Bill Dominguez v. Yahoo Inc

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 17-1243
____________
BILL H. DOMINGUEZ, ON BEHALF OF HIMSELF
AND ALL OTHERS SIMILARLY SITUATED,
Appellant
v.
YAHOO, INC.
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D. C. Civil Action No. 2-13-cv-01887)
District Judge: Honorable Michael M. Baylson
Submitted under Third Circuit LAR 34.1(a)
on October 2, 2017
Before: SHWARTZ and ROTH*, Circuit Judges and
PAPPERT, District Judge
(Opinion filed: June 26, 2018)
*Honorable Gerald J. Pappert, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
Gerald E. Arth, Esq.
Abraham C. Reich, Esq.
Robert S. Tintner, Esq.
Fox Rothschild
2000 Market Street
20th Floor
Philadelphia, PA 19103
James A. Francis, Esq.
David A. Searles, Esq.
John Soumilas, Esq.
Francis & Mailman
100 South Broad Street
Land Title Building, 19th Floor
Philadelphia, PA 19110
Counsel for Appellant
Ian C. Ballon, Esq.
Lori Chang, Esq.
Greenberg Traurig
1840 Century Park East
Suite 1900
Los Angeles, CA 90067
Brian T. Feeney, Esq.
Greenberg Traurig
2001 Market Street
2700 Two Commerce Square
Philadelphia, PA 19103
Counsel for Appellee
2
OPINION
________________
ROTH, Circuit Judge
Appellant Bill Dominguez sued Yahoo!, Inc., alleging
that Yahoo violated the Telephone Consumer Protection Act
(TCPA)1 by sending him thousands of unsolicited text
messages. Dominguez now returns to this Court for the
second time appealing the District Court’s grant of summary
judgment in favor of Yahoo. For the reasons stated below,
we will affirm.
I.
The facts underlying this case are set forth at length in
our prior opinion,2 and we provide only a brief recapitulation
here. Dominguez purchased a cell phone with a reassigned
telephone number. The prior owner of the number had
subscribed to Yahoo’s Email SMS Service, through which a
user would receive a text message each time an email was
sent to the user’s Yahoo email account. Because the prior
owner of the number never canceled the subscription,
Dominguez received a text message from Yahoo every time
the prior owner received an email. In an attempt to turn off
the notifications, Dominguez pursued various courses of
action, all of which proved unsuccessful. Ultimately,
1
47 U.S.C. § 227.
2
See Dominguez v. Yahoo, Inc., 629 F. App’x 369 (3d Cir.
2015).
3
Dominguez received approximately 27,800 text messages
from Yahoo over the course of 17 months.
Dominguez then filed a putative class action alleging
that Yahoo had violated the TCPA. Under the TCPA, it is
unlawful to make or send a non-emergency call or text
message “using any automatic telephone dialing system . . . to
any telephone number assigned to a . . . cellular telephone
service.”3 Thus, Dominguez’s lawsuit has always depended
upon his assertion that Yahoo’s Email SMS Service was an
“automatic telephone dialing system,” i.e., an autodialer. The
TCPA defines an autodialer 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.”4
The District Court first granted summary judgment in
favor of Yahoo in 2014 after concluding that the undisputed
evidence demonstrated that the Email SMS Service did not
have the capacity to store or produce telephone numbers
using a random or sequential number generator.5 In 2015,
while Dominguez’s appeal of that decision was pending, the
FCC issued a declaratory ruling and order (the 2015
Declaratory Ruling), which concluded that “the capacity of an
3
47 U.S.C. § 227(b)(1)(A)(iii). Although the text of the
statute refers only to “calls,” we have held that, under the
TCPA, that term encompasses text messages. See, e.g.,
Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 269 n.2 (3d
Cir. 2013).
4
47 U.S.C. § 227(a)(1).
5
Dominguez v. Yahoo!, Inc., 8 F. Supp. 3d 637, 643-44 (E.D.
Pa. 2014).
4
autodialer is not limited to its current configuration but also
includes its potential functionalities.”6 In other words, a
device could qualify as an autodialer under the TCPA if it had
the latent or potential capacity to store or produce telephone
numbers using a random or sequential number generator, and
to dial those numbers. In light of this intervening ruling from
the FCC, we vacated the District Court’s judgment and
remanded the case for further consideration.7 On remand,
Dominguez amended his complaint to allege that the Email
SMS Service “ha[d] the potential capacity to place autodialed
calls.”8 Yahoo again moved for summary judgment, and both
parties submitted expert reports addressing the Email SMS
Service’s latent or potential capacity.
The District Court granted Yahoo’s motion to exclude
Dominguez’s expert reports and once again granted summary
judgment in favor of Yahoo.9 As relevant to the present
appeal, the court concluded that (1) the 2015 Declaratory
Ruling should not apply in this case under principles of
retroactivity, (2) under the applicable “present capacity”
standard, the Email SMS Service did not qualify as an
autodialer, (3) in the alternative, even if the 2015 Declaratory
Ruling were applicable in this case, Dominguez had not
presented any evidence that the Email SMS Service had the
latent or potential capacity to generate random numbers
6
In re Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991 (2015 Declaratory Ruling),
30 FCC Rcd. 7991, 7974 ¶ 16 (2015).
7
Dominguez, 629 F. App’x at 373.
