients deemed that “automated
telephone calls that deliver an artificial or prerecorded voice
message are more of a nuisance and a greater invasion of
privacy than calls placed by ‘live’ persons.” S. Rep. No. 102-
178, at 4. Among other reasons, “[t]hese automated calls
cannot interact with the customer except in preprogrammed
ways, do not allow the caller to feel the frustration of the
called party” and deprive customers of “the ability to slam the
telephone down on a live human being.” Id. at 4 & n.3
(citation omitted). Congress also noted surveys wherein
consumers responded that the two most annoying things were
(1) “[p]hone calls from people selling things” and (2) “phone
calls from a computer trying to sell something.” H.R. Rep.
No. 102-317, at 9.
6 MARKS V. CRUNCH SAN DIEGO
The volume of automated telemarketing calls was not
only an annoyance but also posed dangers to public safety.
S. Rep. No. 102-177, at 20 (1991). “Due to advances in auto-
dialer technology,” the machines could be programmed to
call numbers in large sequential blocks or dial random 10-
digit strings of numbers. Id. This resulted in calls hitting
hospitals and emergency care providers “and sequentially
delivering a recorded message to all telephone lines.” Id.
And because some autodialers would “not release [the line]
until the prerecorded message is played, even when the
called party hangs up,” H.R. Rep. No. 102-317, at 10,
there was a danger that the autodialers could “seize”
emergency or medical assistance telephone lines, rendering
them inoperable, and “dangerously preventing those lines
from being utilized to receive calls from those needing
emergency services,” H.R. Rep. No. 101-633, at 3 (1990).
Representative Marge Roukema noted that it was “not just
calls to doctors’ offices or police and fire stations that pose a
public health hazard.” 137 Cong. Rec. H35,305 (daily ed.
Nov. 26, 1991) (statement of Rep. Roukema). She recounted
“the sheer terror” of a New York mother who, when she tried
to call an ambulance for her injured child, “picked up her
phone only to find it occupied by a computer call that would
not disconnect.” Id. at 35,305–06.
In light of these and other concerns, Senator Hollings
introduced a bill to amend the Communications Act of 1934,
in order to “protect the privacy interests of residential
telephone subscribers by placing restrictions on unsolicited,
automated telephone calls to the home and to facilitate
interstate commerce by restricting certain uses of facsimile
(fax) machines and automatic dialers.” S. Rep. No. 102-178,
at 1. This bill became the Telephone Consumer Protection
Act of 1991.
MARKS V. CRUNCH SAN DIEGO 7
As originally enacted, the TCPA placed restrictions on the
use of automated telephone equipment, including automatic
telephone dialing systems and telephone facsimile machines.
The statute defined “automatic telephone dialing systems”
(ATDS) as follows:
(1) The term ‘automatic telephone dialing
system’ means equipment which has the
capacity—
(A) to store or produce telephone numbers
to be called, using a random or sequential
number generator; and
(B) to dial such numbers.
Pub. L. No. 102-243, § 227, 105 Stat. 2394, 2395. This
language established Congress’s intent to regulate equipment
that is “automatic,” and that has “the capacity” to function in
two specified ways: “to store or produce telephone numbers
to be called, using a random or sequential number generator”
and “to dial” those telephone numbers. Although the TCPA
has been amended several times since its original enactment,
Congress has never revised the definition of an ATDS.
Therefore, Congress’s decision to regulate only those devices
which have the aforementioned functions, capacity, and
ability to function automatically remains unchanged.
The TCPA prohibited the use of an ATDS to make “any
call (other than a call made for emergency purposes or made
with the prior express consent of the called party) using any
automatic telephone dialing system or an artificial or
prerecorded voice” to emergency telephone lines, hospital
rooms or other health care facilities, and paging and cellular
8 MARKS V. CRUNCH SAN DIEGO
telephones. 47 U.S.C. § 227(b)(1)(A) (1991). It also
prohibited the use of an ATDS “in such a way that two or
more telephone lines of a multi-line business are engaged
simultaneously.” Id. § 227(b)(1)(D).
