Antitrust Law Daily Wrap Up, PRIVACY—N.D. Ill.: Fact issues preclude summary judgment in cell phone users’ TCPA claims against Yahoo!, (Dec 15, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in Chicago has denied Yahoo’s motion for summary judgment in an action against the Internet service provider for sending unsolicited text message notifications to mobile telephone users in violation of the Telephone Consumer Protection Act (TCPA) (Johnson v. Yahoo!, Inc., December 11, 2014, Shah, M.).

Yahoo! Inc. provides an instant messaging service for registered users of Yahoo called Yahoo! Messenger. The service allows Yahoo users to send instant messages to mobile devices from their personal computers through the Yahoo platform, Mobile SMS Messenger Service (PC2SMS), which converts the instant messages to text messages so they can be received on the mobile devices. PC2SMS interacts, either directly or indirectly, with three Yahoo databases. The first is the MO/MT database which keeps track of all the cell phone numbers that PC2SMS has ever sent text messages. The second is the Address Book which contains the Yahoo user’s contacts list. The third is a Session database, which temporarily records cell phone numbers that have sent "INFO" messages to Yahoo.

A Yahoo user can send a message to a cell phone as a text message by either manually inputting the recipient’s cell phone number within Yahoo Messenger or selecting the recipient’s name from the user’s contacts list. In addition to user-originated messages, PC2SMS sends system messages, such as "Welcome" messages whenever a Yahoo user sends a personalized message to a cell phone user that has not previously received a message via the Yahoo service. The mobile phone user can then use three methods of opt-out of receiving future Yahoo service messages.

Cell phone subscribers Rachel Johnson and Zenaida Calderin filed suit against Yahoo, asserting that they each received two text messages from Yahoo that violated the TCPA. The first message stated that an acquaintance sent them a personalized message and the second message was Yahoo’s explanation for why they received the first message. Yahoo moved for summary judgment, contending that the second message was not within the scope of the TCPA because it was not sent using an automatic telephone dialing system (ATDS).

The court explained that the TCPA defines an ATDS as equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator to dial such numbers. The Federal Communications Commission (FCC), in prescribing regulations implement the Act, construed the term to include systems which, like predictive dialers, had the capacity to dial stored numbers without human intervention. Noting that Yahoo’s platform did not constitute an ATDS under the plain language of the TCPA since it did not use a random or sequential number generator, the court opted to follow the FCC’s interpretation and clarified that the issue in the case was whether Yahoo’s PC2SMS service had the capacity to dial numbers without human intervention.

The court determined that the plaintiffs presented evidence showing that Yahoo’s PC2SMS service, in conjunction with the Address Book, had the capacity to send text messages to numbers pulled from a database. In rejecting Yahoo’s contention that the user’s local application retrieves the number from the Address Book and not PC2SMS, the court noted that there was no legal significance whether PC2SMS pull numbers from a database directly or indirectly since the components parts taken together could constitute an ATDS. The was also evidence that Yahoo’s Session data stored cell phone numbers that were pulled for the purpose of sending text messages.

According to the court, when a user sends a personalized message to a contact, it was clear that the transmission involved human intervention. However, it was not clear that the system messages were sent without human intervention. Although every ATDS requires an initial act of human agency, it did not follow that every subsequent call the system dials or message it sends is a product of human intervention, in the court’s view. Since there were genuine issues of material fact as to whether PC2SMS could pull numbers and dial them without a person ordering a specific system message, summary judgment was inappropriate.

The case is No. 14 CV 2028.

Attorneys: Keith James Keogh (Keogh Law, Ltd.) for Rachel Johnson. Francis A. Citera (Greenberg Traurig, LLP) for Yahoo!, Inc.

Companies: Yahoo!, Inc.

Cases: Privacy IllinoisNews