Sherman v. Yahoo! Inc.
150 F. Supp. 3d 1213
S.D. Cal.2015Background
- Plaintiff Susan Pathman received an unsolicited "Welcome Message" SMS after a Yahoo Messenger user sent an instant message to her mobile number via Yahoo’s PC2SMS service; she alleges the Welcome Message was an automatically generated, separate text.
- Pathman sues under the TCPA, claiming the Welcome Message was sent using an automatic telephone dialing system (ATDS) and seeks statutory damages for negligent or willful violations.
- Yahoo’s PC2SMS service converts user instant messages to SMS; when a number has not previously received a PC2SMS message within an opt-out period, Yahoo’s system checks an "Optin DB" and automatically sends the Welcome Message and stores the number to prevent immediate repeats.
- Yahoo contends the Welcome Message is triggered by human intervention (the Yahoo user selecting or entering the recipient’s number) and therefore the system is not an ATDS; Pathman contends the Welcome Message is automatically generated and sent by Yahoo without user knowledge or approval.
- The parties dispute whether the Welcome Message is appended to a user message or sent as a separate SMS; Yahoo conceded at hearing it is sent as a separate message, and the court found a jury could so find.
- The court reviewed FCC guidance and recent decisions regarding the ATDS definition and concluded that the "human intervention" inquiry is fact-specific and that genuine factual disputes preclude summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yahoo's PC2SMS Welcome Message was sent using an ATDS under the TCPA | The Welcome Message is automatically generated and sent by Yahoo (without user request or approval) and therefore qualifies as ATDS activity | The Welcome Message is triggered by a Yahoo user selecting/entering the recipient’s number (human intervention), so the system is not an ATDS | Denied summary judgment — genuine factual disputes exist; a jury could find the Welcome Message was produced and sent by an ATDS |
| Whether the Welcome Message is a separate automated text or appended to a user message | The Welcome Message is a separate, additional SMS composed and sent by Yahoo automatically | Yahoo initially argued it was appended to the user’s message (but acknowledged at hearing it is sent separately due to character limits) | Court found a jury could conclude there are two separate texts (user message and automatically sent Welcome message) |
| Proper legal standard for "human intervention" in ATDS analysis | FCC guidance and facts show automatic sending can occur without user intent; focus on how the system functions, not but-for causation | Yahoo argues prior case law treating user-triggering as sufficient human intervention precludes ATDS | Court held but-for causation is inadequate; human-intervention inquiry is equipment-specific and case-by-case per FCC; genuine dispute remains |
| Whether federal precedent and FCC rulings foreclose Plaintiff's claim at summary judgment | FCC rulings classify internet-to-phone texting as covered under TCPA; factual questions as to capacity remain | Yahoo relies on district court decisions finding triggers by users negate ATDS | Court held FCC precedent binds but requires case-by-case analysis; district authority is distinguishable; summary judgment inappropriate |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden and standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine dispute and materiality standard for summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (requiring record that could lead a rational trier of fact to find for nonmoving party)
- Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (text messages can be TCPA "calls")
- ITT World Communications, Inc. v. FCC, 466 U.S. 463 (Hobbs Act review of FCC orders)
- U.S. West Communications v. Jennings, 304 F.3d 950 (district courts lack jurisdiction to invalidate FCC orders)