As required by the TCPA, id. § 227(b)(2), in 1992 the
FCC promulgated rules to implement the statute. See Rules
& Regulations Implementing the Tel. Consumer Prot. Act of
1991, 7 FCC Rcd. 8752, 8753 (1992). The FCC did not
elaborate on the functions of an ATDS and its definition
merely tracked the statutory definition. Id. at 8755 n.6,
8792.1
B
It was not until ten years later that the FCC realized that
“the telemarketing industry ha[d] undergone significant
changes in the technologies and methods used to contact
consumers,” and such marketplace changes warranted
modifications to the existing rules. Rules & Regulations
Implementing the Tel. Consumer Prot. Act of 1991, 18 FCC
Rcd. 14,014, 14,017 (2003) (2003 Order). In particular, the
1
As originally promulgated, 47 C.F.R. § 64.1200(f)(1) (1992)
provided:
(f) As used in this section:
(1) The terms automatic telephone dialing system and
autodialer mean equipment which has the capacity to
store or produce telephone numbers to be called using
a random or sequential number generator and to dial
such numbers.
The same definition is in force today.
MARKS V. CRUNCH SAN DIEGO 9
FCC was concerned about the proliferating use of the
predictive dialer, which is “an automated dialing system that
uses a complex set of algorithms to automatically dial
consumers’ telephone numbers in a manner that ‘predicts’ the
time when a consumer will answer the phone and a
telemarketer will be available to take the call.” Id. at 14,022
n.31. Unlike the automated telemarketing devices prevalent
in the early 1990s, which dialed a random or sequential block
of numbers, predictive dialers generally automatically dialed
a list of numbers that had been preprogrammed and stored in
the dialer, or were downloaded from a computer database. Id.
at 14,090.
In order to determine whether the TCPA applied to this
new technology, the FCC had to assess whether the predictive
dialer qualified as an ATDS. This required consideration of
the statutory definition: whether the equipment was
“automatic” and whether it had the capacity to function in the
two relevant ways.
In a series of rulings, from 2003 to 2015, the FCC
determined that predictive dialers and other new technology
qualified as an ATDS, even if they did not generally generate
or store random or sequential numbers. In its 2003 ruling, the
FCC reasoned that a predictive dialer may have the
“capacity” to dial random and sequential numbers, even if it
was not currently being used for such a purpose. Id. at
14,091. The FCC acknowledged the telemarketing industry’s
argument that predictive dialers do not fall within the
statutory definition of ATDS because they “do not dial
numbers ‘randomly or sequentially,’” but nevertheless
concluded that predictive dialers’ “hardware, when paired
with certain software, ha[d] the capacity to store or produce
numbers and dial those numbers at random, in sequential
10 MARKS V. CRUNCH SAN DIEGO
order, or from a database of numbers.” Id. at 14,090–91. In
its later 2015 order, the FCC went even further, and
determined that a device could have the requisite capacity if
it had any potential to be configured for that purpose. Rules
& Regulations Implementing the Tel. Consumer Prot. Act of
1991, 30 FCC Rcd. 7961, 7974 (2015) (2015 Declaratory
Ruling) (holding that “the capacity of an autodialer is not
limited to its current configuration but also includes its
potential functionalities”).
Second, the FCC suggested that a device could qualify as
an ATDS even if it entirely lacked the capacity to dial
numbers randomly or sequentially. Thus in its 2012 ruling,
the FCC stated that the definition of an ATDS “covers any
equipment that has the specified capacity to generate numbers
and dial them without human intervention regardless of
whether the numbers called are randomly or sequentially
generated or come from calling lists.” Rules & Regulations
Implementing the Tel. Consumer Prot. Act of 1991, 27 FCC
Rcd. 15,391, 15,392 n.5 (2012) (2012 Declaratory Ruling).
The FCC’s subsequent 2015 ruling, however, made the
contrary suggestion that a device would not meet the
definition of an ATDS unless it had the capacity to dial
random or sequential numbers. See 2015 Declaratory Ruling,
30 FCC Rcd. at 7971–72 (“We reaffirm our previous
statements that dialing equipment generally has the capacity
to store or produce, and dial random or sequential numbers
(and thus meets the TCPA’s definition of ‘autodialer’) even
if it is not presently used for that purpose, including when the
caller is calling a set list of consumers.”).
