June 22, 2012
By Marc Roth
A federal court in Oakland, CA, denied Googles motion to stay a class-action lawsuit filed against it by named plaintiffs Nicole Pimental and Jessica Franklin.
The plaintiffs allege that Googles social applications company, Slide Inc., violated the Telephone Consumer Protection Act (TCPA) by using automated dialing devices to send text messages to consumers without their consent.
Google acquired Slide, the creator of the Disco app that allows people to send text messages to as many as 99 people at one time.
Specifically, the plaintiffs allege that Google and Slide made unsolicited text message calls . . . using equipment that . . . had the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, i.e., an automatic telephone dialing system (ATDS) under federal law.
An ATDS is defined as equipment which has the capacity . . . to store or produce telephone numbers to be called, using a random or sequential number generator [and] to dial such numbers.
Furthermore, Google and Slide contend that their technology does not have the capacity to store or produce telephone numbers that could be dialed using a random or sequential number generator.
The TCPA regulates telemarketers selling goods and services to prevent any telephone-based abusive or deceptive activity.
Under the TCPA, a consumers prior express consent is required before anyone may send the consumer an advertisement via text message to the consumers telephone.
In March, a separate entity, GroupMe, petitioned the FCC for clarification regarding its duty to obtain prior express consent from consumers and to determine whether its equipment falls under the statutory definition of an ATDS.
Specifically, GroupMe sought clarification of the meaning of prior express consent, which is not defined by the TCPA.
In addition, GroupMe inquired as to whether the term capacity as used in the definition of an ATDS meant a theoretical, potential capacity to auto-dial, albeit only after a significant re-design of the software, or rather the actual, existing capacity of the equipment at the time of use, could, in fact, have employed the functionalities described in the TCPA.
Move to stay
Based on the pending petition, Google moved to stay the suit stating that the FCC had primary jurisdiction over the matters and that its ruling, if any, could shed light on the courts ultimate analysis with respect to plaintiffs claims.
Under the doctrine, primary jurisdiction applies only if a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency, and if protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme.
The court found that the doctrine did not apply because the lawsuit did not raise technical or policy considerations solely within the FCCs expertise and the issues were not particularly within the FCCs discretion since Congress did not explicitly delegate those issues solely for FCC consideration.
The court found that a delay was not appropriate: The court is not convinced that the FCC has agreed to issue a ruling, let alone issue a ruling on an expedited basis.
Moreover, even if the FCC were poised to issue a ruling immediately, inconsistent rulings by the FCC and the court are not likely since the parties deadline for hearing motions for summary judgment is Oct. 30, 2012, and trial is set for Feb. 19, 2013.
As the court noted, the parties need to conduct discovery to obtain the facts and expert opinions necessary, so that once these issues are decided by the FCC or the Court, the Court can apply the undisputed facts to the law on motion for summary judgment, or a jury can find those facts at a trial on the merits. A stay will not permit the parties to obtain the discovery necessary to resolve the factual disputes Defendants raise in their Answer and Affirmative Defenses.
Why it matters
Businesses cannot rely on the doctrine of primary jurisdiction to shield potential class-action litigation solely because an inquiry pending before a federal agency touches upon the issues raised in the litigation.
The courts decision also makes clear that defenses to fend off class claims should be prepared in the event refuge under the primary jurisdiction doctrine proves fruitless.
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