8
Ohio App. at 116 (Am. Compl.).
9
Dominguez v. Yahoo!, Inc., No. 13-1887, 2017 WL 390267,
at *1 (E.D. Pa. Jan. 27, 2017).
5
because Dominguez’s expert reports did not satisfy the
standard for admissibility under Daubert, and (4) even if
Dominguez’s expert reports were admissible, Dominguez had
failed to provide evidence that the Email SMS Service was
capable of both generating random and sequential numbers
and dialing those numbers. Dominguez appealed.
While this appeal was pending, the United States Court
of Appeals for the District of Columbia Circuit issued its
opinion in ACA International v. FCC,10 a case involving
consolidated challenges to the FCC’s 2015 Declaratory
Ruling. The D.C. Circuit held that the FCC had exceeded its
authority by interpreting the term “capacity” to include any
latent or potential capacity and described the FCC’s approach
as “utterly unreasonable in the breadth of its regulatory
[in]clusion.”11 In particular, the D.C. Circuit took issue with
the fact that “a straightforward reading of the [FCC’s] ruling
invites the conclusion that all smartphones are autodialers.”12
This was so because, as the FCC had conceded, any ordinary
smartphone could achieve autodialer functionality by simply
downloading a random-number-generating app.13 The D.C.
Circuit therefore set aside the FCC’s 2015 Declaratory
Ruling.14
10
885 F.3d 687 (D.C. Cir. 2018).
11
Id. at 699 (internal quotation marks omitted) (alteration in
original).
12
Id.
13
Id. at 696-97.
14
Id. at 692.
6
II.15
The decision in ACA International has narrowed the
scope of this appeal.16 In light of the D.C. Circuit’s holding,
we interpret the statutory definition of an autodialer as we did
prior to the issuance of 2015 Declaratory Ruling. Dominguez
can no longer rely on his argument that the Email SMS
Service had the latent or potential capacity to function as
autodialer. The only remaining question, then, is whether
Dominguez provided evidence to show that the Email SMS
Service had the present capacity to function as autodialer.
Three of Dominguez’s expert reports offer nothing to
help resolve the present capacity question. Both the
Krishnamurthy Report and the Christensen Report focus on
15
The District Court had jurisdiction under 28 U.S.C. § 1331.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
exercise plenary review over a grant of summary judgment,
and make all inferences in favor of the nonmoving party.
Nat’l Amusements Inc. v. Borough of Palmyra, 716 F.3d 57,
62 (3d Cir. 2013). We review a District Court’s decision to
exclude expert testimony for an abuse of discretion. Pineda
v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008). This
means that “[w]e will not interfere with the district court’s
decision ‘unless there is a definite and firm conviction that
the court below committed a clear error of judgment in the
conclusion it reached upon a weighing of the relevant
factors.’” Id. (quoting In re TMI Litig., 193 F.3d 613, 666 (3d
Cir. 1999)).
16
Dominguez and Yahoo have both submitted letters under
Rule 28(j) explaining their understanding of the impact of
ACA International on this appeal.
7
latent or potential capacity. The Krishnamurthy Report
proposes five possible ways in which the Email SMS Service
could be modified to generate random or sequential
numbers.17 All of these proposed modifications would
require several months of work to implement.18 The
Christensen Report is similarly speculative. Christensen
opines that “[i]t would have been quite easy for one of normal
skill in software programming to configure an application to
cause mobile messages to be sent based on integration of off-
the-shelf, commonly available random number generator
programs,” and concludes that “the equipment and systems
that Yahoo relied upon . . . had the latent capacity to generate
random and/or sequential ten digit numbers.”19 A third
report, by Jeffrey Hansen, does not use the term “latent
capacity” but presents similar analysis. The Hansen Report
begins with the generalized assertion that “all computers can
generate random or sequential numbers.”20 The report then
proposes six computer code commands, which, Hansen
asserts, could be written into Yahoo’s operating system in
order to generate wireless numbers randomly or
sequentially.21
In his supplemental filings, Dominguez argues that,
under ACA International, certain limited modifications may
nevertheless fall within the scope of present capacity. He
emphasizes the D.C. Circuit’s comment that “[v]irtually any
understanding of ‘capacity’ thus contemplates some future
17
See App. at 306 (Krishnamurthy Report).
18
See App. at 304, 321 (Krishnamurthy Report).
19
Ohio App. at 1163, 1165 (Christensen Report) (emphasis added).
20
Ohio App. at 372 (Hansen Report).
21
Ohio App. at 373 (Hansen Report).
