The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee


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Another Court Limits What Constitutes an ATDS Under the TCPA: Is it Safe to Say a Toaster is Not an Autodialer?

The TCPA remains a hotbed of class action litigation, with new cases being filed across the country. The viability of cases frequently turns on whether defendant used an automatic telephone dialing system (“ATDS” or “autodialer”). Given the broad definition provided by the FCC, many courts have held that any device that has the mere capacity to autodial falls within the definition of an ATDS. As one well-known company expressed in an amicus brief on the issue, such a broad interpretation of ATDS would encompass any device, including a toaster oven.

Last week, a Northern District of California court acknowledged this absurdity when it granted summary judgment for GroupMe, Inc. (“GroupMe”) on a TCPA claim, finding there was no triable issue of fact as to whether GroupMe used an autodialer. Glauser v. GroupMe, Inc., 2015 WL 475111 (N.D. Cal. Feb. 4, 2015). The case involved GroupMe’s group messaging application, where users can create groups whose members can all send text messages to each other. One user created a “Poker” group and added plaintiff to that group. Plaintiff received two text messages welcoming him to the group and instructing him how he could opt out of the group. Plaintiff did not respond, but received more text messages where group members discussed their availability for a poker game. Because plaintiff had not responded, GroupMe sent plaintiff a text message notifying plaintiff he’d be removed from the group, unless plaintiff replied to the text message. Plaintiff indeed responded “In,” which reinstated him as part of the group.

Despite joining into the Poker group, plaintiff cried foul and sued under the TCPA. GroupMe moved for summary judgment on the issue of whether it used an autodialer. The court made three findings in ruling in favor of GroupMe. First, the district court agreed that whether equipment has the “capacity” to autodial depends on the device’s present capacity, not potential capacity, noting that to accept a “potential capacity” argument would impermissibly allow the TCPA to capture common devices, such as smartphones. Second, the court held that autodialers include not just dialers that can generate numbers randomly or sequentially, but also predictive dialers. Finally, the court ruled that an autodialer must have the capacity to dial numbers without human intervention. Because all of GroupMe’s text messages were triggered by the original GroupMe user’s creation of the “Poker” group, human intervention was necessary, and GroupMe did not use an autodialer. Absent an autodialer, plaintiff’s case fell on summary judgment.

The GroupMe case demonstrates that TCPA actions may be brought for nearly any conduct involving text messages. Despite affirmatively joining in the “Poker” group and reaping the benefits of the GroupMe service, plaintiff still sued. The ruling also demonstrates that more courts are inclined to scale back what constitutes an ATDS under the TCPA. The FCC may weigh in on the issue, as petitions remain pending. Until then, expect more uncertainty on the scope of an ATDS under the TCPA.

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FTC v. Wyndham Update, Part 3

In earlier updates, we’ve provided background and tracked the progress (and the unique circumstances) of FTC v. Wyndham Worldwide Corp., et al. On April 7, a highly anticipated opinion was issued by New Jersey District Court Judge Esther Salas in a case that will likely have broad implications in the realms of privacy and data security. Through a motion to dismiss, Wyndham argued that the FTC had no authority to assert a claim in the data security context, that the FTC must first formally promulgate data security regulations before bringing such a claim, and that the FTC’s pleadings of consumer harm were insufficient to support their claims. The Wyndham court sided with the FTC on all of these arguments, and dismissed Wyndham’s motion to dismiss.

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FTC’s Robocall Ban is in Effect

As a reminder, the FTC’s ban on unwanted robocalls went into effect yesterday.  Telemarketing calls made to consumers that use prerecorded commercial messages are now prohibited, unless the telemarketer has obtained written permission from customers to make such calls.  Exceptions to this ban include calls made for purely informational purposes, calls concerning the collection of debts where the call do not also promote goods or services, and calls made by politicians, banks, telephone carriers, and most charitable organizations.  Even if telemarketers have obtained written customer consent for robocalls, messages must tell customers how to opt-out of receiving such calls in the future at the start of the message, and provide an automated opt-out method.


