Manatt, Phelps & Phillips, LLP

As part of Manatt’s continuing monthly coverage of the aftermath of Facebook v. Duguid and how district courts are applying it to determine whether a calling system meets the Supreme Court’s newly clarified definition of an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA), we report on several notable decisions since our last roundup. While many courts have continued to hold that a calling system must actually use (not just have a hypothetical capacity to use) a random or sequential number generator in order to qualify as an ATDS consistent with the Facebook holding and have dismissed such claims at the pleadings stage lacking such facts, the results have not been uniform.

A summary of some recent noteworthy district-level decisions applying and interpreting Facebook follows.

Courts Granting Motions to Dismiss

Borden v. eFinancial, LLC, No. C19-1430JLR, 2021 WL 3602479 (W.D. Wash. Aug. 13, 2021)

U.S. District Court Judge James L. Ropart dismissed the complaint with prejudice, finding that the plaintiff’s allegations that he provided his phone number to the defendant meant the text messages at issue “necessarily were not sent through an ATDS.” While the plaintiff alleged that defendant’s system used a sequential number generator to select which stored phone numbers to dial and to populate a “LeadID field” to identify numbers in the defendant’s database, the court found this insufficient; the court concluded that the plaintiff did not allege that the defendant’s system “‘generate[s] random or sequential phone numbers’ to be dialed” (emphasis added). The court also reasoned that the plaintiff’s provision of his phone number to the defendant “simply does not implicate the problems caused by autodialing of random or sequential blocks of numbers that Congress sought to address when it passed the TCPA.”

To read the opinion in Borden v. eFinancial, LLC, click here.

Guglielmo v. CVS Pharmacy, Inc., Civil No. 3:20cv1560, 2021 WL 3291532 (D. Conn. Aug. 2, 2021)

Judge Janet Bond Arterton of the U.S. District Court, Connecticut ruled that the plaintiff’s ATDS allegations were inadequate after applying “Facebook’s strict reading of the TCPA” and dismissed the case. The plaintiff alleged that he “received multiple calls in the form of text messages, on the same day, on several occasions” that “indicated they were automatically dialed” because “there was no way to respond to anyone directly to communicate concerning the message[,]” and despite his “attempt[s] to opt out using the instructions, [ ] he continued to receive messages.” “However, he neither allege[d] that his number was stored or produced with a random or sequential number generator, nor d[id] he claim that the calls he received used an artificial or prerecorded voice.”

To read the opinion in Guglielmo v. CVS Pharmacy, Inc., click here.

Stewart v. Network Capital Funding Corp., No. CV 21-368-MWF (MAAX), 2021 WL 3088011 (C.D. Cal. Jul. 16, 2021)

Citing to the U.S. District Court, Colorado’s post-Facebook decision in Montanez v. Future Vision Brain Bank, LLC, No. 20-cv-02959, 2021 WL 1697928 (D. Colo. Apr. 29, 2021) discussed in our previous roundup, which notably was the first federal district court to apply Facebook, Judge Michael W. Fitzgerald of the U.S. District Court, Central District of California dismissed the plaintiff’s complaint on a Rule 12(b)(6) motion. Fitzgerald found that the plaintiff failed to allege any facts to plausibly establish that the defendant used an ATDS, such as, for example, showing the identical, repetitive or impersonal nature of the calls, let alone any facts plausibly showing that the defendant’s dialing equipment employed or used a random or sequential number generator in placing the complained-of calls.

To read the opinion in Stewart v. Network Capital Funding Corp., click here.

