In Beal v. Outfield Brew House, LLC, --- F.4th ---, 2022 WL 868697 (8th Cir. Mar. 24, 2022), the Eighth Circuit considered whether an automated marketing system that was used to send promotional text messages to randomly selected phone numbers qualified as an ATDS within the purview of the TCPA. See id. at *1. The Eighth Circuit concluded that the automated marketing system did not "produce" telephone numbers to be called and, therefore, did not qualify as an ATDS. See id.
The case arose because the Appellants received promotional text messages from Outfield Brew House, LLC and/or Truman Road Development, LLC ("Appellees"). See id. Appellants claimed these text messages "violated the TCPA because they were sent using an [ATDS] without Appellants' consent." Id. Specifically, Appellants claimed the text messages violated § 227 of the TCPA, which, among other things, prohibits the use of automatic telephone dialing systems to make calls to cell phone numbers unless the call is made for emergency purposes or with the prior express consent of the called party. See 42 U.S.C. § 227(b)(1)(A)(iii). The text messages at issue were sent via a marketing software called "'Txt Live,' which allows [Appellees] to send text messages to former and potential customers." Beal, 2022 WL 868697, at *2. Thus, the question before the court was whether the Txt Live system fell within the TCPA's definition of autodialer.
Looking to the function of the Txt Live software, the court noted that Txt Live maintained a database that stored the contact information of the Appellees' former and potential customers. See id. at *1. The Appellees' employees "manually enter[ed] the contact information, including phone numbers, into the Txt Live database." Id. The court further noted that "Txt Live is not capable of randomly or sequentially generating phone numbers." Id. Instead, to send a mass text message, "employees first narrow the list of recipients using filters." Id. The employees then "select the number of potential customers to whom the text message will be sent. The employees then draft or select the content of the message and hit 'send.'" Id. Once an employee hits send, Txt Live applies the chosen filters, shuffles the target contacts using a numerically-based randomizer, the manually entered numbers are shuffled, Txt Live selects the recipients from the top of the shuffled list, and Txt Live sends then message to the selected phone numbers. See id.
The court explained that, under the TCPA, an ATDS is "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." Id. at *2 (quoting 47 U.S.C. § 227(a)(1)). The parties disputed whether the word "produce" encompassed "Txt Live's random selection of phone numbers from an existing list of contacts." Id. The court concluded that it did not. See id.
The Eighth Circuit explained that the plain meaning of "produce" was evidenced by its context. See id. Thus, the court determined that "[u]nder the language of § 227(a)(1), a 'random or sequential number generator' does the producing." Id. The court further explained that "a generator produces by generating." Id. The court concluded that "[b]ecause Txt Live does not generate phone numbers to be called, it does not 'produce telephone numbers to be called' for purposes of § 227(a)(1) of the TCPA." Id. The court also analyzed the Supreme Court's ruling in Facebook v. Duguid, --- U.S. ----, 141 S. Ct. 1163, 209 L.Ed.2d 272 (2021), and determined that "Txt Live is exactly the kind of equipment Facebook excluded from § 227(a)(1)."
Written by Alan D. Leeth
PartnerAlan is a partner and practices in the firm’s Financial Services section. Prior to law school, he was employed at a large financial corporation in its commercial lending division. Directly after law school, Alan spent two years as ...
