United States: ALERT For Ninth Circuit And TCPA: A System That Has The Capacity To Automatically Dial Stored Numbers Is An ATDS

Executive Summary

  • On September 20, 2018, the Ninth Circuit in Marks v. Crunch San Diego, LLC  (Case: 14-56834), overturned a lower court's ruling that a text messaging system was not an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA), holding instead that 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 Court found that because the language of the TCPA was ambiguous, it used canons of construction, legislative history, and the statute's overall purpose in determining that a system only needs to store numbers and then dial them automatically to qualify as an ATDS.
  • The Court declined to follow the Third Circuit's opinion in Dominguez v. Yahoo, Inc., noting the decision unpersuasive as it contained an "unreasoned assumption that a device must be able to generate random or sequential numbers in order to qualify as an ATDS" and "merely avoided the interpretive questions raised by the statutory definition of ATDS."
  • Many anxiously await the Federal Communication Commission's (FCC) updated ruling on the definition of an ATDS because its omnibus overhaul will certainly be guided by the analytical framework set forth in the D.C. Circuit's opinion, and the new Chairman has questioned many of the FCC's interpretations that have led to the proliferation of TCPA lawsuits.


The system at issue 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. Phone numbers can be input manually or automatically. Crunch Fitness communicates with its prospective and current gym members by sending text messages through the Textmunication system, which, after a Crunch Fitness employee logs in, selects the phone numbers, and generates the content, automatically sends the text messages to the selected phone numbers.

Marks signed up for a gym membership with Crunch Fitness in 2012. Over an eleven- month period, he received three text messages. In 2014, Marks filed a putative class action against Crunch Fitness, alleging violations of the TCPA.

The district court granted summary judgment in favor of Crunch Fitness on the ground that the system at issue did not qualify as an ATDS because it did not have the capacity to randomly or sequentially generate numbers and then dial those numbers.


After spending significant ink discussing the intent and purpose behind the creation of the TCPA, noting that much of what was written in 1991 related to the technology at the time, the Court discussed ACA International  and its effect on the statute itself. The Court noted that because the D.C. Circuit vacated the FCC's interpretation of what device qualified as an ATDS, "only the statutory definition of ATDS ... remains." (Op., p. 17-18.) Essentially, we have a blank slate. The next issue was whether the statutory text was "plain and unambiguous" or "ambiguous."

The Court in an almost conclusory fashion found that the statutory text was confusing and thus ambiguous, as evidenced by: (1) Marks and Crunch Fitness offering competing interpretations of the language, and (2) the D.C. Circuit's opinion finding 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." (Op., p. 20.) The Court then looked to the context and structure of the statutory scheme as well as the statute's overall purpose for clarification.

"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." In short, the Ninth Circuit held that Congress intended to regulate devices that make automatic calls. Specifically, as support for this statement, the Court noted:

  • Provisions in the TCPA allow an ATDS to call selected numbers (i.e., those who have provided prior express consent); and
  • Provisions in the TCPA permit exceptions to the statute, which allows a system that qualifies as an ATDS to automatically call specific numbers from a set list.

The Court held, therefore, 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." In short, the definition of an ATDS 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." (Op., p. 23.)

Practical Implications

There are a few key points that must be noted:

  1. Definition of an ATDS: A severe definition of an ATDS now controls in the Ninth Circuit – absent a successful further appeal.

    What does this mean? Plaintiffs in the Ninth Circuit will likely argue that "anything qualifies as an ATDS."
  2. Human Intervention: Many have argued (and some courts have agreed) that a system is not truly automatic when human intervention is involved. The Court here essentially found that if human intervention is minor, such as when a person "turn[s] on" or "triggers" a system to dial numbers, the system still qualifies as an ATDS. The Court noted that Congress was targeting equipment that could "engage in automatic dialing, rather than equipment that operated without any human oversight or control." Thus, merely "flip[ping] the switch on an ATDS," does not qualify as human intervention, nor does human intervention occur when a human adds phone numbers to a dialing platform.

    What does this mean? Companies should still argue aggressively that human intervention is a necessary part of their telephone or texting system; however, systems that require minimal human intervention may satisfy the Marks definition of an ATDS within the Ninth Circuit.
  3. Capacity: One of the hot button issues is whether capacity means "present" or "potential." The Dominguez court (among others) found that it meant present. However, the Court here declined to "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."

    What does this mean? We continue to live in a world of uncertainty and doubt (at least in the Ninth Circuit), but we take it as a good sign that the Court did not speak to this issue. The trend has been present capacity and we are hopeful that the FCC will cement that in the future.
  4. Possible FCC action: The FCC is currently considering new interpretations of the TCPA in light of ACA International. If nothing else, Marks has raised the stakes of FCC action even higher. All eyes are on the FCC; many are expecting the FCC to issue its new interpretation after the mid-terms, perhaps by the end of the year.

Overall, the Court's opinion in Marks is a reminder that the TCPA is alive and well. Plaintiff's lawyers will continue to file litigation and companies will need to continue their strong efforts of TCPA compliance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions