In Marks v. Crunch San Diego, LLC, No. 14-cv-00348 (S.D. Cal. Oct. 23, 2014), the Southern District California granted summary judgment in favor of Crunch San Diego, LLC (“Crunch”) in a putative class action alleging that Crunch sent text messages via an automatic telephone dialing system in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”).
Crunch operates gyms in San Diego, California, and several other states. Crunch uses a third-party web-based platform to send promotional text messages to current and prospective customers. Phone numbers could be entered into the platform by one of three methods: (1) by an employee of Crunch; (2) entered by an individual on a consent form on Crunch’s website; or (3) when an individual responded to a Crunch marketing campaign via text message. The system then stores these numbers in case Crunch wants to notify the individual of a later offer. The plaintiff, Jordon Marks, entered into a contract with Crunch for use of its gyms. Marks alleged that he received three unsolicited text messages from Crunch between November 2012 through October 2013 in violation of the TCPA. Marks filed suit against Crunch seeking to represent a class of similarly situated individuals.
The TCPA prohibits using an “automatic telephone dialing system” (“ATDS”) to make a call, including sending text messages, to a mobile phone without the prior express consent of the called party. An ATDS is statutorily defined as equipment that “has the capacity (A) to store or produce numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Crunch moved for summary judgment on the grounds that the platform it used to send text messages does not qualify as an ATDS under the TCPA because it lacks the capacity to store or produce telephone numbers to be called using a random or sequential generator.
Marks argued that, under a prior ruling from the Federal Communications Commission (“FCC”), the FCC broadly defined an ATDS as any equipment that has the “capacity to generate numbers and dial them without human intervention,” even if the numbers called were not in fact generated in such a manner. The District Court, however, rejected the FCC’s expansive view, and held that the FCC does not have the authority to expand the TCPA’s definition of an ATDS. The District Court noted that the TCPA only gave the FCC rulemaking authority over two subsections of the TCPA and, as the definition of an ATDS is in another section over which the FCC was not granted rulemaking authority, the FCC’s interpretation was not binding on courts and was contrary to the plain language of the statute. Indeed, the District Court noted that the FCC not only had no authority to expand the definition of an ATDS, but that the FCC’s definition would lead to an “absurd result,” because essentially all modern day devices would fall under the FCC’s definition.
The District Court also addressed a prior decision from the Ninth Circuit, Meyer v. Portfolio Recovery Assocs. LLC, 696 F.3d 943 (9th Cir. 2012), which discussed another FCC decision holding that a predictive dialer qualified as an ATDS because the equipment, “when paired with certain software,” also had the “capacity” to store or produce numbers in random or sequential order for dialing. The District Court dismissed the value of Meyer, noting that “challenges to the FCC’s authority” regarding the definition of an ATDS had been waived at the district court level in that case.
The Court reaffirmed its conclusion that “the FCC has no authority to modify or definitively interpret any language in § 227(a) of the TCPA” (where an ATDS is defined). Because the third-party platform used by Crunch did not meet the statutory definition of an ATDS as all numbers were manually entered by either Crunch employees or the called individuals themselves, Marks’s claim failed as a matter of law, and the District Court entered summary judgment in favor of Crunch.
