Settlement Before a Supreme Court Ruling Creates Binding Precedent in the Ninth Circuit as to the Expansive Definition of an Autodialer Under the TCPA

On February 15, 2019, public reporting indicated that the parties in Crunch San Diego, LLC v. Marks (No. 18-995) reached an agreement to settle. After the Ninth Circuit endorsed an expansive definition of what constitutes an audodialer under the Telephone Consumer Protection Act (TCPA) in September 2018 (click here for further discussion), the defendant, Crunch San Diego, LLC, filed a petition for certiorari in the United States Supreme Court. While the contours of the agreement have not been disclosed, the parties’ decision to settle would extinguish the chance for the U.S. Supreme Court to rule on the issue that would possibly resolve the circuit split between the defendant-friendly definitions of an autodialer in the Second (King v. Time Warner Cable Inc., No. 15-2474) and Third (Dominguez v. Yahoo, Inc., No. 17-1243) Circuits and the plaintiff-friendly one in the Ninth Circuit. However, as it stands, the Ninth Circuit’s broad definition of an autodialer is now binding precedent among the district courts in that circuit.

From the defense bar’s perspective, the courts’ continued struggle with the definition, including those splitting within the same district, provide little clarity of what constitutes an autodialer. However, two forthcoming rulings may resolve these issues for TCPA practitioners. First, the Supreme Court will decide whether FCC rulings (including the FCC’s forthcoming ruling on the definition of an autodialer) are binding on federal courts under the Hobbs Act, which is set for oral argument on March 25, 2019 (PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., No. 17-1705). Second, the FCC issued two public notices requesting comments on the definition of an autodialer, once after the D.C. Circuit vacated the definition in March 2018, and a second in October 2018 after the Ninth Circuit’s decision in Marks. If the Supreme Court finds that district courts are bound by the Hobbs Act to follow FCC guidance, then the FCC’s forthcoming interpretation of an autodialer could effectively become the law of the land, which would, in effect, clear the circuit split.

TIP: As we advocated previously, this further shows why defendants faced with autodialer TCPA class action claims, including robocalls and text messaging campaigns, should carefully understand the seemingly ever-changing precedent of what constitutes an autodialer when crafting their defenses.