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Court in W.D. Missouri Holds an ATDS Must Have Capacity to Randomly or Sequentially Generate Numbers

The new decade has brought us a series of new decisions regarding one of our favorite issues under the TCPA – the definition of an automatic telephone dialing system (“ATDS”). This week, a District Court in the Western District of Missouri weighed in on the issue and found that a system must produce numbers using a random or sequential number generator to qualify as an ATDS. Beal v. Outfield Brew House, Case No. 2:18-cv-4028-MDH, 2020 U.S. Dist. LEXIS 22487 (W.D. Mo. Feb. 10, 2020)

In Beal, the court granted Defendant’s motion for summary judgment on grounds that the platform used by Defendant to send messages was not an ATDS because it was unable to generate numbers randomly and required some degree of human intervention.

To provide some background, Defendant Outfield Brew House is a restaurant, bar, and nightclub that sends promotional materials to its patrons through text messages. Defendant utilized the SendSmart text platform and the Txt Live! platform to send the text messages at issue in this case. In order to send the text messages through SendSmart and Txt Live!, one of Defendant’s employees logged on to the platform, created the text message, and pressed a button to send the message. The employee also selected a group of customers she wanted to send the message to, for example "customers over the age of 30," in order to appeal to a certain demographic. Both Send Smart and Txt Live! required numbers to be entered into the system manually, either by importing information from a CSV file or by an individual manually typing in the numbers.

Defendant thus moved for summary judgment arguing that the platforms they used did not qualify as an ATDS. Plaintiff, on the other hand, filed a cross motion for summary judgment, arguing that the platforms constituted an ATDS because they had a "shuffle" function and software that "randomize[s] contacts" as a step in the campaign process.

The court granted Defendant’s motion for summary judgment and held that the platforms at issue were not an ATDS because they could only text individuals whose numbers had been entered into the system manually — either by importing information from a CSV file or individually typing in the number. And even if the software could "randomly-select phone numbers," that is not the same as generating them. In other words, the system did not generate telephone numbers, it merely stored them. In reaching its decision, the court declined to follow the Ninth Circuit’s decision in Marks v. Crunch San Diego, LLC., 904 F.3d 1041, 1050 (9th Cir. 2018) and rather cited the Third Circuit’s ruling in Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018), the Sixth Circuit’s decision in Gary v. TrueBlue, Inc., 786 F. App'x 555, 557 (6th Cir. 2019), and the Eleventh Circuit’s brand new decision in Glasser v. Hilton Grand Vacations Co., LLC, No. 18-14499, 2020 WL 415811 (11th Cir. Jan. 27, 2020).

In support of its holding, the court further noted that the platforms used by Defendant did not qualify as an ATDS because they required some level of human intervention. The platforms used did not have the ability to generate, or create, numbers. Rather, the platforms used numbers that were imported in a CSV file or manually entered by an individual typing the number into the system from a set list. Moreover, the employees were a necessary component in selecting both the demographics and the specific message that would be sent out in each promotional text. As such, the court granted summary judgment for Defendant as to the issue of ATDS use.

Following on the heels of the Eleventh Circuit’s Glasser decision, Beal is another case that is indicative of a continuing judicial trend of applying an interpretation of an ATDS decision that is faithful to the text of the statute, and unlike the Ninth Circuit’s interpretation, does not turn everyday smartphones into devices regulated by the TCPA.

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About this Author

Susan Nikdel, Womble, litigation attorney
Associate

Susan represents clients in commercial and financial services litigation, particularly Telephone Consumer Protection Act (TCPA) cases. She is part of a team that has handled more than 600 TCPA cases, including more than 50 national class actions.

Prior to beginning her legal career, Susan served as a Judicial Extern for the Honorable Theodor C. Albert in the U.S. Bankruptcy Court, Central District of California.  She is a Certified Mediator.

Susan is fluent in Farsi/Persian and conversational in Spanish.

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