N.D. Cal: Smart Phone App Not An Autodialer under the TCPA

Practical Law Legal Update 1-600-1205 (Approx. 5 pages)

N.D. Cal: Smart Phone App Not An Autodialer under the TCPA

by Practical Law Commercial

Background

GroupMe, Inc. provides a group text messaging application that allows users to create a group and send simultaneous text messages to every member of that group. Brian Glauser sued GroupMe for violating the TCPA after he received two "welcome texts" through the application: one from the creator of a group he joined and another from GroupMe about the application's service.

The TCPA prohibits parties from using automatic telephone dialing systems to call or text cell phones without first obtaining the recipient's prior express consent (47 U.S.C. § 227(b)). The TCPA defines an automatic telephone dialing system as equipment that has the capacity both to:

Store or produce telephone numbers to be called, using a random or sequential number generator.
Dial telephone numbers.

(47 U.S.C. § 227(a)(1).)

GroupMe moved for summary judgment and argued that it could not be liable under the TCPA because its application does not have the capacity to dial numbers randomly or sequentially and therefore is not an automatic telephone dialing system.

Outcome

The district court granted GroupMe's motion for summary judgment and held that its application does not qualify as an automatic telephone dialing system ("autodialer") under the TCPA because the application does not have the capacity to dial numbers without human intervention. Since GroupMe did not use an autodialer to text Glauser, it was not liable under the TCPA.

When deciding to grant summary judgment to GroupMe, the district court considered whether:

Liability under the TCPA depends on an equipment's present (actual) capacity to function as an autodialer or on its potential capacity to function as an autodialer (see Present v. Potential Capacity).
The TCPA's definition of an autodialer includes predictive dialers (see Predictive Dialers).
GroupMe's application had the capacity to send text messages without human intervention (see Human Intervention).

Present v. Potential Capacity

The district court had to determine whether TCPA liability can be predicated on an equipment's potential capacity to work as an autodialer or whether it must be predicated on the equipment's present (actual) capacity. Relying on cases from the US Court of Appeals for the Ninth Circuit and the TCPA's language (specifically its use of the present tense when defining the capacity of an autodialer), the district court agreed with GroupMe that liability can exist only if the equipment has the present capacity to perform autodialing functions.

The district court noted that if it adopted Glauser's view that liability could be based on an equipment's potential capacity to perform autodialing functions, then the TCPA could be too broadly applied. For example, under the potential capacity theory, all iPhone owners could be subject to TCPA liability because software could potentially be developed to allow their devices to automatically send messages to groups of stored telephone numbers.

Predictive Dialers

After deciding that TCPA liability requires present capacity to act as an autodialer, the district court then addressed whether the definition of autodialer includes predictive dialers (equipment that dials telephone numbers from preprogrammed lists) or only equipment that generates telephone numbers randomly or sequentially. GroupMe argued that its application did not have the present capacity to dial numbers randomly or sequentially and was therefore not an autodialer.

The court rejected GroupMe's argument that an autodialer must dial numbers randomly or sequentially. Relying on Federal Communications Commission (FCC) regulations from 2003, 2008 and 2012, the district court found that the FCC has made clear that the definition of autodialer under the TCPA:

Now includes predictive dialers.
Covers any equipment that has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists.

Human Intervention

Having concluded that TCPA liability attaches only to equipment that has the present capacity to generate numbers and dial them without human intervention, the district court then addressed whether GroupMe's application messaged Glauser without human intervention.

After reviewing the facts of the case, the court held that GroupMe's application did not send texts without human intervention and was therefore not subject to the TCPA. The court agreed with GroupMe that the messages sent to Glauser were either:

Sent directly from group members or merely routed through the application.
Triggered by human intervention: a group creator adding Glauser as a member of the group.

The district court found that the "welcome texts" in particular were sent to Glauser as a direct response to a group creator adding Glauser as a member and were therefore sent with human intervention.

Practical Implications

By granting summary judgment to GroupMe, the US District Court for the Northern District of California has limited the kinds of technology and processes that qualify as an automatic telephone dialing system under the TCPA. While this decision could potentially decrease liability for many services and businesses, companies that reach out directly to consumers should still be vigilant about their obligations and restrictions under the TCPA and other advertising laws.

It remains best practice to obtain a party's prior express consent before calling or texting his or her cell phone. When that is not feasible, companies should ensure that they are not contacting cell phones through an automated telephone dialing system, which can include any equipment that has the present capacity to generate numbers and dial them without human intervention, regardless of whether the numbers are randomly or sequentially generated or come from preprogrammed lists.

For more information on the TCPA and other federal telemarketing laws, see Article, Understanding Federal Telemarketing Regulations.

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