The Third Circuit recently applied the D.C. Circuit’s decision in ACA International v. FCC and granted summary judgment in favor of the defendant in a Telephone Consumer Protection Act claim. The Court held in Dominguez v. Yahoo, Inc. that Yahoo’s Email SMS Service was not an automatic telephone dialing system (or “ATDS”) because it did not have the “present capacity to function as an autodialer.”
Plaintiff Bill Dominguez filed suit against Yahoo alleging that it violated the TCPA by sending thousands of text messages to his cellular phone without his prior express consent. Specifically, Dominguez received a text message from Yahoo each time the prior owner of the number received an email sent to his Yahoo email account. Plaintiff alleged that Yahoo’s Email SMS Service was an ATDS as defined by the TCPA.
In 2014, the Eastern District of Pennsylvania found the Email SMS Service was not an ATDS because it “did not have the capacity to store or produce telephone numbers using a random or sequential number generator.” On appeal of that decision, the FCC issued its 2015 Declaratory Ruling interpreting “capacity” to “include any latent or potential capacity.” As a result of the 2015 Declaratory Ruling, the appellate court vacated the district court’s decision and remanded the case to the district court. Thereafter, Yahoo again moved for summary judgment, which was again granted in its favor. The district court’s second decision resulted in another appeal to the Third Circuit. While the appeal was pending, the D.C. Circuit issued its opinion in ACA International v. FCC.
In light of the decision in ACA International, the Third Circuit held that it would “interpret the statutory definition of an autodialer as [it] did prior to the issuance of 2015 Declaratory Ruling.” The question the Third Circuit focused on is “whether [Dominguez] provided evidence to show that the Email SMS Service had the present capacity to function as an autodialer.” After reviewing multiple expert reports on Yahoo’s Email SMS Service, the Third Circuit held that Dominguez could “not point to any evidence that create[d] a genuine dispute of fact as to whether the Email SMS Service had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.” The Court further noted that the evidence showed that the Email SMS Service only sent messages to numbers that were “individually and manually inputted into its system by a user.” As such, the system at issue was not an ATDS and summary judgment was granted in favor of Yahoo.
The decision in Dominguez indicates that courts, post-ACA, will likely be focusing on the narrowed definition of what constitutes an ATDS. Because courts no longer have to analyze “potential capacity,” we may see a shift in focus to a telephone system’s “present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.”