TCPA's statutory damages put Yahoo at risk for $41 million in one man's case

By Hanna Nakano | Nov 17, 2015

PHILADELPHIA - Yahoo could be exposed to more than $41 million in damages in a recently revived lawsuit over nearly 28,000 text messages it sent to one man, and a Philadelphia attorney says the trial court has been left to consider an incredibly important issue to companies.

The U.S. Court of Appeals for the Third Circuit recently overturned the dismissal of Bill Dominguez's case. Now, Dominguez will attempt to prove he received nearly 28,000 text messages through Yahoo's use of an autodialer, which would be in violation of the Telephone Consumer Protection Act.

Michael Daly, a partner at Drinker Biddle in Philadelphia, studied Dominguez v. Yahoo, Inc. and told the Pennsylvania Record the way the court interprets the definition of an autodialer could impact the way companies are able to communicate with patrons.

“That issue is incredibly important to businesses that communicate with customers by phone or text because if they use an ATDS they may be required to get the prior consent of the called party, and may be exposed to as much as $1,500 in statutory damages per call or text if they don’t,” Daly told the Record.

“Unfortunately, the FCC has interpreted that term in a way that extends to conduct and equipment that Congress never meant to regulate. Indeed, the FCC’s interpretation is so broad that it arguably applies to smartphones and any other technology—except, perhaps, a rotary telephone.”

If Yahoo is ordered to pay the $1,500 statutory damage for each of its texts to Dominguez, that would total more than $41 million.

The TCPA says equipment meets the autodialer meaning if it is part of a system that has the capacity to place automated calls.

Daly said this case is important because it’s a clear example of a court considering the TCPA’s language and the FCC’s interpretation of that language, and deciding how the FCC interpreted it’s own language is not how the court is obligated to interpret it.

Also notable, Daly said, is the fact that the appeals court did not challenge the trial court’s decision that the definition of an autodialer hinges on whether the equipment can produce numbers randomly or sequentially, not just dial numbers randomly or sequentially.

“That is significant because most modern telemarketers do not dial numbers from lists that are produced randomly or sequentially,” Daly said.

“Rather, they dial numbers from lists that are produced from their own business records - for example lists of numbers that were voluntarily provided by customers.”

Daly said that decision would have to include whether what the word "capacity" means in terms of an autodialer. It could refer to present or potential capacity – what the equipment can do right now as opposed to what it may be able to do tomorrow.

The phone’s previous owner had signed up to receive a text alert every time an email was received.

Before filing suit, Dominguez said he contacted Yahoo to be taken off the text message alert, but was told because he was not the account holder of the email address registered to the phone, he couldn’t authorize a removal.

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