Court Defines Application of Telephone Act to Promotional Text Messages

Janie Thompson 
Janie Thompson
November 4, 2014

Is that unwanted promotional text message coming from a human or a machine? It matters for purposes of the Telephone Consumer Protection Act.

In Marks v. Crunch San Diego, LLC, Case No. 14-cv-00348-BAS-BLM (S.D. Cal. Oct. 23, 2014), the United States District Court for the Southern District of California provided some guidance regarding the meaning of an Automated Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).

Crunch, which operates gyms in San Diego, California, sent promotional text messages to its members and prospective customers via a third-party platform. That platform adds numbers to its database only when Crunch manually inputs the number, an individual responds to promotional text messages from Crunch, or an individual inputs the number and consents to receiving numbers on Crunch’s website. The class plaintiff, Jordan Marks, was a member of Crunch and alleges that he received three unwanted promotional text messages after joining the gym.

The court concluded that the gym’s text messages did not violate the TCPA because the platform did not meet the definition of an ATDS, and granted summary judgment in favor of Crunch. The court explained that an ATDS must have the capacity to store or produce telephone numbers without human intervention, and the platform used by Crunch required people to manually enter phone numbers into the database.

The court distinguished Sherman v. Yahoo! Inc., 997 F. Supp. 2d 1129, 1136 (S.D. Cal. 2014), in which the court deemed a similar platform an ATDS because Yahoo! could write software to create the capacity to store or produce telephone numbers without human involvement. In Marks, by contrast, Crunch did not have the capacity itself to write new software and the third-party platform expressly required human intervention to create the phone number database.

The court joined other recent decisions declining to follow the Federal Communications Commission’s (“FCC”) broad interpretation of ATDS as “any equipment with the capacity to generate numbers and then dial them without human intervention.” The court explained that the FCC does not have statutory authority to change the definition of ATDS. Further, as previously held in Gragg v. Orange Cab. Co., 995 F. Supp. 2d 1189, 1193 (W.D. Wash. 2014), the FCC’s definition would lead to “absurd results” potentially making any programmable device—including smart phones and computers—into an ATDS.

(This article previously appeared in a Cyberspace Law e-Bulletin sent to members of the State Bar of California.)