3rd Cir. Affirms that Yahoo! Did Not Use an ATDS to Send Text Messages

In Dominguez v. Yahoo!, Inc., — F.3d —- (3rd Cir. 2018), the Court of Appeals for the Third Circuit found that Yahoo! did not use an ATDS to send text messages, as the Court of Appeals interpreted the ACA Int’l decision.

The decision in ACA International has narrowed the scope of this appeal.16 In light of the D.C. Circuit’s holding, we interpret the statutory definition of an autodialer as we did prior to the issuance of 2015 Declaratory Ruling. Dominguez can no longer rely on his argument that the Email SMS Service had the latent or potential capacity to function as autodialer. The only remaining question, then, is whether Dominguez provided evidence to show that the Email SMS Service had the present capacity to function as autodialer.Three of Dominguez’s expert reports offer nothing to help resolve the present capacity question. Both the Krishnamurthy Report and the Christensen Report focus on latent or potential capacity. The Krishnamurthy Report proposes five possible ways in which the Email SMS Service could be modified to generate random or sequential numbers. All of these proposed modifications would require several months of work to implement.18 The Christensen Report is similarly speculative. Christensen opines that “[i]t would have been quite easy for one of normal skill in software programming to configure an application to cause mobile messages to be sent based on integration of off-the-shelf, commonly available random number generator programs,” and concludes that “the equipment and systems that Yahoo relied upon … had the latent capacity to generate random and/or sequential ten digit numbers.”19 A third report, by Jeffrey Hansen, does not use the term “latent capacity” but presents similar analysis. The Hansen Report begins with the generalized assertion that “all computers can generate random or sequential numbers.” The report then proposes six computer code commands, which, Hansen asserts, could be written into Yahoo’s operating system in order to generate wireless numbers randomly or sequentially.21In his supplemental filings, Dominguez argues that, under ACA International, certain limited modifications may nevertheless fall within the scope of present capacity. He emphasizes the D.C. Circuit’s comment that “[v]irtually any understanding of ‘capacity’ thus contemplates some future functioning state, along with some modifying act to bring that state about.” Though that may be true, it does not follow that the Krishnamurthy, Christensen, or Hansen Reports create a triable factual issue regarding the present capacity of the Email SMS Service. The reports are founded upon the exact type of hypothesizing that is foreclosed by ACA International. The District Court was therefore correct to exclude the Krishnamurthy, Christensen, and Hansen Reports, as they are irrelevant to the present capacity inquiry.24Dominguez’s final expert report, the supplemental declaration of Randall Snyder, also falls short of the admissibility standard. Snyder purports to address present, not just latent, capacity, repeatedly opining that “Yahoo’s Email SMS Service system had the ability to generate random numbers and, in fact, did generate random numbers.” This opinion, however, is supported by little more than the same type of overbroad, generalized assertions found in the Hansen Report. Specifically, Snyder opines that “[t]he ability to generate random numbers is a fundamental function inherent in information technology computer systems employing the most common operating systems, security protocols and encryption.” Snyder goes on to explain the role that random number generators play in various commonly available computer operating systems, such as Microsoft Windows, Apple Mac OS, and UNIX, and posits that “it is a straightforward and very basic algorithm to use the available random number generation functions to generate ten-digit telephone numbers.” Notably absent, however, is any explanation of how the Email SMS System actually did or could generate random telephone numbers to dial. In that regard, the Snyder Supplemental Declaration is hardly less speculative than the expert reports of Krishnamurthy, Christensen, or Hansen—and raises the same concerns about the TCPA’s breadth that the D.C. Circuit addressed in ACA International. Because it does not shed light on the key factual question actually at issue in this case—whether the Email SMS System functioned as an autodialer by randomly or sequentially generating telephone numbers, and dialing those numbers—the Snyder Supplemental Declaration, like the other expert reports, lacks fit or relevance and was therefore properly excluded. Ultimately, Dominguez cannot point to any evidence that creates a genuine dispute of fact as to whether the Email SMS Service had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers. On the contrary, the record indicates that the Email SMS Service sent messages only to numbers that had been individually and manually inputted into its system by a user. There can be little doubt that Dominguez suffered great annoyance as a result of the unwanted text messages. But those messages were sent precisely because the prior owner of Dominguez’s telephone number had affirmatively opted to receive them, not because of random number generation. The TCPA’s prohibition on autodialers is therefore not the proper means of redress.

The Court of Appeals might also have re-upped standing arguments on traceability, as explained in such cases as Romero v. Department Stores National Bank, 199 F.Supp.3d 1256, 1265 (S.D. Cal. 2016), where the California District Court held that a TCPA plaintiff must show that their injury from auto-dialed calls was substantively different than had the calls been manually dialed:

Moreover, the specific facts of this case reveal that any harm suffered by Plaintiff is unconnected to the alleged TCPA violations. Defendants here were creditors of Plaintiff and were attempting to collect a debt. They were calling Plaintiff’s cell phone because that was the only telephone number she provided them. Although these calls seeking to collect debts may have been stressful, aggravating, and occupied Plaintiff’s time, that injury is completely unrelated to Defendants’ use of an ATDS to dial her number. Plaintiff would have been no better off had Defendants dialed her telephone number manually”.

The 3rd Circuit’s statement that “But those messages were sent precisely because the prior owner of Dominguez’s telephone number had affirmatively opted to receive them, not because of random number generation“ certainly suggests that liability (or even standing) must be based on injury is “traceable” to the use of an ATDS rather than simply to the existence of the call itself.