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Judge denies Yahoo's motion for summary judgment in TCPA lawsuit over text messaging service

By Andrew Thomason | Dec 18, 2014

Litigation over Yahoo! Inc.'s text messaging service will move forward after a federal judge denied the Internet giant's motion for summary judgment.

U.S. District Judge Manish S. Shah's Dec. 11 decision deals with Yahoo's Mobile SMS message service that allows users to send personalized text messages to cell phone users via a computer application.

Rachel Johnson and Zenaida Calderin filed separate suits over the service, alleging it violates the federal Telephone Consumer Protection Act (TCPA), which prohibits companies from using automatic telephone dialing systems to contact cell phones.

The plaintiffs' suits, which initially sought class action status, appear to have been consolidated since they were filed earlier this year.

While Yahoo's service, for the most part, requires human input to send a message, it can send out two messages automatically: a welcome message and a warning message. A welcome message is sent to a person's phone, letting him or her know someone is sending a text message through Yahoo and the warning message is sent when a person has received three consecutive text messages through the service, but has not replied.

The TCPA, the law at the crux of the suit, defines an automatic telephone dialing system by its ability to "store or produce telephone numbers to be called, using a random or sequential number generator" without human intervention.

Courts in the past have found the TCPA treats a text message the same as a phone call, a determination Shah followed in his recent ruling that denied Yahoo's motion for summary judgment.

In making the request, Yahoo had argued all messages sent, including welcome warning messages, are triggered by some previous human interaction, and thus, are legal under the federal law.

Additionally, Yahoo claimed its system does not count as an automatic dialing because the service does not store or produce the numbers called, rather it contacts one of three databases for those numbers. One database consists of any number a user has sent a text message to, another contains numbers in an address book filled out by the user, and the last database temporarily holds numbers users have sent messages to recently.

In his 14-page ruling, Shah said he thinks the Federal Communications Commission's interpretation of the TCPA is at odds with the actual statute, specifically that one does not always have to use or have the capacity to use a random or sequential number generator to violate the law.

"I agree with Yahoo! that the FCC’s interpretation on this point conflicts with the statutory requirement ... And if tasked with applying only the statute’s language, I would conclude that Yahoo!’s system does not constitute an 'automatic dialing system,'" Shah wrote, adding, however, that he is bound by the FCC's interpretation in this instance.

In that respect, Shah said it is entirely possible that Yahoo's system could be seen as an automatic dialing system and as such, denied the plaintiff's request for summary judgment to allow the case to proceed.

Shah said the plaintiff's' assertion that Yahoo's text messaging system, when paired with one of the three tangential databases, constitutes an automatic dialing system and therefore violates the TCPA raises some interesting issues.

"However, it remains to be seen whether the various components at play constitute one singular system, or multiple independent systems (some of which happening to share common components)," Shah said.

In his ruling, the judge also denied the plaintiffs’ motion to dismiss an expert report in the case submitted by Yahoo. Court records show a status hearing is set for Jan. 23 and there is an April 2015 discovery deadline.

Records show Yahoo is represented by a team of Greenberg Traurig attorneys, including Francis A. Citera and Lucia Lynn Marker-Moore in Chicago and Ian Charles Ballon, Justin Alexander Barton and Lori Chang in Los Angeles.

Johnson is represented by Chicago attorneys Katherine Marie Bowen, Keith James Keogh, Michael S. Hilicki and Timothy J. Sostrin of Keogh Law Ltd.

Calderin is represented by Chicago attorney Alexander I. Arezina and a group of attorneys with DiTommaso Lubin P.C. in Oakbrook Terrace, including John Auchter, Patrick Doyle Austermuehle, Vincent Louis DiTommaso, Peter Scott Lubin, John Robert McInerney and Andrew Charles Murphy.

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