District of New Jersey Further Clarifies TCPA’s Reach For Text-Marketing Campaigns

In a recent decision, Chief Judge Freda L. Wolfson of the District of New Jersey further clarified the reach of the Telephone Consumer Protection Act (TCPA) as it relates to certain text marketing campaigns by businesses.

In Eisenband v. Pine Belt Automotive d/b/a Pine Belt Nissan, Eisenband filed a putative class action lawsuit against an automotive dealership, Pine Belt, claiming that Pine Belt had violated the TCPA by using an Automated Telephone Dialing System (ATDS), otherwise known as an autodialer, to send a text message to his cell phone. Eisenband had telephoned Pine Belt in 2017 requesting information about the cost of leasing a specific vehicle and instructed Pine Belt to call him back on his cell phone with the requested pricing information. Pine Belt’s sales representative obtained the cost estimate data and returned the call, as requested, but Eisenband decided not to enter into a lease for the vehicle. A few days later, Pine Belt sent Eisenband a promotional text message concerning lease options on other vehicles, which prompted him, about one week later, to file a class action lawsuit seeking statutory damages of up to $1,500 per text message, for himself and for every person in the putative class who received such text messages.

Discovery revealed that Pine Belt had sent the text messages in question to persons who had voluntarily provided their contact information to Pine Belt. Pine Belt used its CRM technology platform to send text messages to specifically selected contacts within its CRM database. Pine Belt representatives produced screen shots of the technology platform’s campaign function showing the detailed selection criteria, and explained at depositions that the campaign function required the user to proceed through more than thirty steps to create a group of selected contacts to receive targeted messages about dealer or vehicle manufacturer promotions. The owner and creator of the platform technology, a third-party software service provider, also testified about the capabilities and functionalities of the technology platform as it existed in 2017 when the allegedly offending text messages were sent to Eisenband.

At the conclusion of discovery, Pine Belt moved for summary judgment on the ground that the computer program used to deliver the text messages and calls did not meet the statutory definition of ATDS, and therefore, there could be no TCPA violation, as a matter of law. According to Pine Belt, there was not a shred of evidence in the record that the texting device was an ATDS, and thus summary judgment was mandated by the Third Circuit’s precedential decision in Dominguez v. Yahoo, Inc. Decided in 2018, Dominguez held that in order for a texting device to constitute an ATDS, the device must meet the statutory definition of ATDS, i.e., have the “present capacity to function as an [ATDS] by generating random or sequential telephone numbers and dialing those numbers.” Eisenband denied that Dominguez was controlling. Instead, Eisenband argued that the District of New Jersey should adopt the Ninth Circuit’s interpretation of ATDS in Marks v. Crunch San Diego, LLC, and the FCC’s rulings in 2003 and 2008 (describing “predictive dialers”). That is, Eisenband urged the Court to conclude that Pine Belt’s CRM platform was an ATDS because it had the capacity to transmit text messages using a stored list of numbers without human intervention, even though human intervention was required to create the list of numbers.

In rejecting Eisenband’s arguments and granting Pine Belt’s motion for summary judgment, the Court first held that Dominguez and ACA International v. FCC, 885 F.3d 687, 698-99 (D.C. Cir. 2018) implicitly invalidated the FCC’s 2003 and 2008 Orders interpreting autodialers. The District Court relied on the TCPA’s statutory language and held that “to qualify as an ATDS, a system must randomly or sequentially generate numbers, and, accordingly, any system that dials numbers from a preprogrammed list does not fall within the statutory definition.” The CRM platform used by Pine Belt was not an ATDS because the uncontroverted evidence showed that the platform did not have the present capacity to randomly or sequentially generate numbers, and the number generation process was in no way random or sequential. Messages could be sent only to specifically targeted customers or potential customers within Pine Belt’s CRM database and then only to those who “qualified” as recipients by meeting the message criteria specified by the creator of the particular campaign. These types of platforms simply do not meet the statutory definition of ATDS.

PINE BELT AUTOMOTIVE D/B/A PINE BELT NISSAN IS A CLIENT OF GIBBONS P.C. THE FIRM, AND SPECIFICALLY THE AUTHORS OF THIS BLOG POST, WERE ACTIVELY INVOLVED IN THE LITIGATION MENTIONED. PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME.
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