Barry v. Ally Financial, Inc., No. 20-12378, 2021 WL 2936636 (E.D. Mich. Jul. 13, 2021)

Relying on several similar post-Facebook decisions, like Watts and Hufnus, among others, Judge Paul Borman for the U.S. District Court, Eastern District of Michigan dismissed the complaint with prejudice. The plaintiff alleged the defendant called her cell phone (using an ATDS, without her consent) in an attempt to reach her brother, and that the defendant continued to call her after she requested not to be called. The court granted the defendant’s motion to dismiss (MTD) because the plaintiff did not allege that the defendant used a random or sequential number generator to make the calls. The court also noted that “because the calls Plaintiff complains about were directed to Plaintiff specifically and purposefully, related to her brother’s account with Defendant, the Court can only conclude that the technology that called her used a stored list containing the names and numbers of persons to be contacted; had the technology stored or produced Plaintiff’s number at random or in sequence, it would have no way of knowing that it was contacting someone associated with a specific account holder.”

To read the opinion in Barry v. Ally Financial, Inc., click here.

Courts Denying Motions to Dismiss

Garner v. Allstate Ins. Co., No. 20 C 4693, 2021 WL 3857786 (N.D. Ill. Aug. 30, 2021)

Judge John Zee of the U.S. District Court, Northern District of Illinois held that the plaintiffs’ allegations that they received numerous unsolicited calls from the defendant using spoofed numbers within a span of six months were sufficient to allow a reasonable inference that the defendant used an ATDS. The plaintiffs alleged that the defendant’s system “had the capacity to store or produce telephone numbers using a random or sequential number generator, to receive and store lists of phone numbers, and to dial such numbers, en masse, without human intervention.” The court found that this description was consistent with the Seventh Circuit’s ruling in Gadelhak and the Supreme Court’s ruling in Facebook, despite the plaintiffs’ description of the dialing system as a “predictive dialer.”

To read the opinion in Garner v. Allstate Ins. Co., click here.

Jance v. Homerun Offer LLC, et al., No. CV-20-00482-TUC-JGZ, 2021 WL 3270318 (D. Ariz. Jul. 30, 2021)

Judge Jennifer G. Zipps of the U.S. District Court, Arizona ruled that the pro se plaintiff had plausibly alleged the defendants used an ATDS despite only alleging circumstantial and indirect allegations of ATDS use, such as the content of the calls and the context and manner in which they were made. The court stated that the system need only have the capacity to call randomly or sequentially generated phone numbers (rather than actually use such a generator) and suggested that the issue was not properly resolved without discovery. Among other things, the plaintiff alleged he had no business relationship with the defendants, did not give the defendants his contact information and did not consent to be called. He further alleged he heard a pause before a person began speaking, the calls were generic in nature and never referenced the plaintiff specifically, and the numbers were spoofed. He also claimed to have received numerous calls after requesting to be placed on the defendant’s internal “Do Not Call” list.

To read the opinion in Jance v. Homerun Offer LLC, et al., click here.

Libby v. Nat’l Republican Senatorial Committee, No. 5:21-cv-197-DAE, 2021 WL 4025798 (W.D. Tex. Jul. 27, 2021)

Declining to dismiss, Judge David Alan Ezra of the U.S. District Court, Western District of Texas held that the plaintiff’s allegations that she received “generic and obviously prewritten” text messages which she alleged were sent using a dialing system that “calls phone numbers from a stored list using a random or sequential number generator to select those phone numbers” were sufficient to state a plausible claim under the TCPA. The court found that these allegations were sufficient to allow the plaintiff to proceed with discovery because “no plaintiff will have personal knowledge of the defendant’s telephone system at the pleadings stage.”

To read the opinion in Libby v. Nat’l Republican Senatorial Committee, click here.

Miles v. Medicredit, Inc., No. 4:20-CV-01186 JAR, 2021 WL 2949565 (E.D. Mo. Jul. 14, 2021)

Declining to dismiss, Judge John A. Ross for the U.S. District Court, Eastern District of Missouri held that the ATDS issue is more appropriate for resolution at the summary judgment stage. There, the plaintiff alleged the defendant made numerous calls to the plaintiff’s cell phone using an ATDS and an artificial prerecorded voice, without consent, in an effort to collect a debt owed by someone named Amy. The court refused to follow Timms, which the defendant cited to argue that the plaintiff’s allegation that it uploads numbers to be called is incompatible with the Facebook ATDS definition, because Timms was decided on a motion for summary judgment and not an MTD. Citing Callier, the court also rejected the argument that because the calls were made to a specific individual, they could not be randomly or sequentially generated.

