Eighth Circuit Rules Marketing Software Txt Live Not an Autodialer

TCPA Connect

In an appeal consolidating two Telephone Consumer Protection Act (TCPA) cases against owners of two bar establishments, Outfield Brew House, LLC, and Truman Road Developments, LLC, the Eighth Circuit ruled that the marketing software Txt Live did not meet the statutory definition of an autodialer.

In an earlier ruling, the district court had granted summary judgment for each of the establishments. On appeal, the Eighth Circuit focused solely on the nature of the system, stating that “this appeal comes down to whether Txt Live falls within the definition of an Autodialer.” Agreeing that Txt Live is not an autodialer, the Eighth Circuit affirmed the district court’s ruling.

Both establishments use Txt Live to store phone numbers from former and potential customers who have provided their phone numbers, and then to send out promotional text messages. The record established that users manually input customer information into Txt Live and then can use the software to draft text messages and to filter the list of recipients based on a variety of demographic features. After the user hits “send,” Txt Live shuffles the recipient list using a “numerically-based randomizer” and sends the message to the recipient list using that randomized order. The process is compared to “shuffling a deck of cards and then taking cards from the top of the shuffled deck.” Recipients of promotional texts sent by the establishments sued under the TCPA, claiming that the system qualified as an autodialer, which is defined in the statute as “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.” 47 U.S.C. § 227(a)(1).

In its analysis, the Eighth Circuit focused on the meaning of the word “produce” within the statute. The court stated that to accurately determine the meaning of the word, the court “must consider its context, especially its subject—that is, the thing doing the producing.” The Eighth Circuit found that, according to the statute, the random or sequential number generator does the producing; in other words, “a random number generator produces by generating a random number.” Because Txt Live does not generate the actual phone number, the court reasoned, Txt Live does not “produce telephone numbers to be called” within the meaning of the TCPA. The Eighth Circuit pointed to the Supreme Court’s decision in Facebook v. Duguid to support its analysis, stating, “Txt Live is exactly the kind of equipment Facebook excluded” from its definition of an autodialer. “Facebook was not concerned with how an automatic texting system may organize and select phone numbers,” the opinion concluded.

The Eighth Circuit also rejected the text recipients’ arguments based on Footnote 7 of the Facebook opinion. Such arguments are often cited by the plaintiff’s bar, as in this case, to justify treatment of systems that utilize a customer database or other stored list of phone numbers as an automatic telephone dialing system (ATDS) because of the system’s ability to “store” or to “produce” (i.e., select) such phone numbers either randomly or sequentially. The Eighth Circuit quickly dispensed with this argument, stating its position on Footnote 7 strongly: “Like other courts, we do not believe the Court’s footnote indicates it believed systems that randomly select from non-random phone numbers are Autodialers.”

To read the decision in Beal v. Outfield Brew House, LLC, click here.

Why it matters: This is the first published circuit court opinion on an ATDS since the Supreme Court’s ruling in Facebook v. Duguid. The Eighth Circuit found that “equipment that merely stores and dials phone numbers” does not meet the statutory requirement for an ATDS, and that the phone numbers themselves must be randomly or sequentially generated. Defendants can use this opinion to argue that other similar list- and CRM-based systems, not just Txt Live, are not autodialers within the meaning of the TCPA, so long as they do not actually randomly or sequentially generate the phone numbers to be called.



pursuant to New York DR 2-101(f)

© 2024 Manatt, Phelps & Phillips, LLP.

All rights reserved