Advertising Law Blog

A few months ago, we blogged about Gragg v. Orange Cab Company, a TCPA case in which the court sided with the defendant on the grounds that the text messages in question were not sent by an automatic telephone dialing system (ATDS). That decision is being appealed, and a decision issued in a different case last month demonstrates that interpretations of the TCPA are still very much in a state of flux.

In Sterk v. Path, Inc., decided on May 30, 2014 in the Northern District of Illinois, the court took a very broad view of what constitutes an autodialer for purposes of TCPA liability. Path operates a cell phone application that searches for telephone numbers stored on its users’ cell phones and then allows the user to easily send out a mass text message to as many as 150 contacts. The plaintiff, Kevin Sterk, received a text message (through the Path app) from a woman he had met three years ago. The message asked Sterk to join the Path network. Sterk decided to sue Path under the TCPA for sending him an unsolicited text message. The motion decided last month was whether the Path app constituted an ATDS such that TCPA liability would be triggered. 

Under the TCPA, technology is an ATDS if  it “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.” Path argued that its technology did not and could not generate phone numbers randomly or sequentially and that it acquired the numbers by searching its users’ contact list. Unfortunately for Path, Judge Der-Yeghiayan employed a different standard than the one contained in the statute. He borrowed a much more expansive definition from FCC administrative rulings and applied it against Path. According to Judge Der-Yeghiayan, an ATDS is not limited to equipment with “the capacity to generate random or sequential numbers” but rather an ATDS is anything that is “able to dial numbers without human intervention.” Path argued to no avail that such a standard was “utterly divorced from the statutory language and at odds with the overwhelming weight of authority.” The court then held that the equipment used by Path makes calls from a stored list without human intervention, which is “comparable to predictive dialers.” The court granted partial summary judgment to the plaintiff on the ATDS issue, saying that there are “well-founded concerns” as to “threats to public welfare and safety by certain telemarketing practice.”

Although the litigation is not over (there is still the issue of whether the plaintiff consented to receive text messages), this ruling is certainly not helpful to social networking users and other senders of mass text messages, and shows how risky it is to rely on precedent from other cases, such as the Gragg decision.