Does the TCPA Have Nine Lives? Parties Settle Ninth Circuit Appeal in Marks v. Crunch San Diego
Posted: Thu Dec 26, 2024 6:11 am
The Telephone Consumer Protection Act (“TCPA”) carries the risk of annihilative damages for class action defendants based on its remarkable statutory damages scheme. Because of this risk, the statute has been the subject of significant court and agency attention recently. And much of this attention – from the D.C. Circuit’s opinion in ACA International to the Federal Communication Commission’s (“FCC”) upcoming ruling – has been aimed at limiting the TCPA’s reach. Some in the industry hoped that the next nail in the TCPA’s coffin (after the impending FCC decision and PDR case) would be the United States Supreme Court agreeing to review the Ninth Circuit’s recent decision in Marks v. Crunch San Diego, which advanced a controversial interpretation of the statute’s reach. Now, we can all put our hammers away for a while because Marks has settled according to a recent report from ACA International.
Although the settlement prevents Supreme Court 99 acres data review, the impact of the ruling in Marks is by no means certain. In the coming months, the industry expects the FCC to issue rules that may contradict Marks. If that occurs, courts in the Ninth Circuit will be forced to confront a conflict between Marks and the FCC, which may ultimately percolate up to the Ninth Circuit again. At this point, only one thing is clear – the Marks decision will survive for another day as authority for interpreting the TCPA in federal courts in Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington.
Background of the Marks Case
Jordan Marks signed up for a gym membership with Crunch Fitness. 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 a “Textmunication” system, which is 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.
Based on these text messages, Marks filed a putative class action against Crunch in 2014, alleging violations of the TCPA. The district court granted summary judgment in Crunch’s favor, holding that its system did not qualify as an Automatic Telephone Dialing System (“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. In its decision, the Court took an exceptionally broad view of what constitutes an ATDS. This decision was contrary to precedent in several other circuits, including the Third Circuit and D.C. Circuit. On October 30, 2018, the Ninth Circuit denied a petition for rehearing en banc.
Although the settlement prevents Supreme Court 99 acres data review, the impact of the ruling in Marks is by no means certain. In the coming months, the industry expects the FCC to issue rules that may contradict Marks. If that occurs, courts in the Ninth Circuit will be forced to confront a conflict between Marks and the FCC, which may ultimately percolate up to the Ninth Circuit again. At this point, only one thing is clear – the Marks decision will survive for another day as authority for interpreting the TCPA in federal courts in Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington.
Background of the Marks Case
Jordan Marks signed up for a gym membership with Crunch Fitness. 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 a “Textmunication” system, which is 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.
Based on these text messages, Marks filed a putative class action against Crunch in 2014, alleging violations of the TCPA. The district court granted summary judgment in Crunch’s favor, holding that its system did not qualify as an Automatic Telephone Dialing System (“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. In its decision, the Court took an exceptionally broad view of what constitutes an ATDS. This decision was contrary to precedent in several other circuits, including the Third Circuit and D.C. Circuit. On October 30, 2018, the Ninth Circuit denied a petition for rehearing en banc.