Court Holds That Text-Messaging System Must Be Able to Randomly or Sequentially Generate Numbers to Qualify as an ATDS

The Northern District of Illinois recently entered summary judgment against a group of plaintiffs because it found the system at issue was not an ATDS.

In Smith v. Premier Dermatology, No. 17-3712, 2019 WL 4261245 (N.D. Ill. Sept. 9, 2019), the Defendants used a proprietary “eRelevance” system to send medical marketing communications by text message to their clients’ customers or patients. Defendant eRelevance Corporation would have its clients provide their current and prospective customer contact information, which would be uploaded into the eRelevance system. Based on client-selected criteria, the system would create lists of contacts, and once eRelevance employees built a text-message marketing campaign, they could push a button to have the system automatically send text messages to each contact on the list.

The Plaintiffs brought a putative class action, claiming the Defendants had used an ATDS to send them multiple text messages without their consent. The Defendants eventually moved for summary judgment, arguing the eRelevance text-messaging system was not an ATDS as defined by 47 U.S.C. § 227(a)(1) because it could not generate “random or sequential” phone numbers. In response, Plaintiffs relied heavily on Marks v. Crunch San Diego, 904 F.3d 1041, 1052 (9th Cir. 2018) to claim the TCPA’s statutory definition would include devices that could not generate random or sequential numbers, but could “dial stored numbers automatically.”

Based on ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018), the Smith Court determined that, although “[t]here is a certain allure to the conclusion in Marks,” the 2003 FCC order “is no longer binding or in force” and the TCPA’s statutory definition did not support Plaintiffs’ interpretation of an ATDS. Instead, the plain language of Section 227(a)(1) defines an ATDS as “a device that (1) stores or produces telephone numbers that (2) were randomly or sequentially generated and (3) dials them automatically.” Casting aside Plaintiffs’ argument that testimony indicated the system could be “programmed to do anything that is computationally possible,” the Court found there was no genuine dispute that the eRelevance system never had the capacity to use randomly or sequentially generated numbers for the marketing campaigns and “it is the system’s ‘present capacity,’ not its ‘potential capacity,’ that matters.” (Citing ACA Int’l, 885 F.3d at 695-96, 699-700). The Court therefore found the text messages had not violated the TCPA.

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