July 23, 2021

Volume XI, Number 204

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Facebook Fn7 Proves Costly: First Case Holding LiveVox System May be ATDS Under Facebook FN7 is Out—But There’s a Silver Lining [PODCAST]

Well this is a big one folks.

We told you the same day that Facebook was decided that the Plaintiff’s bar was looking to make use of FN7, and they’ve just drawn first blood.

The first case finding a system may be an ATDS under Facebook at the MSJ phase is out and its not pretty.

In Carl v. First Nat’l Bank of Omaha, Docket no. 2:19-cv-00504-GZS, 2021 U.S. Dist. LEXIS 111889 (D Me.  June 15, 2021)  court held that the dialing system used by Defendant may have had the capacity to “store numbers using a random or sequential number generator.” This is the first time that issue has survived summary judgment in a case folks. Ever.

Nonetheless, the Court held the system did not actually use that capacity to send the messages at issue to the named Plaintiff. So there was a question of fact present—and it was all about dialing sequence.

Here is how the system worked:

  • Defendant utilized a “dialer team” to make daily decisions regarding whom to call, at what number, and whether a message would be left.

  • Defendant then used a LiveVox branded Dialing System to place calls.

  • The system operated “campaigns,” which consisted of files with a list of accounts to call.

  • These campaigns were loaded into the system and stored for later automatic dialing.

  • The system was configured so that, if an automatically dialed call connected, the call would be immediately transferred to an agent.

  • The system also could be configured, in the event it connected with an answering machine or voicemail, to automatically (1) leave a message employing an artificial voice, (2) pass the connection to an agent, or (3) leave no message and disconnect.

On this record the Court found that the creation of the dialing campaign did not trigger the TCPA but the operation of the system in executing on the dialing command might under footnote 7. Here’s the key analysis:

Viewing the record in the light most favorable to Plaintiff, there is a trial worthy question as to whether the Voice Portal system had the capacity to “store a telephone number using a random or sequential generator.” Id. However, it is less clear that the “campaigns” Defendant loaded onto its system involved the actual use of a random or sequential generator. Nonetheless, the Court acknowledges, as Plaintiff has argued in his supplemental briefing, that Duguid suggested that an ATDS could potentially fall under TCPA if it “use[s] a random number generator to determine the order in which to pick phone numbers from a pre-produced list. [and] then store[s] those numbers to be dialed at a later time.” Duguid, 141 S. Ct. at 1172 n.7. While this description may encompass Defendant’s dialing system, the issue is not amenable to summary judgment on the current record.

So the Court relies on footnote 7 to determine that the LiveVox system at issue in that case may be an ATDS. Pretty incredible, no?

Now a jury would ultimately have to decide the issue but this Carl demonstrates exactly what I have been saying as of late—the sequence of dialing is now the critical issue following Facebook.

There is a bright side to this case as well, however—but it is hard to see it through the clouds of fn7-related tragedy.

Those of you that attended the big Masterclass on revocation last week already know that contractual consent cannot be revoked under the doctrines of the Second and Eleventh Circuit courts of appeal. Well the district court in Carl applied that same logic and concluded that consumers cannot opt-out of consent provided as part of a bargained-for exchange. So Defendant was ultimately able to win the case.

Keep that one in mind folks!

 

 

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 167
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About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

213-689-6510
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