Tuesday, February 18, 2014

FYI: WD Wash Holds Dialer Must Have Present -- Not Potential -- Capacity to be ATDS Under TCPA

The U.S. District Court for the Western District of Washington recently held that a computer program used by a taxicab company does not qualify as an automatic telephone dialing systems (“ATDS”) under the federal Telephone Consumer Protection Act (“TCPA”), and therefore that the taxicab company was not subject to liability under the TCPA.  A copy of the opinion is attached.


A taxicab company used a computer program (called “TaxiMagic”) to link taxicab drivers with their customers, and provide text message updates to the customers to let them know when the taxicab would arrive and other information. 


Using the program, when a customer called the company dispatch, the dispatcher obtains the customer’s name and telephone number, along with the requested pickup and dropoff locations.  The dispatcher then manually inputs the information into the terminal.  When the dispatcher presses “enter,” the information is sent to TaxiMagic and the driver closest to the requested pickup location.  When the taxicab driver presses “accept” on his or her Mobile Data Terminal, the driver communicates his or her acceptance to TaxiMagic.  The program then composes the notification and transmits the message to the customer via text message.  The system is capable of generating and sending dispatch notifications only after a driver accepts the customer’s request. 


In this case, the plaintiff requested a taxicab and provided his location.  Although the plaintiff did not provide his telephone number, the dispatcher was able to obtain it using Caller ID.  The dispatcher input the number into the system and transmitted the data to the driver and the driver accepted the plaintiff’s request for a taxicab.  Once accepted, the program sent a text message to the plaintiff to notify him the taxi had been dispatched to pick him up. 


The plaintiff filed suit, alleging that the text message violated the TCPA.


As you may recall, the three elements of a TCPA claim are: (1) the defendant called a cellular telephone number (under the TCPA, a text message is deemed a call); (2) using an ATDS; (3) without the recipient’s prior express consent. 


Under the TCPA, equipment is an ATDS if it either has “the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers,” 47 U.S.C. § 227(a)(1), or is a predictive dialer with the capacity to dial telephone numbers from a list without human intervention. In the Matter of Rules & Regulations Implementing the TCPA of 1991, 23 F.C.C.R. 559, 566 ¶14 (Jan. 4, 2008).


The court focused on both definitions of equipment in analyzing the computer program at issue.  First, the court held that the issue of whether a dialing system was an ATDS under the TCPA depends on whether the equipment has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator.  The system need not actually store, produce or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it. 


The plaintiff argued that the modem used to operate TaxiMagic is an ATDS because the modem has the ability to store multiple numbers and transmit a mass text message to those numbers. 


The court rejected the plaintiff’s argument.  According to the court, the plaintiff’s interpretation was too broad because it essentially covered any technology with the potential capacity to store or produce and call telephone numbers using a random number generator. 


The court held that this would produce an “absurd” result because such a broad interpretation would encompass many of contemporary society’s most common technological devices and possibly subject all iPhone owners to the TCPA. 


In rejecting the broad definition, the court mandated that the language of the TCPA requires evaluation of the system’s present, not potential, capacity to store, produce or call randomly or sequentially generated telephone numbers.  The court concluded that the TaxiMagic system operated based on numbers that had been provided by the customer and manually put in the system, and the plaintiff had not introduced sufficient evidence demonstrating that the system or its modem had the capacity to randomly or sequentially generate numbers.


As to the second definition of equipment – a predictive dialer with the capacity to dial numbers without human intervention – the court concluded that there was too much human involvement to constitute a predictive dialer.  The process used to generate the text message to the customer included the dispatcher manually entering the number, hitting “enter” and then the driver “accepting.”  This conduct, according to the court, was sufficient to constitute human intervention. 


Finding that the TaxiMagic system utilized by the taxicab company did not qualify as an ATDS, the court concluded that the plaintiff had not established all of the required elements for a claim under the TCPA and granted the defendant’s motion for partial summary judgment as to that claim. 





Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
(312) 551-9320
(312) 284-4751
(312) 493-0874


Admitted to practice law in Illinois



          McGinnis Wutscher Beiramee LLP





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