Eighth Circuit Finds That System That Sends Texts to Stored Numbers is Not an ATDS, Rejects Plaintiffs’ Interpretation of Footnote 7 in Facebook v. Duguid

Last week, the Eighth Circuit affirmed a finding that a dialing system does not qualify as an ATDS if it randomly selects numbers from a stored list. See Beal v. Truman Road Dev. (8th Cir. Mar. 24, 2022). The decision explains that dialing equipment is not an ATDS if it does not produce those numbers (either randomly or sequentially) in the first place, and is notable for flatly rejecting a misreading of Facebook v. Duguid that plaintiffs have been peddling for nearly a year now.

The court’s analysis turns on the mechanics of the dialing system and plain language of the statute. The defendants were drinking establishments that use the “Txt Live” platform to send promotional text messages to numbers that were manually entered by the defendant’s employees. Specifically, the platform allowed employees to filter down to a target list of recipients based on demographic factors, select the number of potential customers to receive the message, draft or select the content of the message, and then send messages to designated recipients. To do so, it “shuffles the target contacts using a numerically based randomizer. If the number of people who meet the filtered criteria exceed the number of people to whom the message will be sent, Txt Live selects the recipients at the top of the randomized list first.” Id. at 3.

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Personal Cell Phones May Qualify as “Residential Telephones” Subject to DNC Rules, but Calls Made to a Pre-produced List Are Not ATDS Calls, Texas Northern District Holds

Last week, the U.S. District Court for the Northern District of Texas held that mobile phones may qualify as “residential telephones” when used (as the Complaint alleged) primarily for “personal, family, and household use,” and thus be subject to the TCPA’s do-not-call rules (47 C.F.R. §§ 64.1200(c) & (d)).  This issue has sewn disharmony among federal district courts and may draw attention from higher courts.  But the court also joined the growing number of courts following Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), that have agreed that calls specifically directed to persons on a pre-produced list (like plaintiff) are not calls made using a “random or sequential number generator” and thus are not subject to the TCPA’s prior express consent requirement for calls made using an ATDS.

In Hunsinger v. Alpha Cash Buyers, LLC, 3:21-cv-1598-D, 2022 WL 562761 (N.D. Tex. Feb. 24, 2022), the plaintiff alleged that, over the course of last year, he received eight unsolicited phone calls and six SMS text messages on his cell phone from a number he didn’t recognize.  Hunsinger picked up one of the calls and spoke with a representative for the defendant, to whom Hunsinger gave his email address.  Hunsinger subsequently received several calls and texts from the defendant referring to Hunsinger’s conversation with the representative and asking if he was still interested in a transaction.  These calls and texts were sent using an ATDS, Hunsinger alleged.  At all relevant times, Hunsinger’s number was on the national DNC list.  Id. at *1.

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Northern District of California Confirms That Assigning “Random or Sequential IDs” to Previously Generated Numbers Is Not Autodialing

In the wake of the Supreme Court’s April 2021 Facebook v. Duguid decision, plaintiffs prosecuting class actions across the nation have been searching hard to mine other potential ambiguities in the TCPA to support allegations about the use of an ATDS. One area of focus has been on whether that term – which is defined as equipment that can “store or produce telephone numbers to be called, using a random or sequential number generator” – applies to equipment that assigns random or sequential identifiers to stored numbers that were not randomly or sequentially generated.

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District Courts Find ATDS Allegations Implausible Following Facebook

Courts in the Southern District of California and District of Arizona recently added to the line of decisions addressing ATDS pleading requirements in the wake of the Supreme Court’s landmark ruling in Facebook v. Duguid.  Declining to infer that targeted text messages warranted an inference that the sender used an ATDS, the courts in Wilson v. rater8, LLC, et al., No. 20-cv-1515, 2021 WL 4865930 (S.D. Cal. Oct. 18, 2021), and DeClements v. Americana Holdings LLC, No. CV-20-00166-PHX-DLR, 2021 WL 5138279 (D. Ariz. Nov. 4, 2021), dismissed plaintiffs’ complaints for failure to sufficiently allege the use of an ATDS.

In Wilson v. rater8, the plaintiff filed a class action alleging that defendants violated the TCPA by sending him, after a medical examination, a text asking him to provide feedback regarding his examining physician.  2021 WL 4865930.  The plaintiff alleged that the text was sent using an ATDS.  The court granted defendants’ motion to stay pending the outcome of the Supreme Court’s decision in Facebook.  Following that ruling, defendants moved to dismiss, arguing that plaintiff did not allege sufficient facts to support the claim that an ATDS was used.

