August 21, 2015
This Wednesday, the U.S. District Court for the Northern District of California granted summary judgment in favor of defendant Shac, LLC (“Shac”) in a proposed class action under the Telephone Consumer Protection Act (“TCPA”). The court determined that the promotional text messaging system used by Shac involved human intervention and, therefore, was not an autodialer for TCPA purposes.
How did the FCC’s recent TCPA ruling come into play?
Shac’s Promotional Text Messages
Shac, the operator of the Sapphire Gentlemen’s Club in Las Vegas, engaged third-party mobile marketing company CallFire Inc. (“CallFire”) to provide a Web-based platform for sending promotional text messages to its customers.
In order to deliver text messages, a Shac employee would input customers’ telephone numbers into CallFire’s platform either by manually typing customer numbers into the website, or by uploading or cutting and pasting an existing list of numbers. Alternatively, Shac’s customers could add themselves to the platform by sending an opt-in text message to the system.
Once numbers were added to the CallFire platform, the employee would draft and type the text message content, designate the specific phone numbers to which the message would be sent and then send the message (either in real time, or scheduled to be transmitted at a future time/date).
Third-Party Text Messaging System Not an Autodialer
The court’s analysis focused primarily on a 2008 Federal Communications Commission (“FCC”) ruling, as well as established federal case law concerning the TCPA autodialer definition (including this year’s GroupMe decision), and determined that “the capacity to dial numbers without human intervention is required for TCPA liability.”
After considering Shac’s use of the CallFire system, the court determined that “human intervention was involved in several stages of the process prior to Plaintiff’s receipt of the text message, including transferring of the telephone number into the CallFire database, drafting the message, determining the timing of the message, and clicking ‘send’ on the website to transmit the message to Plaintiff.” As such, Shac’s motion for summary judgment was granted, and the TCPA suit was terminated.
Court Largely Disregards Recent FCC Ruling
Just last month, the FCC released its latest TCPA Declaratory Ruling and Order, including an expansive and controversial interpretation of the autodialer definition that labels practically every telemarketing device on the market as an autodialer, even if the call is made with human intervention or the device is not presently used as an autodialer. The FCC ruling expressly rejected arguments “that the Commission should adopt a ‘human intervention’ test” and concede “that a dialer is not an autodialer unless it has the capacity to dial numbers without human intervention.”
Although this week’s Shac opinion briefly mentions the July 2015 FCC ruling, the provision above was never discussed, and the court instead chose to adopt a human intervention standard.
More Disagreement Between the FCC and Courts Regarding Human Intervention
Despite the FCC’s increasingly expansive regulatory action against telemarketers, the Shac court and others have applied more reasonable standards in interpreting TCPA regulations. However, this area of the law is nuanced and in a state of flux, and courts and regulatory authorities remain split in their interpretation of the TCPA autodialer definition.
If you are interested in learning more about this topic or need to review your text messaging practices, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.
The material contained herein is provided for information 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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