Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—S.D. Cal.: Yahoo!’s Instant Messenger service may have violated TCPA, (Jul 8, 2014)

By Greg Hammond, J.D.

Yahoo! Inc. was unable to overturn an order denying the company’s motion for summary judgment of claims it violated the Telephone Consumer Protection Act (TCPA). In denying Yahoo!’s motion for reconsideration and—in the alternative—for interlocutory appeal, the federal district court in San Diego determined that there was no clear error in its previous conclusion that genuine issues of material fact remained regarding whether Yahoo!’s equipment has the required capacity to be considered an automatic telephone dialer system (ATDS) under the TCPA (Sherman v. Yahoo! Inc., July 3, 2014, Curiel, G).

Background. Rafael Sherman filed a class action against Yahoo!, claiming the company violated the TCPA when he was sent two text messages as part of Yahoo!’s Mobile SMS Messenger Service (PC to SMS Service). Sherman asserted that he received two cellular telephone messages, stating that a Yahoo! user had sent him a message and, "Hey get online I have to talk to you." In February 2014, the court issued an order denying Yahoo!’s motion for summary judgment, finding—in part—that issues of fact precluded summary judgment on the question of whether Yahoo!’s PC to SMS Service constituted an ATDS under the TCPA. Yahoo! subsequently filed a motion for reconsideration and, in the alternative, for interlocutory appeal.

Reconsideration. In support of its motion, Yahoo! argued that reconsideration was warranted for two reasons: (1) the court erred in relying on FCC commentary relating to "predictive dialers" to define the statutory term "ATDS" and (2) the court erred in relying on Yahoo!’s testimony regarding the company’s ability to write or install new software to dial telephone numbers, when it denied summary judgment. The court disagreed, noting that its construction of ATDS was premised on the statutory text of the TCPA and the FCC’s guidance on predictive dialers was unnecessary to reach the court’s conclusion. In addition, because the court found a clear mandate from the U.S. Ninth Circuit Court of Appeals that required Yahoo! to "demonstrate that no genuine issues of material fact exist as to whether the equipment at issue has the requisite current and future capacity to act as an ATDS in order to warrant summary judgment"—which Yahoo! failed to do—the court found that it did not err in denying summary judgment.

Interlocutory appeal. As an alternative to its motion for reconsideration, Yahoo! requested that the court certify its previous order denying summary judgment for appeal. The court noted that a party seeking certification to appeal an interlocutory order has the burden of establishing the existence of exceptional circumstances warranting an immediate appeal. Because the court did not find any exceptional circumstances that warrant interlocutory review, the alternative request was denied.

The case number is 3:13-cv-41-GPC-WVG.

Attorneys: Abbas Kazerounian (Kazerounian Law Group, APC) for Rafael David Sherman. Ian Charles Ballon (Greenberg Traurig LLP) for Yahoo! Inc.

Companies: Yahoo! Inc.

Cases: ConsumerProtection Privacy CaliforniaNews