8
functioning state, along with some modifying act to bring that
state about.”22 Though that may be true, it does not follow
that the Krishnamurthy, Christensen, or Hansen Reports
create a triable factual issue regarding the present capacity of
the Email SMS Service. The reports are founded upon the
exact type of hypothesizing that is foreclosed by ACA
International. 23 The District Court was therefore correct to
exclude the Krishnamurthy, Christensen, and Hansen Reports,
as they are irrelevant to the present capacity inquiry.24
22
Rule 28(j) Letter from James A. Francis, Appellant’s
Counsel, to Patricia Dodszuweit, Clerk of Court, 3d Cir.
(Mar. 28, 2018) (quoting ACA Int’l, 885 F.3d at 696).
23
ACA Int’l, 885 F.3d at 696. The D.C. Circuit noted that a
correct understanding of “capacity” focuses “on
considerations such as how much is required to enable the
device to function as an autodialer: does it require the simple
flipping of a switch, or does it require essentially a top-to-
bottom reconstruction of the equipment?” Id. The types of
modifications discussed by the Krishnamurthy and
Christensen Reports—involving several months of work and
the integration of unnamed external programs or
applications—can hardly be characterized as the “simple
flipping of a switch” and are far closer to a full reconstruction
of the Email SMS System. Although the modification
proposed in the Hansen Report appears simpler in
comparison, the addition of a short sequence of code to any
computer operating system bears a striking similarity to the
downloading of an app onto any smartphone—the
modification that was at issue in
ACA International. See id. at 696-98.
24
Cf., e.g., Daubert v. Merrell Dow Pharm., Inc., 509 U.S.
579, 591 (1993) (“Rule 702 further requires that the evidence
9
Dominguez’s final expert report, the supplemental
declaration of Randall Snyder, also falls short of the
admissibility standard. Snyder purports to address present,
not just latent, capacity, repeatedly opining that “Yahoo’s
Email SMS Service system had the ability to generate random
numbers and, in fact, did generate random numbers.”25 This
opinion, however, is supported by little more than the same
type of overbroad, generalized assertions found in the Hansen
Report. Specifically, Snyder opines that “[t]he ability to
generate random numbers is a fundamental function inherent
in information technology computer systems employing the
most common operating systems, security protocols and
encryption.”26 Snyder goes on to explain the role that random
number generators play in various commonly available
computer operating systems, such as Microsoft Windows,
Apple Mac OS, and UNIX, and posits that “it is a
straightforward and very basic algorithm to use the available
random number generation functions to generate ten-digit
telephone numbers.”27 Notably absent, however, is any
explanation of how the Email SMS System actually did or
could generate random telephone numbers to dial. In that
or testimony assist the trier of fact to understand the evidence
or to determine a fact in issue. . . . Expert testimony which
does not relate to any issue in the case is not relevant and,
ergo, non-helpful.”). Although the District Court, not having
the guidance of ACA International, focused its analysis
primarily on reliability, we may affirm on any basis supported
in the record. See, e.g., Fairview Twp. v. EPA, 773 F.2d 517,
525 n.15 (3d Cir. 1985).
25
Ohio App. at 977 (Snyder Supp. Decl.); see also id. at 978.
26
App. at 974 (Snyder Supp. Decl.).
27
Ohio App. at 976 (Snyder Supp. Decl.).
10
regard, the Snyder Supplemental Declaration is hardly less
speculative than the expert reports of Krishnamurthy,
Christensen, or Hansen—and raises the same concerns about
the TCPA’s breadth that the D.C. Circuit addressed in ACA
International. Because it does not shed light on the key
factual question actually at issue in this case—whether the
Email SMS System functioned as an autodialer by randomly
or sequentially generating telephone numbers, and dialing
those numbers—the Snyder Supplemental Declaration, like
the other expert reports, lacks fit or relevance and was
therefore properly excluded.28
Ultimately, Dominguez cannot point to any evidence
that creates a genuine dispute of fact as to whether the Email
SMS Service had the present capacity to function as an
autodialer by generating random or sequential telephone
numbers and dialing those numbers. On the contrary, the
record indicates that the Email SMS Service sent messages
only to numbers that had been individually and manually
inputted into its system by a user.29 There can be little doubt
that Dominguez suffered great annoyance as a result of the
unwanted text messages. But those messages were sent
precisely because the prior owner of Dominguez’s telephone
number had affirmatively opted to receive them, not because
of random number generation. The TCPA’s prohibition on
28
See, e.g., In re Paoli R.R. Yard PCB Litig., 35 F.3d 717,
743 (3d Cir. 1994) (“[A]dmissibility depends in part on the
proffered connection between the scientific research or test
result to be presented and particular disputed factual issues in
the case.” (internal quotation marks omitted)); see also supra
note 24.
29
See App. at 248-49 (Decl. of Gareth Shue).
11
autodialers is therefore not the proper means of redress.
III.
For the above reasons, we will affirm the District
Court’s orders excluding Dominguez’s expert reports and
granting summary judgment in favor of Yahoo.
12