On January 28, Crunch Fitness filed a petition for writ of certiorari in the U.S. Supreme Court, asking the Court to overturn the Ninth Circuit’s decision in Marks v. Crunch San Diego.  Crunch contends that the Ninth Circuit rewrote the definition of an automatic telephone dialing system (“ATDS”) and contradicted the plain text and purpose of the Telephone Consumer Protection Act.  The petition argues that the Ninth Circuit’s definition of an ATDS omits the statutory requirement that a telephone system use a random or sequential number generator to qualify as an ATDS in favor of a consumer-friendly definition at odds with the D.C. Circuit’s ACA International opinion, and creates a circuit split. 

Background 

The plaintiff, Jordan Marks, signed up for a gym membership with Crunch Fitness in 2012.  Over an eleven-month period, he received three text messages from the gym, which Marks contends did not have prior express consent to contact him.  Crunch uses the “Textmunication” system, a web-based marketing platform designed to send promotional text messages to a list of stored telephone numbers, which can be input manually or automatically.  After a Crunch employee logs into the Textmunication system, selects the phone numbers, and generates the content, the system sends the text messages to selected phone numbers. 

Marks filed a putative class action against Crunch Fitness in 2014, alleging violations of the TCPA.  The district court granted summary judgment in Crunch’s favor, contending that its system did not qualify as an ATDS because it did not have the capacity to randomly or sequentially generate numbers and then dial those numbers.   

On September 21, 2018, the Ninth Circuit reversed the district court’s decision.  The Court began by discussing the intent and purpose behind the TCPA, noting that much of what was written in 1991 related to the technology at the time.  The Court then addressed the D.C. Circuit’s decision in ACA International v. FCC, 885 F.3d 687, 695 (D.C. Cir. 2018), where the D.C. Circuit overturned the FCC’s 2015 Order and the agency’s definition of an ATDS.  According to the Court, the D.C. Circuit’s vacatur of the FCC’s interpretation of what qualified as an ATDS left only the statutory definition as guidance.  However, the Court quickly concluded that the statutory text was confusing and ambiguous, making way for an expansive definition that includes devices with the capacity to dial stored numbers automatically.  This definition thus approximates that of the 2015 Order, which the D.C. Circuit expressly rejected in ACA International. 

Crunch’s Appeal 

Crunch frames its appeal as “[w]hether the Ninth Circuit erred in expanding the TCPA’s definition of ‘automatic telephone dialing system’—in acknowledged conflict with the third Circuit and in stark tension with the D.C. Circuit—to encompass any device with capacity merely to dial stored telephone numbers.”  Crunch contends that the Third Circuit’s decision in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018)—where the court affirmed that the defendant’s SMS service was not an ATDS because it did not have present capacity to function as an autodialer—adheres more closely to the statutory text and to the D.C. Circuit’s ACA International opinion, meaning the Ninth Circuit has created a circuit split.  Crunch also argues that the Ninth Circuit’s broadened definition of an ATDS expands the TCPA far beyond its statutory purpose.  According to Crunch, the expanded concept of an ATDS “massively increases exposure under the TCPA—not only for businesses facing over 4,000 TCPA suits each year . . ., but for over 300 million smartphone users when sending everyday texts or making calls … .” 

Outlook 

Though Marks created a circuit split and arguably does not conform to the reasoning set forth in ACA International, Crunch may face an uphill climb to get their arguments before a TCPA-fatigued Supreme Court.  The Court has issued two major opinions on TCPA cases in the past seven years (Mims v. Arrow Financial Services, LLC and Campbell-Ewald Co. v. Gomez) and recently granted certiorari in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., meaning the justices may be less inclined to hear Crunch’s appeal. 

However, the Federal Communications Commission is considering issuing broad new guidance on the TCPA, which could be contrary to the Ninth Circuit’s position in Marks.  If that occurs, then the legal system – at least in the Ninth Circuit – will have to decide whether the FCC’s rules trump its judicial interpretations.