The FCC relied on policy and legislative history to
support its application of the definition of ATDS to new
technology. The FCC reasoned that “through the TCPA,
MARKS V. CRUNCH SAN DIEGO 11
Congress was attempting to alleviate a particular
problem—an increasing number of automated and
prerecorded calls to certain categories of numbers,” and
therefore Congress intended for any device that had the basic
function of being automatic, i.e., had “the capacity to dial
numbers without human intervention,” 2003 Order, 18 FCC
Rcd. at 14,092, to be regulated under the TCPA.2 Further, the
FCC thought that it was clear “that Congress anticipated that
the FCC, under its TCPA rulemaking authority, might need
to consider changes in technologies.” Id. Accordingly, the
FCC concluded that an interpretation of the statutory
definition of ATDS which excluded new technology that
could automatically dial thousands of numbers merely
because it “relies on a given set of numbers would lead to an
unintended result” and fail to effectuate the purpose of the
statutory requirement. Id.
C
After the FCC’s 2015 ruling, a large number of regulated
entities challenged the FCC’s definition of an ATDS in the
D.C. and Seventh Circuits, and the petitions were
consolidated in the D.C. Circuit. See Consolidation Order,
ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 2018) (No. 15-
1211). Among other things, petitioners had sought
clarification from the FCC on how the TCPA applied to new
technologies, including cloud-based dialing options and
2
In the 2003 order, the FCC also confirmed that the TCPA applied to
both voice calls and “text calls to wireless numbers” including short
message service (SMS) calls, which “provide[] the ability for users to send
and receive text messages to and from mobile handsets with maximum
message length ranging from 120 to 500 characters.” 2003 Order, 18
FCC Rcd. at 14,115 & n.606 (citation omitted).
12 MARKS V. CRUNCH SAN DIEGO
smartphone apps. 2015 Declaratory Ruling, 30 FCC Rcd. at
7970. In challenging the 2015 order, petitioners argued that
they had not received the clarification they sought, asserting
specifically that the FCC erred in concluding that equipment
that merely had the potential future capacity to function as an
autodialer, taking into account possible upgrades or
modifications, met the statutory definition of ATDS. ACA
Int’l, 885 F.3d at 696. They also challenged the FCC’s
conclusion that equipment qualifies as an ATDS so long as it
can automatically dial from a list of numbers, even if it does
not have the capacity to store or produce random or
sequential numbers. Id. at 694.
The D.C. Circuit first asked whether it had jurisdiction to
consider all of the FCC’s rulings on this issue, including
those that predated the 2015 order. Although normally all
challenges to an FCC rule must be made within 60 days after
its entry, 28 U.S.C. § 2344, a petition for a rulemaking may
reopen consideration of prior rulemakings, see Pub. Citizen
v. Nuclear Regulatory Comm’n, 901 F.2d 147, 151–52 (D.C.
Cir. 1990). “An agency’s reconsideration of a rule in a new
rulemaking constitutes a reopening when the original rule is
‘reinstated’ so as to have renewed effect.” Biggerstaff v. FCC,
511 F.3d 178, 185 (D.C. Cir. 2007) (quoting Pub. Citizen,
901 F.2d at 152). The D.C. Circuit concluded that the
parties’ 2015 rulemaking petition to the FCC reopened
consideration of the definition of ATDS established in the
FCC’s 2003 order, as well as its subsequent rulings. ACA
Int’l, 885 F.3d at 701.
On the merits, the D.C. Circuit invalidated the FCC’s
interpretation of the two key questions raised by the statutory
definition of an ATDS, namely: “(i) when does a device have
MARKS V. CRUNCH SAN DIEGO 13
the ‘capacity’ to perform the two enumerated functions; and
(ii) what precisely are those functions?” Id. at 695.
Turning first to the FCC’s interpretation of “capacity,” the
D.C. Circuit concluded it was overbroad. According to the
court, the “straightforward understanding of the
Commission’s ruling is that all smartphones qualify as
autodialers because they have the inherent ‘capacity’ to gain
ATDS functionality by downloading an app.” Id. at 700.
Because “[i]t cannot be the case that every uninvited
communication from a smartphone infringes federal law, and
that nearly every American is a TCPA-violator-in-waiting, if
not a violator-in-fact,” id. at 698, the D.C. Circuit concluded
that the FCC’s interpretation “is an unreasonably, and
impermissibly, expansive one,” id. at 700.