To read the opinion in Miles v. Medicredit, Inc., click here.

Key takeaway: While Facebook sets the current standard for finding whether a system is an ATDS with respect to the use of a random and sequential number generator, some courts may elect to examine factors considered determinative pre-Facebook and may follow pre-Facebook authority.

Random or Sequential Number Generator: Use Versus Capacity

Several cases post-Facebook examine whether a system must actually use a random or sequential number generator to make the calls or if the system’s mere capacity to use a random or sequential number generator is sufficient for the system to qualify as an ATDS. It has been only a matter of months, but courts in different circuits have already come out on opposite sides of this issue.

Grome v. USAA Sav. Bank, No. 4:19-CV-3080, 2021 WL 3883713 (D. Neb. Aug. 31, 2021)

On summary judgment, the U.S. District Court, District of Nebraska found that the Aspect Unified IP predictive dialer is not an ATDS as a matter of law because it “does not randomly or sequentially generate numbers from whole cloth and is not capable of dialing telephone numbers beyond those stored in the campaign lists uploaded by the defendant.” Plaintiff argued that the system qualified as an ATDS because it can automatically re-sequence numbers on the campaign list. The court rejected this argument, stating that plaintiff was taking footnote 7 of the Facebook opinion out of context. The court also rejected plaintiff’s argument that the Aspect Unified IP predictive dialer had the “capacity” to function as an autodialer because it could potentially be reprogrammed to use randomly or sequentially generated lists of numbers, noting that the term “capacity” meant “present capacity” and the Aspect Unified IP lacked the present capacity “to use a random or sequential number generator to produce or store telephone numbers.”

To read the opinion in Grome v. USAA Sav. Bank, click here.

Atkinson v. Pro Custom Solar LLC, No. SA-21-CV-178, 2021 WL 2669558 (W.D. Tex. June 16, 2021)

The U.S. District Court, Western District of Texas denied the defendant’s motion to dismiss, finding that allegations that the system had the capacity to use a random or sequential number generator were sufficient to pass the pleadings stage. Plaintiff Tracy Atkinson alleged that Pro Custom Solar called and sent text messages to her cell phone using a system that had the “capacity to dial numbers in a random and/or sequential fashion,” and did not allege that Pro Custom Solar placed targeted or individualized texts or calls to her. The court found that these allegations were sufficient in part because, pre-discovery, the plaintiff will not likely have “personal knowledge of the defendant’s telephone system at the pleadings stage.” This decision runs contrary to the rulings in McEwen and Montanez, which found that allegations of use are required and capacity alone is not enough.

To read the opinion in Atkinson v. Pro Custom Solar LLC, click here.

Barnett v. Bank of America, N.A., No. 3:20-cv-272, 2021 WL 2187950 (W.D.N.C. May 28, 2021)

The U.S. District Court, Western District of North Carolina found, on summary judgment, that Avaya Proactive Contact, which merely selects numbers from a preexisting list, is not an ATDS. Plaintiff David Barnett argued that the system qualified as an ATDS because it used a random or sequential number generator, but he failed to produce any affirmative evidence to support this contention. Bank of America countered that the system merely selected numbers from a preexisting list created based on criteria provided by administrators, and that the system did not use a random or sequential number generator. The court considered both Barnett’s lack of evidence that the system used a random or sequential number generator and Bank of America’s affirmative evidence that the system did not use such a number generator. Accordingly, applying the definition of an ATDS from Facebook, the court concluded that Bank of America’s system was not an ATDS as a matter of law and granted summary judgment in favor of Bank of America.

