In Dominguez v. Yahoo! Inc., — F.Supp.2d —-, 2014 WL 1096051 (E.D.Pa. 2014), Judge Baylson rejected the FCC’s interpretation of what an ATDS is, and found that an ATDS must have the present capacity to randomly generate numbers, which Yahoo!’s dialer did not.

However, these acknowledgements do not resolve the crux of the issue: whether the system had the capacity to “use a random or sequential number gen-erator to store or produce telephone numbers and then send a text message to those numbers” as required by the TCPA. Yahoo asserts that its service could not randomly or sequentially generate telephone numbers, but only sent messages to a user that had authorized them and only when that user received an email. Plaintiff has not offered evidence to dispute Yahoo’s assertion.  Nor does Mr. Snyder’s Declaration raise a material dispute of fact. Mr. Snyder’s definition of the term “sequence” or “sequential” fails to raise a material dispute of fact, since it focuses on the manner in which text messages are sent, not the way in which the numbers are generated.  Moreover, this Court finds the definition of “se-quential number generation” offered by Judge Lasnik of the Western District of Washington—“(for example) (111) 111–1111, (111) 111–1112, and so on”—to be persuasive. Gragg v. Orange Cab Co., Inc., No. C12–0576RSL, 2014 WL 494862, at *3 (W.D.Wash. Feb.7, 2014).  Further, Mr. Snyder’s conclusion that “the equipment used by the Defendant has the ca-pacity to store or produce cellular telephone numbers to be called, using a random or sequential number generator, or from a list of telephone numbers cannot be relied on to dispute Mr. Gopalkrishna’s Declaration. Mr. Snyder conveniently added the addition disjunctive phrase “or from a list of telephone numbers” to his declaration—a phrase that appears nowhere in the statutory definition of an ATDS. Snyder Decl. ¶ 64 (emphasis added). The inclusion of this additional phrase is misleading. Moreover, in-cluding this additional language renders Mr. Snyder’s Declaration entirely unreliable on this point, since it does not address the necessary inquiry here: whether Yahoo’s system constitutes an ATDS as defined by the statute.”FN6  As discussed above, Plaintiff has not offered any evidence to show that Yahoo’s system had the capacity to randomly or sequentially generate telephone numbers (as opposed to simply storing telephone numbers), as required by the statutory definition of ATDS. The Court thus finds that Yahoo did not send text messages to Plaintiff via an ATDS and, therefore, judgment must be granted in favor of Yahoo.

In footnote 4, the Court adopted the rationale of many of the petitions currently pending before the FCC – that “capacity” means “current capacity”.

FN4. Recently, courts and commentators have observed that many modern techno-logical devices, including smartphones, could store or produce numbers and dial such numbers without human intervention if outfitted with the requisite software. Thus, they have drawn a distinction between a system’s present capacity (as currently designed) and its potential capacity. See Gragg v. Orange Cab Co., Inc., No. C12–0576RSL, 2014 WL 494862, at *2 (W.D.Wash. Feb.7, 2014); Hunt v. 21 st Mortg. Corp., No. 2:12–CV–2697–WMA, 2013 WL 5230061, at *4 (N.D.Ala. Sept.17, 2013); 1 Data Sec. & Privacy Law § 9:69 (2013).

In footnote 6, the Court rejected any contrary intepretations from the FCC and, instead, relied on the clear language of the TCPA itself.

FN6. Mr. Snyder’s Declaration reflects a misunderstanding of the statutory require-ments, which require more than simply that the system store telephone numbers and send messages to those numbers without human intervention. Mr. Snyder’s Declaration references the Ninth Circuit in Satterfield, which quoted from Mr. Snyder’s expert report as follows: “[t]he use of stored numbers, randomly generated numbers or sequentially generated numbers used to automatically originate calls is a technical difference without a perceived distinction.” Snyder Decl. ¶ 49 (quoting Satterfield v. Simon & Schuster, Inc., 569 F.3d at 951). This citation to Satterfield is deceptive. The Ninth Circuit, in Satterfield, quoted Mr. Snyder’s report only to recount his opinions, which were in dispute, and specifically noted that Mr. Snyder’s report had not declared that the equipment had the requisite capacity. In fact, the court made clear that the district court had not focused on the proper inquiry regarding the system’s capacity thus resulting in conflicting testimony and a limited record, which prevented the circuit court from reversing the district court’s grant of summary judgment and, instead, required a remand to the district court. The court did not adopt Mr. Snyder’s views. Mr. Syder also states, in his Declaration, that “the FCC has held that prohibitions under the TCPA apply to stored lists of telephone numbers as well as random or sequentially generated numbers.” Snyder Decl. ¶ 49; id. ¶ 61 (“The FCC has held that prohibitions under the TCPA apply to lists of telephone numbers as well as random or sequentially generated numbers.” (citing Rules and Regs. Implementing Tel. Consumer Protection Act of 1991, CG Dkt. No. 02–278, Jan. 4, 2008 ¶¶ 12–14)). In light of the Ninth Circuit’s determination, in Satterfield, that the statutory text of the TCPA regarding the definition of an ATDS is “clear and unambiguous,” we are not bound by the FCC’s interpretation. 569 F.3d at 951; see Swallows Holding, Ltd. v. C.I.R., 515 F.3d 162, 170 (3d Cir.2008) ( “Under Chevron, if the statutory language is clear and unambiguous, our inquiry ends and the plain meaning of the statute governs the action.”). Even so, this Declaratory Ruling pertains to the unique characteristics of predictive dialers, and there is no contention here that Yahoo’s Email SMS Service is a predictive dialer.