Yahoo! Scores Significant Win in Email-to-SMS Lawsuit

March 27, 2014 · by Venkat Balasubramani · in Content Regulation, Spam

We’ve blogged a bunch about text spam lawsuits in general, and about those against Yahoo! as well. Most recently, a judge denied Yahoo!’s request to dismiss a lawsuit relating to IM-to-SMS functionality. (See “TCPA Claim Over Yahoo!’s IM to SMS Messaging Survives Summary Judgment.”)

shutterstock / popart – pop art background office stamp with the word spam

In contrast to the result in the California case, in federal court in Pennsylvania, Yahoo! prevailed in a putative class action alleging that its email-to-SMS functionality violated the TCPA.

Plaintiff alleged that he obtained a cell phone and number and that the previous owner of the number had enrolled in Yahoo!’s email-to-SMS functionality. That is, plaintiff alleged that he never signed up to receive any text messages from Yahoo! but nevertheless received them.

Plaintiff filed a lawsuit in April 2013. Yahoo! quickly moved for summary judgment on the basis that Yahoo! did not use an “autodialer” as required by the statute and case law.

The statute covers unsolicited texts sent using equipment which has the capacity to store or produce numbers “using a random or sequential number generator” and to dial such numbers. The Ninth Circuit in Satterfield v. Simon & Schuster articulated a watered down standard for this requirement: “a system need not only store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do so.” (See this post for a discussion of Satterfield.)

After limited discovery, the court grants Yahoo!’s motion and dismisses the lawsuit. The court relies on a declaration from a product manager from Yahoo! to the effect that the equipment used by Yahoo! “[does] not have the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to call those numbers.” Plaintiff tried to contest the product manager’s declaration and offer his own expert testimony, but the court is not persuaded. Although unclear, the court seems to say that the “system” can generate random numbers and then text those numbers, but can only perform both of those functions if it has some software installed. At any rate, the court does not say that it’s using a standard that’s different from the one in Satterfield, but seems to imply that the requirement to generate random numbers and then dial (or text) them is conjunctive, rather than disjunctive (i.e., the equipment has to have the ability to generate numbers and call those numbers that are generated). Interestingly, the court focuses on the fact that the equipment alone does not have that capacity, but with the installation of software it would easily obtain it.

This is a BIG win for Yahoo! Make no mistake about it. Since it’s a district court opinion, it will have limited effect, until affirmed, but how to explain this:

– Yahoo! engaged in procedural jockeying that turned out to be advantageous (filing an early summary judgment motion)

– the trial court parsed Satterfield and employed a slightly different definition

– Yahoo!’s engineer did a nice job articulating minor differences between the capacity of the equipment and what was required by the statute

– the trial court recognized this lawsuit for what it was – a bogus attempt to capitalize on an overly broad statute

Either way, the problem of recycled phone numbers is not a very easy one to solve, but perhaps Yahoo! or the phone companies will put some energy into trying to come up with some fixes. (Cf. Telephone Numbers as Identity Authenticators–Abrams v. Facebook.) In the meantime, this lawsuit will likely be consigned to the dustbin, where it belongs.

Case citation: Dominguez v. Yahoo!, Inc., 2014 WL 1096051 (E.D. Pa. Mar. 20, 2014)

Confirmatory Opt-out Text Message Not Actionable Under the TCPA — Ryabyshchuck v. Citibank

Confirmatory Opt-Out Text Message Doesn’t Violate TCPA – Ibey v. Taco Bell

Court Affirms Robust ISP Protection For Blocking Bulk Emails — Holomaxx v. Microsoft/Yahoo

Telephone Numbers as Identity Authenticators–Abrams v. Facebook

Group Text Services Grapple with TCPA Class Actions

Courts Allows Text Spam Class Action Against Voxer, a Cell Phone Walkie-Talkie App — Hickey v. Voxernet

Ninth Circuit Revives TCPA Claim–Satterfield v. Simon & Schuster

Cellphone Spam Violates TCPA–Joffe v. Acacia Mortgage

Text Spam Lawsuit Against Citibank Moves Forward Despite Vague Allegations of Consent — Ryabyshchuk v. Citibank

Court Rejects Constitutional Challenge to TCPA Based on Vagueness in “Prior Express Consent” Exception — Kramer v. Autobytel, Inc.

Another Court Finds that TCPA Applies to Text Messages — Lozano v. Twentieth Century Fox Film Corp.