Credit Card Issuer Wins Big ATDS Ruling in TCPA Suit Arising out of Debt Collection Calls

Hello everyone, Baroness here 🙂

A good ruling in the Kentucky District Court recently.

Here are the facts you need to know:

• On or about March 7, 2014, Plaintiff David Barnett applied for and received a FNBO credit card account.

• When applying for the account, Barnett provided his cellular number as way for FNBO to contact him.

• At some point, Barnett stopped making his minimum monthly payments.

As a result, FNBO began to contact him via telephone to discuss his missed payments.

Over a 7-month period, FNBO contacted Barnett via phone call, text message or prerecorded message 574 times—an average of 3.2 times a day (excluding Sundays)

Barnett alleged he instructed them to stop calling him.

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Of course, and as expected, Barnett filed a Complaint, alleging, amongst others, violation of the TCPA. FNBO moved for summary judgment arguing it did not use an Automatic Telephone Dialing System (ATDS) to make the calls.

The Court granted in part and denied in part. The Court granted FNBO’s motion as to all calls, except the 111 prerecorded calls and text messages, because…the court says they were not made using an ATDS as required under the TCPA and pursuant Facebook. Barnett filed a Motion for Reconsideration.

As a refresh, motions to reconsider may be treated as motions to alter/amend judgment under Federal Rule of Civil Procedure 59(e), which allows a party to file a motion to alter or amend a judgment within 28 days of its entry.

Specifically, in the Sixth Circuit, a district court has discretion to set aside a judgment under Rule 59(e) based on at least one of the following: (1) a clear error of law, (2) newly discovered evidence, (3) an intervening change in controlling law, or (4) a need to prevent manifest injustice.

The clear error of law standard is apparently really high. To show a clear error of law, a party must “establish not only that errors were made, but that these errors were so egregious that an appellate court would not affirm the judgment.”

Here, Barnett alleges the court failed to consider FNBO’s use of the TWX system in conjunction with the LiveVox system. Barnett contends that TWX AND LiveVox together make up an ATDS because LiveVox can and does store numbers randomly or sequentially generated by TWX daily. Does this argument look familiar?

The Court rejected this argument for two reasons. First, LiveVox is NOT an ATDS simply because it stores a randomly or sequentially generated listed of numbers from TWX on a daily basis. LiveVox, itself cannot store or produce numbers to be called using a random or sequential number generator.

Second, LiveVox is NOT an ATDS simply because it has a cooperative link to TWX. TWX and LiveVox are two separate systems that perform distinct tasks.

“To hold that LiveVox is an ATDS due to its tie with TWX would virtually subject a non-ATDS system/program to the TCPA because of its mere association with another separate system/program.”

Accordingly, the Court held Barnett failed to meet the clear error rule and denied its Motion for reconsideration.

Notice how the Court in Barnett did not include both LiveVox and TWX within the definition of “equipment”—but under Panzarella, decided just a few days later–both systems would be looked at together to determine if an ATDS was in use. Of course, under Panzarella merely using an ATDS is not enough—the Defendant would also have to be using the core functionalities of an ATDS to be liable under the TCPA. Its a distinction that potentially makes a big difference—and we’ll be talking all about it in our new Deserve to Win podcast episode out June 28, 2022.