Dominquez v. Yahoo, Inc., No. 14-1751 (3rd  Cir. Oct. 23, 2015)

Plaintiff bought a cell phone that came with a reassigned number. The previous owner of the number had subscribed to a Yahoo notification service, which sent text messages every time an email was sent to the previous owner’s linked Yahoo account. Because the previous owner never canceled the service, Plaintiff received text messages every time the previous owner received an email totaling 27,809 text messages over a 17 month period.

The trial court originally granted summary judgment in Yahoo’s favor, concluding that the messages were not sent using an Automatic Telephone Dialing System (ATDS). After appellate briefing and oral argument, the FCC released its Declaratory Rule In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 2015 WL 4387780 (F.C.C. July 10, 2015).

Remanding the case for further consideration by the trial Court, the U.S. Court of Appeals for the Third Circuit stated:

Although hardly the model of clarity [the FCC’s] orders (as we interpret them) hold that an autodialer must be able to store or produce numbers that themselves are randomly or sequentially generated ‘even if [the autodialer is] not presently used for that purpose.’ But importantly, in the most recent ruling the FCC also clarified that neither ‘present ability’ nor the use of a single piece of equipment is required. Thus, so long as the equipment is part of a ‘system’ that has the latent ‘capacity’ to place autodialed calls, the statutory definition is satisfied.

The Court agreed with the trial court’s definition of “random or sequential” number generation stating that the phrase refers to the numbers themselves rather than the manner in which they are dialed, adding that to the extent the trial court held otherwise, the Court clarifies that the statutory definition is explicit that the autodialing equipment may have the capacity to store or produce the randomly or sequentially generated numbers to be dialed, adding that it acknowledged lack of clarity how a number can be stored (as opposed to produced) using a “random or sequential number generator.

Important to the Court, however, was the “lack of evidence” supporting judgment in Yahoo’s favor, which consisted of a “conclusory affidavit of its expert,” stating that “‘[t]he servers and systems affiliated with the email SMS Service did not have the capacity to store or produce numbers to be called, using a random or sequential number generator to call those numbers,'” adding that “[b]ecause this is an issue of heightened importance in light of the 2015 FCC Ruling, and the District Court did not previously have the benefit of the FCC’s ruling in addressing the issue,” remand is appropriate.