Courts Continue to Reject FCC’s Pre-2015 ATDS Rulings in Light of ACA International

In Johnson v. Yahoo!, Inc., No. 14-2028 (N.D. Ill.), the plaintiff alleged that Yahoo! violated the TCPA by automatically texting her after pulling her number from a database of stored numbers. The trial court initially denied Yahoo!’s motion for summary judgment because—based on FCC decisions from 2003, 2008 and 2012—it believed that there were genuine issues of material fact regarding whether the dialing equipment qualified as an ATDS. During the pendency of the case, however, the FCC issued its 2015 Declaratory Ruling & Order, which, as our regular readers well know, was appealed to and eventually rejected by the D.C. Circuit. 

In light of the D.C. Circuit’s decision in the ACA International appeal, Yahoo! asked the trial court in Johnson to reconsider its denial of its motion for summary judgment. The plaintiff opposed that request by arguing—as other plaintiffs have taken to doing—that the D.C. Circuit had only set aside the FCC’s treatment of ATDS in its 2015 Order, and thus had not set aside the earlier rulings on which the district court had relied.

The trial court disagreed with the plaintiff. It explained that, “[a]lthough [the D.C. Circuit’s] jurisdiction was based on direct-review petitions from the 2015 order, the court’s ruling encompassed a review of all ‘pertinent pronouncements’ by the      FCC . . . .  In the end, the [D.C.] court set aside the agency’s ‘treatment’ of the qualifying functions of an ATDS, … and it wiped the slate clean.” In fact, the court noted, “the 2015 FCC Order [itself] ‘reaffirmed’ its earlier orders…which brought the entire agency definition of ATDS up for review in the D.C. Circuit.” Since the district court had denied Yahoo! summary judgment based on those earlier agency interpretations of ATDS—interpretations that were now replaced with ACA International’s narrower definition of ATDS—reconsideration of that denial was more than justified.

The court then went on to hold that Yahoo! was in fact entitled to summary judgment. Yahoo!’s messaging system dialed from a stored list of numbers—not randomly generated numbers—and in fact was not capable of generating random numbers to be dialed. According to the court, such “[c]urated lists developed without random or sequential number generation capacity fall outside the statute’s scope.” Accordingly, Yahoo! was entitled to judgment in its favor as a matter of law.

This decision highlights that courts are increasingly—and in our view, correctly—adopting the view that the ACA International decision invalidated more than just the FCC’s 2015 Order.