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Sixth Circuit rejects Creasy line of cases, holding TCPA claims arising between November 2015 and July 2020 are viable

The Sixth Circuit recently became the first federal court of appeals to weigh in on whether plaintiffs can bring TCPA claims for conduct occurring between November 2015 and July 2020—the respective dates on which the unconstitutional government debt exception was passed and the Supreme Court’s decision in Barr v. AAPC declared it unconstitutional and severed it from the statute. Some district courts, such as the District of Louisiana in Creasy v. Charter Communications, Inc., 2020 WL 5761117 (E.D. La. Sept. 28, 2020), have concluded plaintiffs cannot—reasoning that the TCPA was void while an unconstitutional provision was part of it. As covered in our prior posts, district courts have come down on both sides of the issue—leading to significant confusion.

Enter the Sixth Circuit’s decision in Lindenbaum v. Realgy, LLC, No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021), which considered the Chief Judge of the Northern District of Ohio’s decision that dismissed a putative class action arising from prerecorded calls.

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FCC TCPA Actions Mid-Year Review

After adopting orders reflecting the majority of implementation deadlines set by the TRACED Act and the Supreme Court’s highly anticipated TCPA decision interpreting the statutory definition of automatic telephone dialing system in the first half of 2021, all eyes are on what the FCC has planned. Midsummer seems like a good time for a year-to-date review to track where the FCC has been and where it is headed next in its TCPA oversight and enforcement roles.

STIR/SHAKEN Call Authentication Framework

Last week, the FCC adopted its January 2021 proposal and issued a Report and Order establishing what the FCC describes as “a fair and consistent process” that a voice service provider can use to challenge a decision by the STIR/SHAKEN framework Governance Authority to strip that provider of the “digital token” that authenticates calls on that provider’s Internet-Protocol (IP) networks.

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Does Unused “Capacity” Make a Dialer an ATDS? District Court Says “No” in Ruling on Pleading Requirements After Facebook

Three months after the Supreme Court’s landmark Facebook ruling, a growing number of trial courts have grappled with interpreting and applying the High Court’s directive.  One of the more interesting decisions came out of the Eastern District of Michigan recently.  In Barry v. Ally Fin., Inc., No. 20-cv-12378, 2021 WL 2936636, at *1-7 (E.D. Mich. July 13, 2021), the district court dismissed a putative TCPA class action on the grounds that the plaintiff failed to allege use of an ATDS.  More significantly, the district court interpreted Facebook to hold that to be an ATDS, the dialing system must actually use a random or sequential number generator to call the plaintiff, and not merely have the capacity to do so.

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Facebook Decision Upends TCPA Litigation Landscape

TCPA Blog’s Mike Daly co-authored an article for the ABA about the impact of the Supreme Court’s recent ruling in Facebook, Inc. v. Duguid, which clarifies the TCPA’s definition of an ATDS. The article explains that the unanimous decision is a victory for businesses because it limits the scope of the statute’s restriction on autodialing and because it should drastically decrease the volume of litigation arising under that part of the statute, which has been one of the most active areas of litigation in recent years. But the article also predicted that the ruling may cause plaintiffs’ counsel to focus on other calling restrictions, for example its restrictions on artificial or prerecorded voices, Do-Not-Call restrictions, and even faxes.

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Eastern District of Pennsylvania Court Holds Text Claim Satisfies Article III, Then Dismisses for Failure to Allege Enough Facts to Make Claim Plausible

A judge in the U.S. District Court for the Eastern District of Pennsylvania recently concluded that receipt of unwanted text messages in violation of the TCPA can constitute an injury-in-fact for purposes of Article III standing, but nevertheless dismissed the claim (without prejudice) pursuant to Rule 12(b)(6) based on its threadbare allegations.

In Camunas v. National Republican Senatorial Committee, the plaintiff (Rolando Camunas) alleged that he received no less than six unsolicited text messages from the defendant (NRSC) asking him to donate to a political party.  Civil Action No. 21-1005, 2021 WL 2144671, at *1 (E.D. Pa. May 26, 2021).  In his complaint, Camunas described the messages as “generic and obviously pre-written” and alleged that they were sent using an automatic telephone dialing system (ATDS), in violation of the TCPA.  Id.

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Supreme Court’s Facebook Decision Upends TCPA Litigation Landscape

TCPA Blog’s Michael Daly will be participating in a webinar titled “Supreme Court’s Facebook Decision Upends TCPA Litigation Landscape.” This webinar on Thursday, April 22, 2021, will delve into the Supreme Court’s decision in Facebook v. Duguid, which resolved a split among the lower courts over how to interpret the TCPA’s definition of an “automatic telephone dialing system.”  The panelists from the Consumer Litigation Committee of the American Bar Association’s Litigation Section will analyze the decision and discuss the future of TCPA litigation.

For more information and to register, please click here.