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7th Cir. Holds Defendant’s Phone System Was Not ATDS Under TCPA

office phoneIn a non-precedential ruling, the U.S. Court of Appeals for the Seventh Circuit recently affirmed a district court ruling finding that telephone calls placed to a pro se consumer’s cellular telephone number did not violate the federal Telephone Consumer Protection Act (TCPA) because the calls were placed manually, and not using an automatic telephone dialing system (ATDS).

In so ruling, the Seventh Circuit focused on the company representative’s declaration and the company’s call log establishing that the calls were initiated by a live representative, who made the calls by entering all numbers by hand.

A copy of the opinion in Wayne Norman v. AllianceOne Receivables Management, Inc. is available at:  Link to Opinion.

As you may recall, the TCPA defines an ATDS as equipment “which has the capacity – (a) to store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.”  See 47 U.S.C. 227(a)(1).

The TCPA prohibits any person within the United States, or any person outside the United States if the recipient is within the United States to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any ATDS or an artificial or prerecorded voice to any telephone number assigned to paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call.  Id. at 227(b)(1).

The Seventh Circuit began its analysis of the district court’s grant of summary judgment in favor of the defendant company and against the plaintiff consumer by examining the evidence presented by the consumer.

The plaintiff consumer cited to the company’s website, which advertises that its capabilities “include” ATDSs.  He also swore in a declaration that when he answered calls from the company, he heard a “pause,” “clicking,” and “dead air.” The consumer further referred to a guide from the Federal Communication Commission (FCC), which explains that use of an ATDS “often” results in “hang ups” and “dead air.”

The defendant company submitted a declaration from its vice president and a log of the calls to the consumer’s phone to show that the calls at issue were not placed using an ATDS.  The declaration stated that the company’s system used to call cell phones lacks the capacity to make calls using an ATDS, and that the system requires a live representative to enter all phone numbers by hand.

The district court granted summary judgment for the company. First, it considered and rejected the consumer’s objection to the company’s declaration. The consumer argued that because the executive did not place the calls to the consumer himself, he lacked personal knowledge of those calls.  However, the lower court held that the call records and the declaration were admissible evidence because the vice president was the “custodian of the records” and “familiar with the company’s recordkeeping practices.”

Therefore, the lower court held, even if the vice president did not make the calls to the consumer’s cell phone personally, he could swear to the company’s business records and practices.

By contrast, the lower court held that the consumer’s evidence was insufficient to create a genuine dispute of material fact.  The company’s website did not describe the practice for the calls made to the consumer.  And, the lower court also ruled the FCC’s guide was inadmissible hearsay; furthermore, even if admissible, it did not refute the company’s evidence that no call to the consumer was made using an ATDS.

On appeal, the consumer disputed the district court’s grant of summary judgment. The consumer argued that in accepting the vice president’s declaration and the call log over his own declaration about clicks and pauses and the FCC guide, the district court improperly weighed evidence, and did not view the consumer’s evidence in the light most favorable to him.

The Seventh Circuit disagreed and found that the district court’s evidentiary rulings were permissible. First, the Seventh Circuit held that the vice president’s declaration and the call logs were admissible – i.e., business records, such as the company’s call logs, are admissible when authenticated by a custodian. See Fed. R. Evid. 803(6); Woods v. City of Chicago, 234 F.3d 979, 988 (7th Cir. 2000).

The Seventh Circuit further found that the vice president was the custodian because he was familiar with the company’s record keeping practices, and he did not need to have personally made the calls to the consumer to testify about the meaning of the records. See Cocroft v. HSBC Bank USA, N.A., 796 F.3d 680, 686 (7th Cir. 2015); Thanongsinh v. Bd. of Educ., 462 F.3d 762, 775–77 (7th Cir. 2006).

Next, the Seventh Circuit found that the lower court did not abuse its discretion in excluding as hearsay the excerpt from the FCC guide about “dead air.” That excerpt, the Court held, does not fit into any of the relevant hearsay exceptions for public records: the excerpt does not describe the FCC’s activities, a matter that it observed, or its factual findings of an investigation. See Fed. R. Evid. 803(8)(A).

However, the Seventh Circuit noted that, even if an exception applied, the evidence was insufficient to create a fact dispute. The FCC guide said only that autodialers often produce dead air; it did not say the converse — that dead air means that a call was autodialed.

The Court noted that calls could be dropped or paused for many reasons; the FCC guide could therefore not tell a rational factfinder why the consumer experienced dead air or a pause on his calls. Finally, the Seventh Circuit held that no genuine fact dispute came from company’s website.  Instead, the Court noted, the website said only that the company’s capabilities include autodialers, but not that it used that capability always or even often, let alone in cases like the consumer’s.

The Seventh Circuit held that, with the call log showing that the company manually called the consumer, and no contrary evidence about those calls in the record, the district court correctly granted summary judgment, as no reasonable jury could conclude from this evidence that an ATDS was used to call the consumer. See Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 685 (7th Cir. 2013).

Accordingly, the Seventh Circuit affirmed the district court’s grant of summary judgment in favor of the company.

It is important to note that the plaintiff consumer in this case was not represented by counsel, and that the Seventh Circuit ruling is non-precedential.

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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