California State Court Holds That Equipment That Lacks Present Capacity to Use Random or Sequential Number Generator Is Not an ATDS

A few weeks ago we wrote about Hunt v. 21st Mortgage Corp., 2013 WL 5230061 (N.D. Ala. Sept. 17, 2013), in which the United States District Court for the Northern District of Alabama took a narrow view of what qualifies as an automatic telephone dialing system (“ATDS”) under the TCPA.  That definitional issue has been hotly contested because calls that do not use an ATDS do not need prior express consent.  (Our prior summary of the issues and the Hunt decision is available here.)

A state court in California recently followed Hunt.  In Stockwell v. Credit Management, L.P., No. 30-2012-00596110-CU-NP-CXC (Super. Ct. Orange Cty., Cal.) (Bauer, J.), the Superior Court of Orange County granted the defendant’s motion for summary adjudication on an individual plaintiff’s TCPA claim because it concluded that the defendant had not used an ATDS.  After finding the statutory language unambiguous, the court held that the defendant’s equipment did not qualify as an ATDS because the equipment “does not have a number generator” and thus did not “ha[ve] the capacity” to use a number generator at the time the calls were placed:

Here, the TCPA defines an 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.”  42 U.S.C. § 227(a)(1).  Thus, the use of a number generator is required in order for CMI’s calling technology to be considered an ATDS.

Defendant submitted [a declaration] to support its contention that CMI’s calling technology does not have a number generator.  Plaintiff failed to offer any evidence in rebuttal.  Thus, the uncontroverted evidence presented is that CMI’s calling technology does not have a number generator.  Therefore, CMI’s calling technology does not meet the requirements of an ATDS as defined by the TCPA.

Stockwell, slip op. at 2-3 (emphasis in original) (citing Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009)).  Having found that the defendant’s equipment did not qualify as an ATDS, the court did not reach whether the plaintiff had consented to the calls and then entered summary adjudication in favor of the defendant.  See id. at 3.

Although it did not cite them, the court’s decision sides with Hunt and rejects Nelson v. Santander Consumer USA, Inc., No. 11-0307, 2013 U.S. Dist. LEXIS 40799 (W.D. Wis. Mar. 8, 2013), which interpreted the term ATDS as including not only equipment that “has the capacity” to use a random or sequential number generator at the moment the calls were placed, but also equipment that could conceivably have such a capacity if it were modified at some later date.  With Hunt and now Stockwell, defendants can cite two decisions that apply much needed common sense to this important issue—a number that will hopefully grow as other courts continue to confront this question.

A copy of the Stockwell decision is available here.

Michael P. Daly

About the Author: Michael P. Daly

Mike Daly has spent two decades defending, counseling and championing clients that interact with consumers. His practice focuses on defending class actions, handling critical motions and appeals, and maximizing the defensibility of marketing and enforceability of contracts. Clients large and small have trusted him to protect their businesses, budgets and brands in complex cases across the country.

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