Third Circuit Affirms Narrow Definition of Autodialer Under the TCPA

In a precedential decision, the Third Circuit affirmed a narrow reading of autodialer under the Telephone Consumer Protection Act (“TCPA”), the first such decision within this Circuit following the D.C. Circuit’s rejection of the FCC’s 2015 definition of autodialer in ACA International.

In Dominguez v. Yahoo, Inc., plaintiff purchased a cell phone with a reassigned telephone number, the prior owner of which had subscribed to Yahoo’s Email SMS Service. Because the prior owner of the number never cancelled the subscription, plaintiff received a text message from Yahoo every time the prior owner received an email, which amounted to thousands of text messages. Plaintiff filed a putative class action alleging that Yahoo had violated the TCPA, which requires that plaintiff prove that Yahoo’s Email SMS Service was an “automatic telephone dialing system,” i.e., an autodialer. Following the FCC’s 2015 ruling, plaintiff amended his complaint to allege that the Email SMS Service “ha[d] the potential capacity to place autodialed calls.” Yahoo moved for summary judgment, and both parties submitted expert reports addressing the Email SMS Service’s latent or potential capacity. The District Court granted Yahoo’s motion to exclude plaintiff’s expert reports and granted summary judgment in favor of Yahoo.

On appeal, the Third Circuit relied heavily on ACA International and held that it was required to interpret the statutory definition of autodialer as it did prior to the issuance of the FCC’s 2015 ruling. Thus, the question on appeal was whether plaintiff had provided evidence to show that the Email SMS Service had the present capacity to function as an autodialer, which the panel answered in the negative. The court held that the Email SMS Service was not an autodialer because it “sent messages only to numbers that had been individually and manually inputted into its system by a user.” In other words, only systems that use “random number generation” can be considered an autodialer.

This decision may offer a sigh of some relief for business who communicate with current and potential customers through electronic means. The Third Circuit’s decision offers some clarity on the autodialer definition dispute and appears to strike a balance between randomly generated text communications and texts individually sent, such as those to business contacts.

Caroline E. Oks is an Associate in the Gibbons Commercial & Criminal Litigation Department.
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