Turning to the second issue, the D.C. Circuit concluded
that the FCC’s explanation of the functions of an ATDS was
inadequate. The court explained that “[a] basic question
raised by the statutory definition is whether a device must
itself have the ability to generate random or sequential
telephone numbers to be dialed,” or whether it would be
“enough if the device can call from a database of telephone
numbers generated elsewhere.” Id. at 701. The FCC had
stated that a device qualified as an ATDS only if it could
generate random or sequential numbers to be dialed, but also
indicated that a device which could only dial numbers from
a stored list also qualified as an ATDS. Id. at 701–02. While
“[i]t might be permissible for the Commission to adopt either
interpretation,” the D.C. Circuit held that “the Commission
cannot, consistent with reasoned decisionmaking, espouse
both competing interpretations in the same order.” Id. at 703.
The D.C. Circuit also noted that the 2015 ruling lacked clarity
on whether an autodialer must dial numbers without human
14 MARKS V. CRUNCH SAN DIEGO
intervention. Although the FCC indicated that “the ‘basic
function[]’ of an autodialer is to ‘dial numbers without human
intervention,’” it declined a request to clarify that a dialer
must have such a feature. Id. (alteration in original) (quoting
2015 Declaratory Ruling, 30 FCC Rcd. at 7975). Because
“[t]he order’s lack of clarity about which functions qualify a
device as an autodialer compounds the unreasonableness of
the Commission’s expansive understanding of when a device
has the ‘capacity’ to perform the necessary functions,” the
court “set aside the Commission’s treatment of those
matters.” Id.
II
We now turn to the facts of this case. The device at issue
in this appeal is called the Textmunication system, which is
a web-based marketing platform designed to send
promotional text messages to a list of stored telephone
numbers.3 Phone numbers are captured and stored in one of
three ways: An operator of the Textmunication system may
manually enter a phone number into the system; a current or
potential customer may respond to a marketing campaign
with a text (which automatically provides the customer’s
phone number); or a customer may provide a phone number
by filling out a consent form on a Textmunication client’s
website. A client of Textmunication can then design a
marketing campaign that, for example, offers customers free
passes and personal training sessions, provides appointment
reminders and class updates, or sends birthday greetings, and
3
We have concluded that the TCPA applies to text messages because
it is “a form of communication used primarily between telephones.”
Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 953–54 (9th Cir.
2009).
MARKS V. CRUNCH SAN DIEGO 15
the Textmunication system will automatically send the
desired messages to the stored phone numbers at a time
scheduled by the client.
Crunch Fitness communicates with its prospective and
current gym members by sending text messages through this
Textmunication system. When Crunch wants to send a text
message to its current or prospective customers, a Crunch
employee logs into the Textmunication system, selects the
recipient phone numbers, generates the content of the
message, and selects the date and time for the message to be
sent. The Textmunication system will then automatically
send the text messages to the selected phone numbers at the
appointed time.
Jordan Marks signed up for a gym membership with
Crunch Fitness in 2012. After joining the gym, Marks
received three text messages from Crunch over a period of
eleven months. Marks’s phone carrier charged him incoming
tolls for each of these text messages. In February 2014,
Marks filed a putative class action complaint against Crunch,
alleging violations of § 227(b) of the TCPA. He claimed that
Crunch “negligently contact[ed] [him] on [his] cellular
telephone, in violation of the [TCPA], thereby invading [his]
privacy.” Marks alleged that the text messages were sent
using an ATDS which has “the capacity to send text messages
to cellular telephone numbers from a list of telephone
numbers automatically and without human intervention.”
The district court granted summary judgment in favor of
Crunch on the ground that the Textmunication system did not
qualify as an ATDS because it presently lacked a random or
sequential number generator, and did not have the potential
capacity to add such a feature. Because it defined an ATDS
16 MARKS V. CRUNCH SAN DIEGO
as necessarily including a random or sequential number
generator, the court did not consider the declaration of
Marks’s expert witness, Jeffrey Hansen, stating that the
Textmunication system called numbers from a stored list.
The court therefore denied Crunch’s motion to exclude
Hansen’s testimony as moot. Marks timely appealed. We
vacated submission of Marks’s appeal pending the issuance
of ACA International.
