Crunch Crushes TCPA Class Action Lawsuit

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October 29, 2014

TCPAThe United States District Court for the Southern District of California recently dismissed a putative class action filed against Crunch San Diego, LLC (“Crunch”) under the Telephone Consumer Protection Act (“TCPA”), ruling that Crunch did not use an autodialer to send text messages to the named plaintiff.

The TCPA Putative Class Action Lawsuit

In Marks v. Crunch San Diego, LLC, Case No. 14-cv-348 (S.D. Cal.), Crunch, which operates gyms in California and in other states, allegedly sent unwanted promotional text messages to the plaintiff in violation of the TCPA.

Crunch filed a motion for summary judgment, claiming that it does not use an “automated telephone dialing system,” or autodialer, to transmit promotional text messages to its members or prospective members.  It maintained that it uses a third-party web-based platform to send promotional text messages, but that phone numbers are only inputted into the platform manually by human hand.

Crunch argued that because the platform it uses to send text messages “lacks the capacity to store or produce telephone numbers . . . using a random or sequential number generator,” it cannot – by definition – be an autodialer under the TCPA and, therefore, the TCPA does not apply.

In rendering its decision, the Court analyzed commentary published by the Federal Communications Commission (“FCC”), which broadly interpreted the definition of autodialer and focused on the equipment’s capacity to generate numbers and dial them without human intervention.  The Court held that the FCC analysis is not binding on courts, as the FCC does not have the statutory authority to change the TCPA’s definition of an autodialer (contrary to the rulemaking authority granted to the FCC under different provisions of the TCPA).

The Court analyzed other courts’ interpretations of “capacity” under the TCPA which have determined that it is the system’s present, not potential, capacity to store, produce or call randomly or sequentially generated telephone numbers that matters for purposes of falling within the scope of the TCPA’s autodialer definition.  Of course, if a broader interpretation of the autodialer definition was adopted, all smart phones could potentially fall within the scope of the TCPA.

The Court noted that because the platform used by Crunch requires “human curation and intervention” for number entry, it could not reasonably be considered a random or sequential number generator within the purview of the TCPA.  Accordingly, because Crunch’s platform is not an autodialer within the meaning of the statute, the Court found that Crunch did not violate the TCPA.

Crushing TCPA Actions

It is important to understand the nuances of the TCPA to ensure telemarketing compliance, particularly because there are numerous plaintiffs-in-waiting who are seeking to commence suit against potential violators. Companies involved in telemarketing and text message marketing should take caution when deciding what technology to use to increase efficiency, or face potential liability under the TCPA.

If you are interested in learning more about this topic or need to review your telemarketing practices, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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