To read the opinion in Barnett v. Bank of America, N.A., click here.

We provide further coverage on the Barnett opinion here.

Montanez v. Future Vision Brain Bank, LLC, No. 20-cv-02959, 2021 WL 1697928 (D. Colo. Apr. 29, 2021)

The U.S. District Court, District of Colorado adopted the magistrate’s recommendation denying the defendant’s motion to dismiss on the grounds that the plaintiff plausibly alleged that the system in question used a random or sequential number generator. Plaintiff Jessica Montanez brought suit on account of telemarketing text messages she allegedly received from a cannabis dispensary. In the complaint, Montanez alleged that the messaging platform had the ability to store telephone numbers, generate sequential numbers and dial numbers in a sequential order. Specifically, Montanez alleged that the system “automatically retrieved each telephone number from a list of numbers in a sequential order, generated each number in the sequential order listed, combined each number with the specific content of Defendant’s message to create individual ‘packets,’ and transmitted each packet in a sequential order.” Similar to the court in McEwen, the court here focused on the distinction between random or sequential number generator use versus capability, concluding that to support a TCPA claim “it is critical that a random or sequential number generator be utilized to constitute an ATDS”; but the Montanez court came to the opposite conclusion in applying this rule. Taking the allegations as true, the court found that Montanez sufficiently alleged that the system was an ATDS and denied Future Vision Brain Bank’s motion to dismiss.

To read the opinion in Montanez v. Future Vision Brain Bank, LLC, click here.

McEwen v. National Rifle Association of America, et al., No. 2:20-cv-00153, 2021 WL 1414273 (D. Me. Apr. 14, 2021)

At the pleadings stage, the U.S. District Court, District of Maine found that a plaintiff must allege that the system in question actually used a random or sequential number generator rather than simply alleging that the system has the capacity to do so. Plaintiff Travis McEwen alleged receipt of numerous calls from an NRA telemarketing campaign conducted by InfoCision, even after asking that his number be taken off the list. McEwen alleged that the calls were made using a dialing system with the capacity to store or produce telephone numbers to be called using a random or sequential number generator. Importantly, however, McEwen’s allegations did not state that the system actually used a random or sequential number generator to place its calls. The court focused on the difference between the system having the capacity to use a random or sequential number generator and the actual use of that random or sequential number generator to make the calls in question. The court stated: “After the [Facebook] opinion, the ATDS portion of the claim requires an allegation that InfoCision used a random or sequential number generator to place a call to Plaintiff’s cell phone, not merely a claim that its dialing system has that capability … . Plaintiff’s allegations do not state that InfoCision used a random or sequential number generator to place its calls to Plaintiff.”

To read the opinion in McEwen v. National Rifle Association of America, et al., click here.

Key takeaway: Courts are still grappling with the use versus capacity issue—whether it is enough for the system to have the capacity to use a random or sequential number generator, as in Atkinson, or if the actual use of a random or sequential number generator in making the calls is required, as in McEwen and Montanez.

Random or Sequential Number Generator: Selection of Numbers From a Preproduced List

Several other cases examine systems that use a random or sequential number generator to select the order in which numbers are to be dialed from a preproduced list. While three cases found that these systems are not ATDSs within the meaning defined in Facebook, another court found that this functionality may be sufficient to demonstrate that the system was an ATDS.

Tehrani v. Joie De Vivre Hospitality, LLC, No. 19-CV-08168-EMC, 2021 WL 3886043 (N.D. Cal. Aug. 31, 2021)

Judge Edward Chen of the U.S. District Court, Northern District of California denied a motion for leave to file a third amended complaint, finding plaintiff’s proposed allegations that defendant’s system “uses a list of preexisting phone numbers,” “generates an index number” using either a random or sequential number generator, and then “assigns the generated numbers to phone numbers from the list” before selecting which numbers to automatically dial, were not sufficient to state a plausible claim under the TCPA. The court rejected the plaintiff’s argument that a number generator “does not actually have to generate phone numbers,” citing Hufnus, Watts, Barry, Borden and Timms with approval.