III
A
After ACA International was issued, we ordered
supplemental briefing to address the impact of the D.C.
Circuit’s opinion on this case. Under the Hobbs Act, an
appellate court “has exclusive jurisdiction to enjoin, set aside,
suspend (in whole or in part), or to determine the validity
of—(1) all final orders of the [FCC] made reviewable by
[47 U.S.C § 402(a)],” 28 U.S.C. § 2342, so long as the appeal
is timely, meaning that it was brought within sixty days from
when the FCC releases the final order to the public, see
28 U.S.C. § 2344.4 Here, various parties timely challenged
the FCC’s 2015 order in both the Seventh and D.C. Circuits;
these challenges were consolidated and assigned to the D.C.
Circuit, which then became “the sole forum for addressing
. . . the validity of the FCC’s” order. MCI Telecomms. Corp.
4
An appellate court lacks authority to consider a challenge to an FCC
order that is brought after sixty days from the date when the FCC releases
the final order to the public. See 28 U.S.C. § 2344; see also U.S. W.
Commc’ns, Inc. v. Jennings, 304 F.3d 950, 958 n.2 (9th Cir. 2002) (stating
that “[p]roperly promulgated FCC regulations currently in effect must be
presumed valid” for purposes of a case not brought pursuant to a petition
under the Hobbs Act).
MARKS V. CRUNCH SAN DIEGO 17
v. U.S. W. Commc’ns, 204 F.3d 1262, 1267 (9th Cir. 2000)
(quoting GTE South, Inc. v. Morrison, 199 F.3d 733, 743 (4th
Cir. 1999)). Because the D.C. Circuit exercised its authority
to set aside the FCC’s interpretations of the definition of an
ATDS in the 2015 order, 28 U.S.C. § 2342, and any prior
FCC rules that were reinstated by the 2015 order, see
Biggerstaff, 511 F.3d at 185 (quoting Pub. Citizen, 901 F.2d
at 152), we conclude that the FCC’s prior orders on that issue
are no longer binding on us. See King v. Time Warner Cable
Inc., 849 F.3d 473, 476–77 (2d Cir. 2018) (holding that ACA
International “invalidated that [FCC 2015 Declaratory
Ruling] and thereby removed any deference we might owe to
the views the FCC expressed in it”); Dominguez ex rel
Himself v. Yahoo, Inc., 894 F.3d 116, 119 (3d Cir. 2018)
(holding that in light of the D.C. Circuit’s holding, the court
was free to interpret the statutory definition of an autodialer
as it had prior to the issuance of the FCC’s 2015 order).
We review a district court’s grant of summary judgment
de novo, viewing the evidence in the light most favorable to
the nonmoving party in order to determine whether there are
any genuine issues of material fact. Thomas v. Ponder,
611 F.3d 1144, 1149–50 (9th Cir. 2010). The district court
had jurisdiction under 28 U.S.C. § 1331. We have
jurisdiction under 28 U.S.C. § 1291.
B
Because the D.C. Circuit vacated the FCC’s interpretation
of what sort of device qualified as an ATDS, only the
statutory definition of ATDS as set forth by Congress in 1991
18 MARKS V. CRUNCH SAN DIEGO
remains. See 47 U.S.C. § 227(a).5 Accordingly, we must
begin anew to consider the definition of ATDS under the
TCPA.
We “begin [our analysis] with the plain language of the
statute.” Guido v. Mount Lemmon Fire Dist., 859 F.3d 1168,
1170 n.1 (9th Cir. 2017) (alteration in original) (quoting
Negusie v. Holder, 555 U.S. 511, 542 (2009)). “If the
‘statutory text is plain and unambiguous[,]’ we ‘must apply
the statute according to its terms.’” Id. (alteration in original)
