Court Denies Summary Judgment to Law Firm Collecting Debt Using LiveVox

In the Seventh Circuit Court of Appeals footprint (including Indiana), a system must randomly or sequentially generate numbers and dial them in order to qualify as an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA). But you’d never know it reading the decision in Friend v. Taylor Law (N.D. Ind. Dec. 18, 2020).

In Friend, a court denied summary judgment to a law firm that was collecting a debt owed to its client. The law firm’s representative testified that it used the LiveVox system but wasn’t sure how it worked. He testified that he “believed” the system lacked the capacity to dial automatically as a predictive dialer. The Court found that the Defendant’s belief regarding the system’s ability to dial automatically was insufficient to merit summary judgment and instead decided to send the issue to the jury.

So what’s wrong with that?

Well, just about everything.

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In the first place, it is Plaintiff’s burden to prove ATDS usage. Once a Defendant challenges ATDS usage at the motion for summary judgment phase, it is the Plaintiff’s burden to come forth with evidence sufficient to raise a jury question on the issue. The Defendant’s equivocal testimony may not be sufficient to prove the lack of ATDS usage, but it is certainly — especially standing alone — insufficient to prove that a system with the capacity to operate as an ATDS was used. So there was no triable issue created. So the Defendant should have won.

Aside from the procedural misstep, there is a clear disconnect here with respect to the substantive law. Again, under Gadelhak, it does not matter if a system can call “automatically” or not. What matters is whether the system has the capacity to dial randomly or sequentially. Yet the Friend court never analyzed that issue and seemed to assume that any automated dialing is sufficient to trip the statute. As the Friend court summarized the law, an ATDS is “equipment which has the capacity” to store and dial numbers in certain ways.

Umm, yeah. But those “certain ways” an ATDS must dial are not merely “automatically” but rather “using a random or sequential number generator.” The Court nonetheless concludes that the evidence is unclear on whether “[Defendant’s] agents make calls with software capable of automated dialing…” and denies judgment to the defendant.

The Friend case is a true outlier. The focus was on the wrong substantive determination and the evidentiary burden was placed on the wrong party.