United States: Third Circuit Weighs In On Autodialer Taxonomy

D.C. Circuit Court decision has an impact

Squeezebox

The definition of what constitutes an autodialer under the Telephone Consumer Protection Act (TCPA) has expanded and contracted over the past few years. One case, Dominguez v. Yahoo, Inc., has been thoroughly kneaded by those changes since 2013.

The original case concerned texts – 50 or 60 a day, according to plaintiff Bill Dominguez – that were sent to a phone he purchased in late 2011 with a reassigned number that had belonged to someone who had subscribed to the service. When he called Yahoo to ask that the texts stop, the company advised that the original owner of the telephone would need to access his or her Yahoo account to unsubscribe from the texts. Dominguez claims that he told Yahoo representatives that he did not know the whereabouts of the original owner. "So sue me," one Yahoo employee allegedly said.

Be careful what you wish for ...

Summaries

Dominguez sued Yahoo for violations of the TCPA in April 2013 before the Eastern District of Pennsylvania. A year later, the court granted summary judgment to Yahoo, agreeing with the company that the text service to which the original phone owner had subscribed was not an autodialer under statute because it did not "use a random or sequential number generator to store or produce telephone numbers and then send a text message to those numbers."

Dominguez appealed, and in October 2015 the U.S. Court of Appeals for the 3rd Circuit overturned the ruling and sent the case back to the district court. The rationale? A recent ruling from the Federal Communications Commission (FCC) had widened the autodialer definition under the TCPA, defining equipment that is "part of a 'system' that has the latent 'capacity' to place autodialed calls" as an autodialer.

On remand, the court granted Yahoo's renewed request for summary judgment, holding that under a standard of "present capacity" (which governed communications law when the suit was filed), the Yahoo system did not qualify as an autodialer under the TCPA. Relying on FCC commissioner dissents, the court maintained that the 2015 FCC ruling defined capacity in such a broad manner that it was unclear whether a line could be drawn between an autodialer and many other technologies; for instance, smartphones or email SMS services, even without loaded autodialer software, would qualify under the new definition.

Dominguez appealed again in January 2017. But in the interim, a separate D.C. Circuit Court ruling limited the FCC's 2015 ruling, pinching the definition of an autodialer by excluding systems with a mere theoretical capacity to place autodialed calls.

The Takeaway

In a precedential decision, the 3rd Circuit affirmed the second motion for summary judgment, maintaining that the D.C. Circuit ruling "narrowed the scope of the appeal" and that Dominguez had failed to prove that Yahoo's system was an autodialer under the new, narrowed definition. The 3rd Circuit panel found that Dominguez had again fallen short of his burden to prove that Yahoo had used an autodialer. The court stated that "notably absent" from the expert reports provided by Dominguez was "any explanation of how the email SMS service actually did or could generate random telephone numbers to dial." The record indicated that "those messages were sent precisely because the prior owner of Dominguez's telephone number had affirmatively opted to receive them, not because of random number generation." By silencing this long-running dispute, the 3rd Circuit's decision demonstrates the impact of the D.C. Circuit's trim of the FCC's 2015 ruling.

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