(quoting Carcieri v. Salazar, 555 U.S. 379, 387 (2009)). If
the language of a statute is ambiguous, “we may use canons
of construction, legislative history, and the statute’s overall
purpose to illuminate Congress’s intent.” Ileto v. Glock, Inc.,
565 F.3d 1126, 1133 (9th Cir. 2009) (quoting Jonah R. v.
Carmona, 446 F.3d 1000, 1005 (9th Cir. 2006)). “It is also ‘a
fundamental canon of statutory construction that the words of
a statute must be read in their context and with a view to their
place in the overall statutory scheme.’” FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)
(quoting Davis v. Michigan Dep’t of Treasury, 489 U.S. 803,
809 (1989)). “In ascertaining the plain meaning of [a] statute,
the court must look to the particular statutory language at
issue, as well as the language and design of the statute as a
whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291
(1988); see also United States v. Lewis, 67 F.3d 225, 228–29
(9th Cir. 1995) (“Particular phrases must be construed in light
5
Although the FCC had promulgated a regulation defining ATDS, the
“regulation does little more than restate the terms of the statute itself,” and
“the existence of a parroting regulation does not change the fact that the
question here is not the meaning of the regulation but the meaning of the
statute.” Gonzales v. Oregon, 546 U.S. 243, 257 (2006).
MARKS V. CRUNCH SAN DIEGO 19
of the overall purpose and structure of the whole statutory
scheme.”).
As the D.C. Circuit noted, the definition of ATDS
“naturally raises two questions: (i) when does a device have
the ‘capacity’ to perform the two enumerated functions; and
(ii) what precisely are those functions?” ACA Int’l, 885 F.3d
at 695. We start by addressing the second question regarding
functions. The TCPA defines ATDS as “equipment which
has the capacity—(A) to store or produce telephone numbers
to be called, using a random or sequential number generator;
and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). The
question is whether, in order to be an ATDS, a device must
dial numbers generated by a random or sequential number
generator or if a device can be an ATDS if it merely dials
numbers from a stored list. We must also determine to what
extent the device must function without human intervention
in order to qualify as an ATDS.
Marks and Crunch offer competing interpretations of the
language of § 227(a)(1)(A), but both parties fail to make
sense of the statutory language without reading additional
words into the statute.
Marks points out that a number generator is not a storage
device; a device could not use “a random or sequential
number generator” to store telephone numbers. Therefore,
Marks asserts, it does not make sense to read “store” in
subdivision (A) as applying to “telephone numbers to be
called, using a random or sequential number generator.”
47 U.S.C. § 227(a)(1)(A). Instead, Marks contends that we
should read the definition as providing that an ATDS is
“equipment which has the capacity (A) to [i] store [telephone
numbers to be called] or [ii] produce telephone numbers to be
20 MARKS V. CRUNCH SAN DIEGO
called, using a random or sequential number generator; and
(B) to dial such numbers.” In other words, a piece of
equipment qualifies as an ATDS if it has the capacity to store
telephone numbers and then dial them.
Crunch, in turn, argues that due to the placement of the
comma in the statute, the phrase “using a random or
sequential number generator” modifies both “store” and
“produce.” Therefore, Crunch argues that the best reading of
the statute defines an ATDS as “equipment which has the
capacity (A) to store [telephone numbers produced using a
random or sequential number generator]; or [to] produce
telephone numbers to be called, using a random or sequential
number generator; and (B) to dial such numbers.” As such,
to qualify as an ATDS, according to Crunch, a device must
store telephone numbers that have been produced using a
random or sequential number generator.
After struggling with the statutory language ourselves, we
conclude that it is not susceptible to a straightforward
interpretation based on the plain language alone. Rather, the
statutory text is ambiguous on its face.6 The D.C. Circuit
apparently agreed, stating that “[i]t might be permissible” for
the FCC to adopt an interpretation that a device had to
generate random or sequential numbers in order to be an
ATDS, or that a device could be an ATDS if it was limited to
dialing numbers from a stored list. ACA Int’l, 885 F.3d at
702–03. We therefore turn to other aids in statutory
interpretation.
6
Our statement in Satterfield that “the statutory text is clear and
unambiguous” referred to only one aspect of the text: whether a device
had the “capacity ‘to store or produce telephone numbers . . . .’” 569 F.3d
at 951 (emphasis in original).
MARKS V. CRUNCH SAN DIEGO 21
C
Because the statutory language is ambiguous, we look at
the context and the structure of the statutory scheme. The
structure and context of the TCPA as originally enacted
indicate that Congress intended to regulate devices that make
automatic calls. Although Congress focused on regulating
the use of equipment that dialed blocks of sequential or
randomly generated numbers—a common technology at that
time—language in the statute indicates that equipment that
made automatic calls from lists of recipients was also covered
by the TCPA.
