Multiple class actions have alleged violations of the Telephone Consumer Protection Act (TCPA) for use of automated dialing systems (auto-dialer). In a 2015 Order, the Federal Communications Commission (FCC) defined an auto-dialer under the TCPA to mean any device with the theoretical “capacity” to place autodialed calls, even if had the potential to be transformed into an auto-dialer. Importantly, the FCC’s definition was prospective and applied even if additional software was required. However, several recent cases have narrowed the scope of the definition of “auto-dialer,” creating a potential hurdle for plaintiffs and creating confusion about the viability of class actions that hinge on whether the marketing platforms used to send messages to consumers qualify as “auto-dialers.”
In March, in ACA International v. Federal Communications Commission, No. 15-1211 (D.C. Cir. Mar. 16, 2018), the D.C. Circuit limited the FCC’s 2015’s broad prospective definition of auto-dialer, stating that it would “subject ordinary calls from any conventional smartphone to the act’s coverage” and that the statute did not necessitate such a “sweeping swoop.” Instead, the court reasoned, the proper analysis of whether a device is an auto-dialer under the TCPA should turn on the capacity of a device to behave as an auto-dialer, as well as the amount of effort required to turn a device into an auto-dialer.
Early last week, an Arizona federal court echoed the D.C. Circuit’s analysis in ACA International. In John Herrick v. GoDaddy.com LLC, No. 2:16-cv-00254 (D. Ariz. May 14, 2018), the court granted summary judgment for GoDaddy.com in a proposed class action alleging TCPA violations stemming from allegedly unauthorized text messages. In software application company 3Seventy Inc. used a marketing platform to send advertising texts on behalf of GoDaddy, using a preprogrammed file or user-provided list – a fact that proved crucial to the court’s ruling that the application was not an “autodialer” because it “lacked the ability to store or produce numbers to be called with a random or sequential number generator.” The court also noted that the platform required human intervention to function in its as-is condition. Although it is possible that the 3Seventy Platform could be reprogrammed to have the capacity to autodial, a user would have to do much more than simply “press a button” to switch the platform into an item with autodialing capability. This defining characteristic – an ability to dial numbers without human intervention — was key to the GoDaddy court. “The court finds that undisputed material facts show that GoDaddy did not use an automatic telephone dialing system to send the text in question,” Judge Humetewa said, granting summary judgment to GoDaddy.
Despite recent case law narrowing the definition of an “auto-dialer” class actions related to cell phone marketing persist. This week, a national debt collector was hit with a putative class suit alleging that it violated the TCPA by placing unsolicited calls to cellphones using pre-recorded messages. In Gerstenhaber et al. v. Diversified Recovery Bureau LLC, No. 0:18-cv-6114 (S.D. Fla. 2018), plaintiff Daniel Gerstenhaber alleges that Diversified Recovery Bureau LLC left misleading pre-recorded messages on his cell phone on two occasions in March 2018 relating to debts incurred by another consumer, despite the fact that he never gave Diversified Recovery Bureau consent for the telemarketing calls, as required by the TCPA. By focusing on the company’s use of pre-recorded messages left without the recipient’s consent, Gerstenhaber attempts to sidestep the issue of whether the platform qualifies as an “autodialer” and avoid the need to allege a lack of human intervention by Diversified Recovery Bureau’s calling system. Gerstenhaber plans to represent a nationwide class of “unsuspecting parties” who received a prerecorded call on their cellphones by Diversified Recovery Bureau in the last four years, and seeks at least $500 in damages per violation. He also requests an injunction barring Diversified Recovery Bureau from using prerecorded messages to call cellphones without prior consent, along with statutory damages under the TCPA. Gerstenhaber alleges that Diversified “caused thousands of calls to be sent to the cellular telephones of plaintiff and class members, causing them injuries, including invasion of their privacy, aggravation, annoyance, intrusion on seclusion, trespass and conversion.” It is unknown whether Diversified Recovery Bureau’s system allowed messages to be left automatically or without human intervention, but after ACA International, this appears to be a crucial distinction to the courts.
In the wake of these recent cases, the FCC is now seeking public comment on several questions, including: (1) what constitutes an “automated dialing system,” with a specific emphasis on how to interpret capacity to store or produce numbers; (2) how should calls to reassigned telephone numbers be treated, and whether a one-strike safe harbor is appropriate; and (3) how a party may revoke consent to receive messages and what methods are appropriate. Comments are due by June 13, 2018. In the interim, businesses should evaluate whether any marketing platforms they use might qualify as an “automated dialing system” and whether they have proper processes in place to allow consumers to revoke consent to receive messages.