A California federal court judge sided with GroupMe’s group messaging service in a Telephone Consumer Protection Act lawsuit, agreeing with the defendant that it did not use an automated telephone dialing system in violation of the statute.  

Brian Glauser filed suit against GroupMe in 2011. He alleged that he received two unsolicited text messages from the app reading, “Hi Brian Glauser, it’s Mike L. Welcome to GroupMe! I just added you to ‘Poker’ w/ Richard L. Text back to join the conversation.” And “GroupMe is a group texting service. Standard SMS rates may apply. Get the app at … to chat for free. Reply #exit to quit or #help for more.”

After receiving these two welcome texts, Glauser received multiple messages from the Poker group members. When he did not respond, GroupMe sent a third text saying, “Hey, are you there? GroupMe is more fun when you participate! We’ll remove you soon unless you reply to the group or text #stay. Reply #exit to leave.”

More messages were exchanged by the group members discussing plans to schedule a poker game. When Glauser again did not respond, GroupMe sent a fourth message: “We haven’t heard from you, so we removed you from this group to be on the safe side. Don’t worry, though. You can always get back in by replying to this text.” Glauser then responded with a text reading “In,” and GroupMe added him back to the group.

Glauser then filed suit. He claimed the two welcome texts violated the TCPA. The court stayed the case in January 2012 pending a decision by the Federal Communications Commission on the definition of an automatic telephone dialing system, among other issues. When the FCC took no action, the court lifted the stay in March 2014 and the parties filed cross-motions for summary judgment.

GroupMe told the court that it was not liable under the TCPA because it did not use an ATDS as defined by the statute. 47 U.S.C. Section 227(a)(1) defines an ATDS as “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

The company’s system did not have the present capacity to function as an autodialer, GroupMe said. While it may have had the potential capacity to function as an ATDS, such a test would create the potential for liability under the statute for any smartphone or device.

Noting similar decisions from federal courts in Alabama and Washington, U.S. District Court Judge Phyllis J. Hamilton agreed. She distinguished two opinions from the Ninth U.S. Circuit Court of Appeals as limited to the issue of “capacity vs. actual use” and not “present capacity vs. potential capacity.”

Having determined that “the Ninth Circuit has not yet spoken on the issue of ‘present capacity’ versus ‘potential capacity,’” the court “finds significant the use of the present tense by the statute, by the FCC, and by the Ninth Circuit.”

“[A] ‘potential’ capacity rule would ‘capture many of contemporary society’s most common technological devices within the statutory definition.’ Therefore, the court finds that the relevant inquiry under the TCPA is whether a defendant’s equipment has the present capacity to perform autodialing functions, even if those functions were not actually used,” Judge Hamilton wrote.

GroupMe further argued that its equipment did not have the present capacity to dial numbers randomly or sequentially. The court described the FCC’s expansion of the statutory definition of an ATDS to include predictive dialers, but emphasized that the 2008 Commission ruling “made clear that the defining characteristic of an ‘autodialer’ is not the ability to make calls randomly or sequentially—instead, the ‘basic function’ of an autodialer is ‘the capacity to dial numbers without human intervention.’”

In the case of GroupMe, human intervention was required, Judge Hamilton determined. The welcome texts sent to Glauser were triggered by the group creators, she said, rejecting the plaintiff’s argument that the entire process was automated.

In granting the defendant's motion for summary judgment, the court noted that the “Plaintiff admits the welcome texts were triggered when ‘GroupMe obtained the telephone numbers of the newly added group members’ (including himself), and ignores the fact that GroupMe obtained those numbers through the actions of the group’s creator.” “Thus, the welcome texts were sent to plaintiff as a direct response to the intervention of Mike L., the ‘Poker’ group creator.”

To read the order in Glauser v. GroupMe, click here.

Why it matters: The decision is a victory not only for GroupMe, but for other TCPA defendants litigating the issue of present capacity versus potential capacity with regard to the use of an ATDS. Judge Hamilton distinguished the Ninth Circuit cases cited by the plaintiff to support the potential capacity argument as focused on different issues. She wrote that she believed “the Ninth Circuit has clearly rejected a focus on ‘actual use’ rather than ‘capacity,’ but has not yet spoken on the issue of ‘present capacity’ versus ‘potential capacity.’” Given the significance of the issue, the federal appellate panel may get its chance if the plaintiff appeals.