To read the opinion in Tehrani v. Joie De Vivre Hospitality, LLC, click here.

Watts v. Emergency Twenty Four, Inc., No. 20-cv-1820, 2021 WL 2529613 (N.D. Ill. June 21, 2021)

The U.S. District Court, Northern District of Illinois granted a motion to dismiss, finding allegations that the system was capable of contacting thousands of people per day were insufficient to show that it was an ATDS under Facebook, particularly when the calls were made to numbers on a preproduced list. Emergency Twenty Four (EMERgency24) provides burglar and fire alarm monitoring. Its system is programmed to call stored telephone numbers to notify a customer when the company receives a signal from that customer’s alarm. Plaintiff Preston Watts’ cell phone number was listed on the account for his former employer, and Watts received calls from EMERgency24 in connection with alarms tripped at his former employer’s business. While Watts alleged that the system was “capable of contacting thousands of people a day,” the court focused on the fact that Watts did not allege that the system actually used a random or sequential number generator. The court found that “instead of randomly or sequentially generating Watts’[] number, EMERgency24’s equipment stored Watts’[] number in a database and dialed that stored number.” The court found that Watts’ allegations were insufficient under Facebook to show that the system was an ATDS and granted EMERgency24’s motion to dismiss.

To read the opinion in Watts v. Emergency Twenty Four, Inc., click here.

Carl v. First National Bank of Omaha, No. 2:19-cv-00504, 2021 WL 2444162 (D. Me. June 15, 2021)

The U.S. District Court, District of Maine found that a system that chooses phone numbers from a preproduced list might fall within the Facebook definition of an ATDS. When plaintiff David Carl became past due on his First National Bank of Omaha (FNBO) credit card, FNBO used a LiveVox Voice Portal Dialing System to place between one and six calls per day to Carl’s cell phone. The court found that there was a “trialworthy question” as to whether the Voice Portal system had the capacity to store a telephone number using a random or sequential generator. However, the court also questioned whether the call campaigns FNBO loaded into the system actually involved the use of the random or sequential number generator. Unlike the courts in HufnusTimms and Watts, this court interpreted Facebook to say that a system could potentially qualify as an ATDS if it used a random number generator to determine the order in which to pick phone numbers from a preproduced list and stored those numbers to be dialed at a later time. The court ultimately granted FNBO’s motion for summary judgment, but on grounds not related to the ATDS argument.

To read the opinion in Carl v. First National Bank of Omaha, click here.

Hufnus v. DoNotPay, Inc., No. 20-cv-08701, 2021 WL 2585488 (N.D. Cal. June 14, 2021)

The U.S. District Court, Northern District of California granted the defendant’s motion to dismiss on ATDS grounds, finding that a platform that selects and contacts phone numbers provided by customers from a preproduced list is not an ATDS. DoNotPay argued that the platform it used to contact the plaintiff, Mathew Hufnus, “merely processes” phone numbers supplied by consumers while signing up for DoNotPay’s services. Although Hufnus alleged that the system (1) stores those numbers in a random and/or sequential way, (2) uses a random and/or sequential generator to pull from the list of numbers to send targeted text messages, and (3) uses a random and/or sequential generator to determine the sequence in which to send messages, the court rejected his argument that these features show that the system is an ATDS. Rather, the court focused on the fact that “the platform only contacts phone numbers specifically provided by consumers during DoNotPay’s registration process and not phone numbers identified in a random or sequential fashion.” Because the list itself was created in a way that was nonrandom and nonsequential, the court found that the system did not meet the TCPA’s definition of an ATDS, even if the system then randomly or sequentially dialed numbers from that preproduced list.

To read the opinion in Hufnus v. DoNotPay, Inc., click here.

