E.D. Michigan Excludes Plaintiff’s Expert Report, Then Finds That ACA Int’l Vacated All Prior FCC Rulings on ATDS Functionality

It’s hard to keep track of developments on ATDS functionality these days, as week-by-week we’ve had courts across the country coming out on different sides of this raging debate. Last week was no different, and we have a nice ruling out by Judge Gershwin A. Drain of the Eastern District of Michigan in which he excluded an expert report submitted by Jeff Hansen, then went on to hold that the D.C. Circuit had completely “set aside the [FCC’s] declarations regarding the capacity and functions of an ATDS,” in ACA Int’l. Keyes v. Ocwen Loan Servicing, No. 17-cv-11492, 2018 U.S. Dist. LEXIS 138445, at *15 (E.D. Mich. Aug. 16, 2018).

The court in Keyes started by tossing out the report of Plaintiff’s expert Jeff Hansen, in which Hansen had opined that the Defendant’s Aspect dialing system was an ATDS. The court provided two reasons. First, Hansen’s opinion was unreliable because he never actually tested or inspected an Aspect system, let alone the Aspect system used to call Plaintiff. The Plaintiff tried to get around this fact by pointing out that Hansen had “analyzed” an Aspect dialer in other cases. But the court quickly rejected the argument after scratching its surface, finding that Hansen never inspected or tested any Aspect system in those cases either, but had instead reviewed manuals, declarations, and other discovery materials. Next, the court found that Hansen wasn’t in a position to provide a legal opinion on whether the Aspect system was an ATDS. Specifically, it found this aspect of his opinion was “improper” because “expert witnesses are not permitted to make legal conclusions,” and Hansen had therefore “wrongly include[d] statements and conclusion of law,” in his report.

The court then turned its attention to the issue of ATDS functionality, and examined the impact of ACA Int’l on all the FCC’s prior rulings on the issue. The court squarely held that the D.C. Circuit had “set aside” the FCC’s “rulings” (note the use of plural) regarding “the functions an autodialer must be able to perform, namely its interpretation of whether a device needed to be able to generate and call random or sequential numbers to constitute an ATDS.” And hence the FCC’s “definition of the functions necessary for a device to constitute an autodialer,” had been “vacated” as a result of ACA Int’l.

The court also rejected the Plaintiff’s argument that ACA Int’l had “no impact” on the FCC’s prior 2003, 2008, and 2012 rulings. It found this argument had already been “explicitly rejected” by the D.C. Circuit in ACA Int’l when it held that the FCC’s “pertinent pronouncements,” were not “shield[ed] . . . from review,” because the rulings – which had been reaffirmed in 2015 – still “left significant uncertainty about the precise functions an autodialer must have the capacity to perform.”

Based on its findings, the court “reach[ed] back to the statutory language of an ATDS,” (i.e. dialing randomly or sequentially generated numbers) to determine whether the Defendant’s Aspect system qualified as one. It first found the system did not have the “capacity” to perform those statutorily enumerated functions because it took more than a “flip of the switch,” to alter the Aspect system to perform those functions. The Defendant presented evidence that – while this modification was theoretically possible – it would require alteration of the system’s source code, which Defendant didn’t have access to in any event. The court then found that the Aspect system did not possess the functions necessary to be an ATDS because “[t]he Aspect System dials from a set list, but that is not the same as dialing numbers using a random or sequential number generator.” Notably, this is the opposite of the conclusion reached in the pair of cases from New Jersey we reported on last week. But it is perfectly consistent with the pair of cases from the week before. 

And at this point, this is life in TCPAland. As we’ve said before, until the FCC steps in to settle this issue once and for all (we hope), we’ll likely keep seeing these sorts of inconsistent outcomes break on a week-by-week basis. But thanks to Keyes ruling, we can (probably) consider this one of the good weeks.

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