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Court Determines that Manually Dialed Call on a System With ATDS Capabilities May Violate the TCPA

a locked laptop

Sat, 08/31/2019 - 13:45

The Western District of Virginia court delivered a shocking ruling in a new case that may have significant Telephone Consumer Protection Act (TCPA) consequences for any marketers who use calling systems with autodialing capabilities. The decision in this case, Morgan v. On Deck Capital, Case No. 3:17-CV-00045, 2019 U.S. Dist. LEXIS 147757 (W.D. Va. Aug. 29, 2019), comes as the result of the court making an exceptionally broad interpretation of the statutory definition of an Automatic Telephone Dialing System (ATDS).

The case revolves around circumstances in which an agent working for the defendant—a company that calls companies that may be interested in small business loans—called the plaintiff, a small business owner. The defendant demonstrated without issue that the call in question was manually dialed by its agent. However, the court seized on other aspects of the defendant’s calling system, unrelated to the offending call itself, to deny the defendant’s motion for a summary judgement.

The agent who placed the call did so using an aspect of the defendant’s dialing system called “Manual Touch Mode,” which does not meet an existing definition of an ATDS under the TCPA. However, two of the defendant’s other departments use Five9’s Virtual Calling Center system. This system has modes such as “Power Mode,” “Progressive Mode,” and “Predictive Mode,” all of which meet the court’s statutory definition of an ATDS as something that has the capacity to store and automatically dial phone numbers that it generates either randomly or sequentially. The shocking part of the ruling comes from the fact that the defendant thoroughly demonstrated that the agent did not use any of these ATDS modes to place the call and would not have been capable of doing so.

The call at issue in this case was made from an agent in the defendant’s sales department, which only has access to the aforementioned “Manual Touch Mode” and a “Preview Mode” that also does not meet the definition of an ATDS. Moreover, the “Manual Touch Mode” uses separate hardware, separate software, a separate server, separate settings, and separate administration from the other modes. These other modes also require log-in information and levels of permission not available to the agent who made the call.

Despite acknowledging that the call was placed from the “Manual Touch Mode,” the court denied the defendant’s motion because the “Manual Touch Mode” was one domain in a larger system that contained modes that meet the statutory definition of an ATDS. The court accepted the plaintiff’s argument that the defendant gave nearly identical laptops for accessing the cloud-based dialing system to employees from multiple departments with access to multiple modes, it is technically possible for a sales agent to access these other modes should they be provided with the appropriate log-in information. Of course, there is no evidence that the particular agent in this call had that information. But the mere theoretical possibility that a sales department agent could access the ATDS modes was apparently a compelling argument.

It is worth noting that this is not the final decision in this case and any calls for alarm may be premature. But there is still the possibility of a very dangerous precedent being set. This case bears further watching.