Timms v. USAA Federal Savings Bank, No. 3:18-cv-01495, 2021 WL 2354931 (D.S.C. June 9, 2021)

The U.S. District Court, District of South Carolina granted a motion for summary judgment, finding that Aspect Unified IP (Aspect UIP) and Aspect Agent Initiated Contact (Aspect AIC) are not ATDSs under the Facebook definition. USAA Federal Savings Bank argued that Aspect UIP and Aspect AIC were not ATDSs because neither stored or produced telephone numbers using a random or sequential number generator. Instead, both dial numbers from a preproduced list provided to them. Plaintiff Margueritte Timms argued that, under Facebook, a system need only have the capacity to store or produce numbers using a random or sequential generator to be an ATDS, and she also argued that the system’s ability to use a random number generator to determine the order in which numbers are dialed from a preproduced list qualifies it as an ATDS. The court rejected both of Timms’ arguments, finding that even though “the automatic dialing capability alone is not enough to qualify a system as an ATDS,” Timms had introduced no evidence that the systems even had the capability to use a random or sequential number generator. Rather, the court found that both systems were “capable of making telephone calls only to specific telephone numbers from dialing lists created and loaded by” USAA, and that the systems “cannot store or produce telephone numbers using a random or sequential number generator.” The court further found that Aspect UIP’s use of a predictive dialer mode is not evidence that the system is an ATDS. Thus, using the Facebook definition, the court found that both systems were not ATDSs and granted USAA’s motion for summary judgment.

To read the opinion in Timms v. USAA Federal Savings Bank, click here.

Key takeaway: Courts have not yet reached consensus about whether a system that randomly or sequentially chooses numbers from a preproduced list falls within the Facebook definition of an ATDS, although the majority of the early case law weighs in favor of finding that such systems are not ATDSs.

Other ATDS Cases Acknowledging the Supreme Court’s Interpretation

Two additional recent post-Facebook cases discuss the Supreme Court’s reading of the ATDS definition but do not apply that definition to determine whether any particular system qualifies as an ATDS.

Barton v. Temescal Wellness, LLC, No. 20-40114, 2021 WL 2143553 (D. Mass. May 26, 2021)

In March 2021, before the Supreme Court decided Facebook, a Massachusetts district court decided Barton v. Temescal Wellness (Barton I). The court found that texts can be considered “calls” within the meaning of the TCPA, and it used pre-Facebook standards to conclude that the system in question could be considered an ATDS. In May 2021, after the Facebook decision, Temescal Wellness petitioned the court to reconsider its March decision in light of Facebook. On reconsideration, the court did not assess whether the system before it might constitute an ATDS under the new Facebook decision. Rather, in its second opinion, Barton v. Temescal Wellness (Barton II), the court found that the Facebook decision did not examine whether the TCPA regulated text messages, and reiterated its earlier holding that “text messages fall within the ambit of the TCPA.”

To read the opinion in Barton v. Temescal Wellness, LLC, click here.

Camunas v. National Republican Senatorial Committee, No. 21-1005, 2021 WL 2144671 (E.D. Pa. May 26, 2021)

Although this case was decided post-Facebook and cited Facebook for its definition of an ATDS as equipment with the “capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers,” the U.S. District Court, Eastern District of Pennsylvania did not examine whether the system in question used a random or sequential number generator. Rather, at the pleadings stage, the court relied on pre-Facebook factors, including the absence of a relationship between the parties, the nature of the message, the length of the sending number (i.e., short vs. long codes) and the number of messages for its ATDS assessment. Ultimately, the court found that the system in question was not an ATDS based on those pre-Facebook elements and granted a motion to dismiss the TCPA claim.

To read the opinion in Camunas v. National Republican Senatorial Committee, click here.

Key takeaway: While Facebook gives the current standard for finding whether a system is an ATDS with respect to the use of a random and sequential number generator, some courts may elect to examine factors considered determinative pre-Facebook and may follow pre-Facebook authority.

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