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House approves permanent extension of Do-Not-Call list

If you were worried about your phone number being up for grabs by telemarketers after the looming five-year anniversary date of the Do-Not-Call list, the House of Representatives, er, has your number (pardon the pun). They just approved a permanent extension (HR 3541). In its original version, numbers added to the list were intended to age off after five years to allow for people who move and switch numbers. The Senate version (S 2096) is still waiting for a floor vote. Thanks to the CDT for the update.


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Software company that provided leads to marketer that sent unsolicited faxes referencing company’s product not liable as “Sender” under TCPA

A software company that gave advertising leads to a training company that sent unsolicited faxes advertising its own services and the software company’s product is not liable as a “sender” under the Telephone Consumer Privacy Act (TCPA) because there was no evidence that the faxes were sent on the behalf of the software company. Hughes v. FrontRange Solutions USA, Inc., No. D049869, 2007 Cal. Unpub. LEXIS 8344 (Cal. Ct. App. Oct. 16, 2007) (unpublished). The court granted the software company’s summary judgment motion, ruling that the evidence was insufficient to prove that the unsolicited faxes sent to the plaintiff by the training company were sent on behalf of the software company. The court found that even if the evidence showed that the software company offered leads to the training company and was aware that some of the leads resulted in faxed solicitations for the training company’s services, such facts do not establish that the faxes were sent on behalf of the software company.

 


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No Private Right Of Action Under TCPA For Technical Violations Of Fax Labeling Requirements

There is no private cause of action under the Telephone Consumer Protection Act (TCPA) for technical violations of the statute in failing to clearly display the date, time and identification of the sender. Culbreath v. Golding Enterprises, L.L.C., No. 05AP-1230, 872 N.E.2d 284 (Ohio Sept. 5, 2007). The appeals court affirmed the lower court’s dismissal of the plaintiff’s remaining TCPA and state consumer protection law claims. The court concluded that while the TCPA provides a private right of action for the receipt of an unsolicited fax, the statute does not provide a private right of action to individuals for a fax sender’s violations of the technical labeling requirements. The court also ruled that under the Ohio consumer protection statute, only individuals, not corporations, have standing to bring suit for receiving an unsolicited fax that is not shown to be unfair or deceptive.


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In Federal Court TCPA Action, Availability Of Class Action Governed By State Law

In an action under the Telephone Consumer Protection Act (TCPA) removed to federal court under the court’s diversity of citizenship jurisdiction, the question of whether the action may be maintained as a class action is a substantive issue to be decided under the law of the forum state. Giovanniello v. The New York Law Publishing Co., No. 07-1990, 2007 U.S. Dist. LEXIS 56694 (S.D.N.Y. Aug. 6, 2007). The district court granted the defendant’s motion to dismiss the plaintiff’s putative class action, because under New York C.P.L.R. §901(b), a case brought to recover statutory penalties may not be maintained as a class action. The court noted that in enacting the TCPA, Congress intended to incorporate state law limits on private causes of action under the Act. Applying the Erie doctrine, the court concluded that state law limits on class actions are substantive rather than procedural rules, and thus the class action could not be maintained. Because the plaintiff’s individual claim was less than the $75,000 amount required for diversity jurisdiction, the court dismissed the case in its entirety.

The court noted that plaintiff Giovanniello, an attorney, and his current counsel, have been involved in several cases seeking class action relief under the TCPA, e.g. Giovanniello v. Carolina Wholesale Office Machines Co., Inc., 2007 U.S. Dist. LEXIS 60671 (S.D.N.Y. Aug. 20, 2007) (TCPA class action dismissed as moot because individual claim resolved and class certification denied in identical state court action). Note, however, other states may permit class actions under the TCPA. See American Home Services v. A Fast Sign Co., Inc., 2007 Ga. App. LEXIS 906 (Ga. Ct. App. Aug. 9, 2007) (Georgia appellate court affirmed the lower court’s ruling certifying TCPA class action, rejecting the defendant’s claim that the proposed class failed the commonality requirement based upon "the hypothetical existence of persons in the class against whom it could assert the existing business relationship exception").