This conclusion is supported by provisions in the TCPA
allowing an ATDS to call selected numbers. For instance, the
TCPA permitted use of autodialers for a call “made with the
prior express consent of the called party.” 47 U.S.C.
§ 227(b)(1)(A) (1991). To take advantage of this permitted
use, an autodialer would have to dial from a list of phone
numbers of persons who had consented to such calls, rather
than merely dialing a block of random or sequential
numbers.7 Congress’s 2015 amendment to the TCPA
7
Other provisions in the statute prohibited calls to specified numbers.
For instance, the statute authorized the FCC to establish and use a national
database “to compile a list of telephone numbers of residential subscribers
who object to receiving telephone solicitations” and who could not be
called by telemarketers. Id. § 227(c)(3). It likewise prohibited calls to
emergency telephone lines, id. § 227(b)(1)(A)(i), patient rooms in
hospitals or other health care facilities, id. § 227(b)(1)(A)(ii), and paging
services and cellular phones, id. § 227(b)(1)(A)(iii). In order to comply
with such restrictions, an ATDS could either dial a list of permitted
numbers (as allowed for autodialed calls made with the prior express
consent of the called party) or block prohibited numbers when calling a
sequence of random or sequential numbers. In either case, these
provisions indicate Congress’s understanding that an ATDS was not
22 MARKS V. CRUNCH SAN DIEGO
provides additional information about Congress’s views on
the scope of the definition of ATDS. After the FCC issued its
2015 order, Congress added language to § 227(b)(1)(A)(iii),
exempting the use of an ATDS to make calls “solely to
collect a debt owed to or guaranteed by the United States.”
Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 301,
129 Stat. 584, 588 (codified at 47 U.S.C. § 227(b)(1)(A)(iii)).
Like the exception allowing the use of an autodialer to make
calls “with the prior express consent of the called party,” this
debt collection exception demonstrates that equipment that
dials from a list of individuals who owe a debt to the United
States is still an ATDS but is exempted from the TCPA’s
strictures. Moreover, in amending this section, Congress left
the definition of ATDS untouched, even though the FCC’s
prior orders interpreted this definition to include devices that
could dial numbers from a stored list. We “presume that
when Congress amends a statute, it is knowledgeable about
judicial decisions interpreting the prior legislation.” Porter
v. Bd. of Trs. of Manhattan Beach Unified Sch. Dist.,
307 F.3d 1064, 1072 (9th Cir. 2002). Because we infer that
Congress was aware of the existing definition of ATDS, its
decision not to amend the statutory definition of ATDS to
overrule the FCC’s interpretation suggests Congress gave the
interpretation its tacit approval. See Lorillard v. Pons,
434 U.S. 575, 580 (1978) (“Congress is presumed to be aware
of an administrative or judicial interpretation of a statute and
to adopt that interpretation when it re-enacts a statute without
change.”).
Despite the ambiguity of the statutory definition of
ATDS, reading the definition “in [its] context and with a view
limited to dialing wholly random or sequential blocks of numbers, but
could be configured to dial a curated list.
MARKS V. CRUNCH SAN DIEGO 23
to [its] place in the overall statutory scheme,” Brown &
Williamson Tobacco Corp., 529 U.S. at 133, we conclude that
the statutory definition of ATDS is not limited to devices with
the capacity to call numbers produced by a “random or
sequential number generator,” but also includes devices with
the capacity to dial stored numbers automatically.
Accordingly, we read § 227(a)(1) to provide that the term
automatic telephone dialing system means equipment which
has the capacity—(1) to store numbers to be called or (2) to
produce numbers to be called, using a random or sequential
number generator—and to dial such numbers.8
We also reject Crunch’s argument that a device cannot
qualify as an ATDS unless it is fully automatic, meaning that
it must operate without any human intervention whatsoever.
By referring to the relevant device as an “automatic telephone
dialing system,” Congress made clear that it was targeting
equipment that could engage in automatic dialing, rather than
equipment that operated without any human oversight or
8
Therefore, we decline to follow the Third Circuit’s unreasoned
assumption that a device must be able to generate random or sequential
numbers in order to qualify as an ATDS. Dominguez ex rel. Himself v.
