This article was originally published in Venable's All About Advertising Law Blog.
Last month, we blogged about the U.S. District Court for Northern District of California's recent decision entered in Luna v. Shac, LLC, — F. Supp. 3d –, No. 14-cv-00607 (N.D. Cal. Aug. 19, 2015), which awarded summary judgment to the defendant-gentleman's club in a Telephone Consumer Protection Act ("TCPA") class action. You can read that post here. In short, the court held that the defendant's dialing/texting platform did not constitute a prohibited autodialer under the TCPA in the wake of the FCC's July 2015 omnibus TCPA Order – i.e., (1) adding numbers to a database (either by manually typing the phone numbers, or by uploading or cutting-and-pasting from an existing list of number); (2) drafting the content of the text messages for each campaign; and (3) selecting the numbers to call and clicking "send" (one-click) to transmit the messages–because of the level of human intervention in dialing. Notably, summary judgment briefing in Luna wrapped up before the FCC Order was released, but the plaintiff noticed the Order as supplemental authority in opposition to the defendant's motion for summary judgment. The defendant responded explaining why the FCC Order did not pose an obstacle to summary judgment. The court also cited the Order in its decision.
Shortly after that decision was issued, the plaintiff moved for reconsideration and, at the same time, noticed an appeal of the decision to the U.S. Court of Appeals for the Ninth Circuit. The cornerstone argument of the plaintiff’s motion was that the court’s interpretation of the FCC's Order constituted clear legal error in that the court did not properly evaluate whether the defendant’s dialing platform had the "potential" future capacity to place calls in a purely automated manner. According to the plaintiff, the court erred in basing its decision on a line of pre-FCC Order cases, such as Glauser v. GroupMe and McKenna v. WhisperText, which applied a "present," actual use test to determine whether a dialing platform constitutes a prohibited autodialer. Oral argument on the motion for reconsideration was scheduled for October 20, 2015.
However, the parties have negotiated a settlement while the motion for reconsideration has been pending. One day before oral argument, on October 19, the court issued an order to show cause, directing the parties to file a stipulated dismissal pursuant to Rule 41(a) of the Federal Rules of Civil Procedure. If a dismissal is not filed by that date, the parties must appear before the court and show cause why the case should not be dismissed. Thus, the court’s underlying summary decision remains intact – human intervention and one-click preview dialing removes a dialing platform from the TCPA's definition of prohibited autodialer. The decision remains a "win" for the telemarketing industry.