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Espejo v. Santander Consumer USA, Inc.

United States District Court, N.D. Illinois, Eastern Division

June 12, 2019

HENRY ESPEJO, individually and on behalf of all others similarly situated, Plaintiff,
v.
SANTANDER CONSUMER USA, INC., an Illinois corporation, Defendant. FAYE LEVINS, individually and on behalf of all others similarly situated, Plaintiff,
v.
SANTANDER CONSUMER USA, INC., an Illinois corporation, Defendant.

          MEMORANDUM OPINION

          Charles P. Kocoras, United States District Judge.

         Now before the Court is Defendant Santander Consumer USA, Inc.'s (“Santander”) renewed motion for summary judgment pursuant to Federal Rule of Civil Procedure 56.1 and motion for reconsideration. For the following reasons, the Court denies the Defendants' motions.

         BACKGROUND

         The underlying facts in this case are detailed in our prior opinion, [1] and the Court provides only a brief restatement based on undisputed facts from the record. Plaintiffs Henry Espejo (“Espejo”) and Faye Levins (“Levins”) (collectively, “Plaintiffs”) each brought class action suits against Defendant Santander for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., actions which have since been consolidated. These claims arose when Santander utilized its Aspect Telephone System (“Aspect”) to make calls to the Plaintiffs regarding outstanding auto loans. Santander utilizes Aspect in combination with a customer account management system called “My Supervisor.” The company uses “My Supervisor” to generate a customer list and then uploads the list into Aspect.

         Aspect has a dialer feature that dials phone No. from a customer list using an algorithm to efficiently match available customer service agents to answered calls. The dialer only makes calls once a customer service agent logs-in and presses a button to indicate that they are available.

         On April 21, 2016, Santander filed a motion for summary judgment, partially on the grounds that Aspect's dialer feature did not constitute an automatic telephone dialing system (“ATDS”), which is an essential element of the Plaintiffs' TCPA claim. That same day, Santander moved the Court to stay the proceedings until the D.C. Circuit issued its ruling in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018), a consolidated action that considered the validity of the Federal Communications Commission (“FCC”) rulemaking regarding the TCPA. On October 14, 2016, the Court denied Santander's motions, but stated that it would “revisit any issues affected by [the ACA International] decision as needed, at any time before the trial in this case.”

         On March 16, 2018, the D.C. Circuit issued its ruling in ACA International. Based on the decision, Santander renewed its motion for summary judgment on and moved the Court to reconsider its initial denial.

         LEGAL STANDARD

         In considering a motion for summary judgment, the Court construes all facts and draws all reasonable inferences in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue of material fact arises where a reasonable jury could find, based on the evidence of record, in favor of the non-movant. Anderson, 477 U.S. at 248. In ruling on a motion for summary judgment, the Court considers the “record as a whole.” Morgan v. Harris Trust & Sav. Bank of Chi., 867 F.2d 1023, 1026 (7th Cir. 1989).

         When a court denies a motion for summary judgment, “the denial…has no res judicata effect, and the district court may, in its discretion, allow a party to renew a previously denied summary judgment motion….” Whitford v. Boglino, 63 F.3d 527, 531 (7th Cir. 1995). “A renewed or successive summary judgment motion is appropriate especially if one of the following grounds exists: (1) an intervening change in controlling law; (2) the availability of new evidence or an expanded factual record; and (3) need to correct a clear error or prevent manifest injustice.” Id. (internal quotation marks omitted).

         A motion for reconsideration is appropriate where “the Court has patently misunderstood a party, or … [there has been] a controlling or significant change in the law or facts since the submission of the issue to the Court.” Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.3d 1185, 1191 (7th Cir. 1990).

         DISCUSSION

         To contextualize the contested issues in this case, the Court must walk through the relevant statutory, administrative, and judicial history of the TCPA. As pertinent here, the TCPA prohibits using an ATDS to call a telephone number assigned to a cellular telephone service. 47 U.S.C. § 227(b)(1)(A)(iii). 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.” 47 U.S.C. § 227(a)(1). Given the FCC's “authority to promulgate regulations implementing the TCPA, ” the FCC issued an order in 1992 that “adopted, without elaboration, the statutory definition of [an] ATDS.” Pinkus v. Sirius XM Radio, Inc., 319 F.Supp.3d 927, 929 (N.D. Ill. 2018).

         In 2003, the FCC expressed concern that “[t]he marketplace for telemarketing has changed significantly in the last decade.” In Re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Rcd. 14014, 14021 (2003). Specifically, the FCC noted the advent of the predictive dialer, which is “an automated dialing system that uses a complex set of algorithms to automatically dial consumers' telephone numbers in a manner that ‘predicts' the time when a consumer will answer the phone and a telemarketer will be available to take the call.” Id. at 14022 n.31.

         Since the widespread adoption of predictive dialer technology, it has been disputed whether such systems fit within the definition of an ATDS. The FCC summarized the debate, saying:

Most industry members that commented on the issue of autodialed calls argue that predictive dialers do not fall within the statutory definition of “automatic telephone dialing system, ” primarily because, they contend, predictive dialers do not dial numbers “randomly or sequentially.” Rather, they state that predictive dialers store pre-programmed numbers or receive numbers from a computer database and then dial those numbers in a manner that maximizes efficiencies for call centers. Most consumers and consumer groups maintain that predictive dialers are autodialers; that to distinguish technologies on the basis of whether they dial randomly or use a database of numbers would create a distinction without a difference. They argue that for the recipient of the call, there is no difference whether the number is dialed at random or from a database of numbers.

Id. at 14090-91. Essentially, the disagreement turns on whether an ATDS needs to dial numbers produced “randomly or sequentially” or whether those numbers can be automatically dialed from a pre-existing list.

         To clarify which of the competing views was correct, the FCC promulgated additional rules regarding the definition of an ATDS in 2003 (“2003 Order”). The FCC determined that a predictive dialer did fall within the definitional scope of an ATDS, stating:

We believe the purpose of the requirement that equipment have the “capacity to store or produce telephone numbers to be called” is to ensure that the prohibition on autodialed calls not be circumvented. Therefore, the Commission finds that a predictive dialer falls within the meaning and statutory definition of “automatic telephone dialing equipment” and the intent of Congress.

Id. at 14092-93. In adopting the consumer groups' position, the FCC established that a dialing system is still considered an ATDS even if it dials phone numbers from a preexisting list. The FCC affirmed this position in its 2008 rules and regulations (“2008 Order”). In the Matter of Rules & Regulations ...


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