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Recent Court Decision Inverts ATDS Pleading Standard in TCPA Litigation

In Shank v. Givesurance Insurance Services, Inc., Plaintiff alleged that Givesurance, as an agent for Progressive Casualty Insurance Company and Progressive West Insurance Company (collectively “Progressive”), placed a telemarketing call to his cellular telephone. Thereafter, “an automated text then appeared” on his phone asking him to “‘[P]lease contact our office to save you money on you[sic] Progressive Trucking Insurance[ ]Policy. Defendants argued that no claim under the TCPA was alleged since there were no allegations that a random or sequential number generator was used to dial the calls and, instead, the individuals who received the text message were all “subscribers” or imported contacts.

To determine whether the Plaintiff pled sufficient factual matter that an ATDS was used to send the text message to him, the Court relied on the following factors: (1) “[T]he call to Plaintiff was made from SMS Code 555888;” (2) an SMS code is evidence of the use of an ATDS, since they are “used to send out advertisements en masse;” (3) SimpleTexting advertises its ability to do “mass text messaging;” (4) the text message was “non-personalized,” generic and part of a “nationwide telemarketing campaign;” and (5) Plaintiff did not consent to receiving the text. Notably, none of the factors says anything about the use of a random or sequential number generator.

As we have previously discussed, the Supreme Court’s decision in Facebook v. Duguid clarified that unless the dialing equipment uses a random or sequential number generator, businesses will not be required to obtain prior written consent from the consumer before contacting them.  Under the Supreme Court’s recent interpretation, equipment that merely dials from a list, and does not incorporate the use of a random or sequential telephone number generator is not bound by the TCPA’s requirements to obtain prior express consent before making calls or sending text messages using an ATDS.

In Shank, despite the absence of any specific allegation that Defendants’ system incorporated the use of a random or sequential telephone number generator to store or produce numbers, the Court determined that Plaintiff had pled sufficient allegations to survive a motion to dismiss. In fact, the opinion seems to credit Plaintiff’s silence on the issue, indicating that the complaint, in this case, did not include the allegation that proved to be fatal to Plaintiff’s claim in Facebook—“that his name was prepopulated or dialed from a legitimate list of customer or client contacts.” Concluding that the omission of any reference to random or sequential number generation in Plaintiff’s complaint is sufficient to survive a motion to dismiss is inconsistent with the well-recognized principle that a complaint must allege enough facts to create a plausible inference.

The Court’s willingness to infer that a random or sequential telephone number generator was used to store or produce numbers—based on allegations that numbers were dialed en masse and that the messages received were generic—all but nullifies Facebook at the pleading stage. The Supreme Court has made clear that the TCPA does not extend to equipment—even equipment that can transmit large amounts of text messages—unless it incorporates a random or sequential number generator. Trial courts should not casually ignore this important element and permit cases to proceed to discovery when there is no affirmative allegation meeting this essential element.

Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume XII, Number 66
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Our interdisciplinary Communications, Technology and Media team is comprised of lawyers with extensive experience in telecommunications, broadband, cable, broadcast, spectrum matters, program distribution, tower and facilities deployment, and all facets of the Internet and the broadband-enabled, Internet-of-things technologies that drive our connected economy. Our team also includes experienced telecommunications litigators adept at translating complex technologies and regulations to juries, judges, and arbitrators.

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