8th Cir. Holds text marketing system was not ATDS under TCPA

Following the decision of the Supreme Court of the United States in Facebook, Inc. v. DuguidThe United States Court of Appeals for the Eighth Circuit recently upheld decisions by several lower courts to grant summary judgment in favor of defendants, finding that an automated marketing system that sends promotional text messages to randomly selected telephone numbers from a database of customer information is not an automated telephone dialing system (ATDS) under the federal Telephone Consumer Protection Act.

A copy of the notice in Beal vs. Outfield Brew House, LLC is available on: Link to Reviews.

The defendants, two bar establishments, used marketing software to send text messages to former customers and potential customers. The callers were individuals who received promotional text messages from at least one of the establishments through the marketing software.

For context, the software was used to maintain a database that stored the contact details of the establishments’ former and potential customers. Facility employees manually entered contact information, including phone numbers, into the database. The software was not able to generate phone numbers randomly or sequentially.

Plaintiffs argued in multiple lawsuits that these messages violated the TCPA, 47 USC § 227, because they were sent using an ATDS without their consent.

In each of the plaintiffs’ cases, the trial courts entered summary judgment in favor of the defendants, finding that the software did not meet the legal definition of an ATDS. The plaintiffs filed a consolidated appeal before the Eighth Circuit.

The only dispute on appeal was whether the software fell within the TCPA’s definition of an ATDS.

Recall that the TCPA defines an ATDS “as equipment that has the ability (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) dial those numbers. See 47 USC § 227(a)(1).

The parties disputed the meaning of the term “produce”, as used in § 227(a)(1)(A), and whether it included the software’s random selection of telephone numbers from a list of existing contacts.

To answer this question, the Eighth Circuit considered the ordinary meaning of the term “produce.” When interpreting a statute, courts “start by analyzing the wording of the statute, “assume[ing] that the plain meaning of that language accurately expresses the legislative purpose. USA vs IL614 F.3d 817, 820 (8th Cir. 2010).

Because a “random or sequential number generator” does the output under § 227(a)(1), and because the software did not “output telephone numbers to call”, the eighth circuit has judged that the software did not fall under this definition.

Complainants have referred to dictionary definitions and common uses of the term “produce” to suggest that it includes “select” or “produce”. However, the Eighth Circuit dismissed this approach as isolated and without context. To see US Nat’l Bank of Gold. c. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993). In the Court’s view, while dictionary definitions and common uses of a word may be helpful, they will derail accurate interpretation if courts erroneously determine that the meaning of a term used in a statute includes any existing definition or use of that term.

The Eighth Circuit cited the recent U.S. Supreme Court decision in Facebook, Inc. v. Duguid, 141 S.Ct. 1163 (2021), to support his analysis. In Facebookthe Supreme Court pointed out that § 227 “objective[s] a unique type of telemarketing equipment that may randomly dial emergency lines or tie up all sequentially numbered lines to a single entity. Identifier. at 1169–71. The Supreme Court held:[e]expanding the definition of an autodialer to encompass any equipment that simply stores and dials phone numbers would take a chainsaw for those nuanced issues when Congress wanted to use a scalpel. Identifier.

In addition, the Supreme Court of Facebook addressed the question of how a system could “store” a phone number without first “producing” it. The Supreme Court explained that Congress may have used the term “store” to “clarify the domain of prohibited devices” rather than specifying a separate category of systems that store but do not produce phone numbers. Facebook, 141 S.Ct. at 1172 n.7. The Eighth Circuit rejected plaintiffs’ argument that the Supreme Court was suggesting that the term “produce” includes random selection from a database of non-randomly collected telephone numbers. This would have contradicted the Supreme Court’s general conclusion that a system that merely stores and dials telephone numbers is not an ATDS.

As a result, the Eighth Circuit found that the software was not an ATDS under the TCPA and upheld the trial court’s summary judgment rulings in favor of the establishments.

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