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.

The plaintiff argued that this dialing system was an ATDS because it “produced” numbers through the “random selection of phone numbers from an existing list of contacts.” Id. at 4. The court disagreed:

[T]o accurately determine the meaning of “produce” in § 227(a)(1), we must consider its context, especially its subject—that is, the thing doing the producing. Under the language of § 227(a)(1), a “random or sequential number generator” does the producing. While subjects in other contexts may produce by selecting, a generator produces by generating. An electrical generator produces by generating electricity. A password generator produces by generating a password. And a random number generator produces by generating a random number. Because Txt Live does not generate phone numbers to be called, it does not “produce telephone numbers to be called” for purposes of § 227(a)(1) of the TCPA.

Id. at 5 (emphasis in original). The court then rejected the plaintiff’s reliance on dictionaries that define “produce” as meaning “select” or “bring forth”:

[T]his is the kind of isolated and contextless approach rejected by precedent. While dictionary definitions and common uses of a word can be helpful, they will derail accurate interpretation if we improperly determine that the meaning of a term used in a statute includes any existing definition or use of that term. Just because “produce” can mean “select” in other contexts does not mean it includes “select” here. And just as an electrical generator does not produce by selecting electricity, a random number generator does not produce by selecting a random number.

Appellants argue our interpretation writes “generated” into the statute…. However, our interpretation does no such thing. We simply interpret the word “produce.” And we conclude “produce,” because of the language used in § 227(a)(1), does not mean “select.”

Id. (citations omitted).

Perhaps the most important part of the decision is its discussion of footnote 7 of Facebook v. Duguid, which some plaintiffs have cited in their attempts to seize victory from the jaws of defeat. As our regular readers know, that footnote addressed whether the word “store” in the statutory definition is superfluous:

Duguid argues that such a device would necessarily “produce” numbers using the same generator technology, meaning “store or” in §227(a)(1)(A) is superfluous. “It is no superfluity,” however, for Congress to include both functions in the [ATDS] definition so as to clarify the domain of prohibited devices. For instance, an [ATDS] might use a random number generator to determine the order in which to pick phone numbers from a preproduced list. It would then store those numbers to be dialed at a later time. In any event, even if the storing and producing functions often merge, Congress may have “employed a belt and suspenders approach” in writing the statute.

The Eighth Circuit rejected the notion that footnote 7 somehow supports finding that the statute applies to equipment that selects numbers randomly but does not generate numbers randomly:

Like other courts, we do not believe the Court’s footnote indicates it believed systems that randomly select from non-random phone numbers are Autodialers. The hypothetical system considered by the Court was a system in which numbers were sequentially generated before being stored and later randomly selected. Txt Live does not sequentially generate phone numbers.

Further, the Court struggled with the difficult question of how a number generator could store a phone number without first producing it. The Court explained Congress may have used “store” to “clarify the domain of prohibited devices” rather than specify a distinct category of systems which store but do not produce phone numbers. The Court was not suggesting, as Appellants argue, that the term “produce” includes randomly selecting from a database of non-randomly collected phone numbers. This would conflict with the Court’s overall conclusion that a system which merely stores and dials phone numbers is not an Autodialer.

Id. at 7-8 (citations omitted).