Yahoo, Inc., 894 F.3d 116, 120 (3d Cir. 2018) (stating, without
explanation, that the plaintiff’s claims against Yahoo failed because he
“cannot point to any evidence that creates a genuine dispute of fact as to
whether [Yahoo’s device] had the present capacity to function as an
autodialer by generating random or sequential telephone numbers and
dialing those numbers”). In making this assumption, the Third Circuit
failed to resolve the linguistic problem it identified in an unpublished
opinion in the same case, where it acknowledged that “it is unclear how
a number can be stored (as opposed to produced) using ‘a random or
sequential number generator.’” Dominguez v. Yahoo, Inc., 629 F. App’x
369, 372 n.1 (3d Cir. 2015). Because the Third Circuit merely avoided the
interpretive questions raised by the statutory definition of ATDS, its
published opinion is unpersuasive.
24 MARKS V. CRUNCH SAN DIEGO
control. 47 U.S.C. § 227(a)(1) (emphasis added); see ACA
Int’l, 885 F.3d at 703 (“‘[A]uto’ in autodialer—or,
equivalently, ‘automatic’ in ‘automatic telephone dialing
system,’ 47 U.S.C. § 227(a)(1)—would seem to envision non-
manual dialing of telephone numbers.”). Common sense
indicates that human intervention of some sort is required
before an autodialer can begin making calls, whether turning
on the machine or initiating its functions. Congress was
clearly aware that, at the very least, a human has to flip the
switch on an ATDS. See The Automated Telephone
Consumer Protection Act of 1991, Hearing Before the
Subcomm. on Commc’ns of the Comm. on Commerce, Sci.,
and Transp., 102nd Cong. 15 (1991) (statement of Robert
Bulmash, President, Private Citizen, Inc.) (describing a pitch
for autodialers in a telemarketing magazine as stating: “You
come home from work[, and] turn on the machine, just like
turning on a radio.”). Crunch does not dispute that the
Textmunication system dials numbers automatically, and
therefore it has the automatic dialing function necessary to
qualify as an ATDS, even though humans, rather than
machines, are needed to add phone numbers to the
Textmunication platform.
D
Because we read § 227(a)(1) to provide that the term
“automatic telephone dialing system” means equipment
which has the capacity—(1) to store numbers to be called or
(2) to produce numbers to be called, using a random or
sequential number generator—and to dial such numbers
automatically (even if the system must be turned on or
triggered by a person), we conclude there is a genuine issue
of material fact as to whether the Textmunication system is
an ATDS. The evidence in the record shows that the
MARKS V. CRUNCH SAN DIEGO 25
Textmunication system stores numbers and dials them
automatically to send text messages to a stored list of phone
numbers as part of scheduled campaigns. This is sufficient to
survive summary judgment.9 Because the district court did
not have the benefit of ACA International or our construction
of the definition of ATDS, we vacate the district court’s
ruling and remand it for further proceedings.10 Each party
shall bear its own costs on appeal.
VACATED AND REMANDED.
9
Because we vacate the district court’s decision on this ground, we
decline the reach the question whether the device needs to have the current
capacity to perform the required functions or just the potential capacity to
do so. Cf. Meyer v. Portfolio Recovery Assocs. LLC, 707 F.3d 1036, 1043
(9th Cir. 2012); Satterfield, 569 F.3d at 951.
10
We also vacate the district court’s dismissal of Crunch’s motion to
exclude Hansen’s declaration as moot. The district court based its ruling
on its conclusion that there was no dispute of material fact as to whether
the Textmunication system was an ATDS, and Hansen’s declaration could
not help create one. To the extent Hansen’s declaration addresses whether
the Textmunication system calls automatically from a stored list, it is
relevant to the question whether the system qualifies as an ATDS.
We DENY Marks’s motion for judicial notice of two newspaper
articles. We “may judicially notice a fact that is not subject to reasonable
dispute because it: (1) is generally known within the trial court’s territorial
jurisdiction; or (2) can be accurately and readily determined from sources
whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b).
Because Marks has not pointed to any judicially noticeable facts in these
articles, we decline to take judicial notice.