Following the Supreme Court of the United States ruling in Facebook, Inc. v. Duguid, the U.S. Court of Appeals for the Eighth Circuit recently affirmed the rulings of multiple trial courts to grant summary judgment in favor of the defendants, holding that an automated marketing system that sends promotional text messages to phone numbers randomly selected from a database of customers’ information is not an automated telephone dialing system (ATDS) under the federal Telephone Consumer Protection Act.
A copy of the opinion in Beal v. Outfield Brew House, LLC is available at: Link to Opinion.
The defendants, two bar establishments, used marketing software to send text messages to former and potential customers. The plaintiffs were persons 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 information of the establishments’ former and potential customers. The establishments’ employees manually entered the contact information, including phone numbers, into the database. The software was not capable of randomly or sequentially generating phone numbers.
The plaintiffs argued in multiple lawsuits that these messages violated the TCPA, 47 U.S.C. § 227, because they were sent using an ATDS without their consent.
In each of the plaintiffs’ cases, the trial courts granted summary judgment in favor of the defendants, holding that the software did not meet the statutory definition of an ATDS. The plaintiffs brought a consolidated appeal before the Eighth Circuit.
The sole dispute on appeal was whether the software fell within the TCPA’s definition of an ATDS.
As you may recall, the TCPA 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.” See 47 U.S.C. § 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 phone numbers from an existing list of contacts.
To answer this question, the Eighth Circuit looked at the ordinary meaning of the term “produce.” When interpreting a statute, courts “begin by analyzing the statutory language, ‘assum[ing] that the ordinary meaning of that language accurately expresses the legislative purpose.’” United States v. I.L., 614 F.3d 817, 820 (8th Cir. 2010).
Because a “random or sequential number generator” does the producing under the language of § 227(a)(1), and because the software did not “produce telephone numbers to be called,” the Eighth Circuit held that the software did not fall under this definition.
The plaintiffs pointed to dictionary definitions and common uses of the term “produce” to suggest it includes “select” or “bring forth.” However, the Eighth Circuit rejected this approach as isolated and contextless. See U.S. Nat’l Bank of Or. v. 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 can be helpful, they will derail accurate interpretation if courts improperly determine that the meaning of a term used in a statute includes any existing definition or use of that term.
The Eighth Circuit cited to the recent Supreme Court of the United States ruling in Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), to bolster its analysis. In Facebook, the Supreme Court emphasized that § 227 “target[s] a unique type of telemarketing equipment that risks dialing emergency lines randomly or tying up all the sequentially numbered lines at a single entity.” Id. at 1169–71. The Supreme Court reasoned, “[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone numbers would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.” Id.
Furthermore, the Supreme Court in 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 “store” to “clarify the domain of prohibited devices” rather than specify a distinct category of systems which store but do not produce phone numbers. Facebook, 141 S. Ct. at 1172 n.7. The Eighth Circuit rejected the plaintiffs’ argument that the Supreme Court was suggesting that the term “produce” includes randomly selecting from a database of non-randomly collected phone numbers. This would have conflicted with the Supreme Court’s overall conclusion that a system which merely stores and dials phone numbers is not an ATDS.
Accordingly, the Eighth Circuit concluded that the software was not an ATDS under the TCPA and affirmed the trial courts’ grants of summary judgment in favor of the establishments.