Eric Washington v. Intercontinental Hotels Group Resources, Inc

REPLY in Support of NOTICE OF MOTION AND MOTION to Dismiss Case [Second Amended Complaint] 29

C.D. Cal.June 29, 2018

DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT EDWARD D. TOTINO (SBN 169237) edward.totino@dlapiper.com BENJAMIN W. TURNER (SBN 256092) benjamin.turner@dlapiper.com DLA PIPER LLP (US) 2000 Avenue of the Stars, Suite 400 North Tower Los Angeles, California 90067-4704 Tel: (310) 595-3000 Fax: (310) 595-3300 Attorneys for Defendant SIX CONTINENTS HOTELS, INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ERIC WASHINGTON, Plaintiff, v. SIX CONTINENTS HOTELS, INC., Defendant. CASE NO. 2:16-CV-03719-ODW-JEM REPLY IN SUPPORT OF DEFENDANT SIX CONTINENTS HOTEL INC.’S MOTION TO DISMISS SECOND AMENDED COMPLAINT Hearing: Date: July 16, 2018 Time: 1:30 p.m. Place: Courtroom 5D Complaint Filed: 5/27/16 FAC Filed: 6/27/16 Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 1 of 17 Page ID #:287 DLA P IPER LLP (US) AUSTI N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page -i- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAINT I. INTRODUCTION .................................................................................. 1 II. PLAINTIFF’S RELIANCE ON PREDICTIVE DIALERS IS INAPPOSITE ...................................................................................... 3 A. ACA Int’l Reached The FCC’s Prior Orders .................................. 3 B. Predictive Dialers Involve Live Phone Calls, Not Text Messages ....... 4 C. Nothing In The Prior FCC Orders Jettisons The Requir ment Of Random Or Sequential Number Generation ............ .................... 5 III. PLAINTIFF FAILS TO ALLEGE THAT SIX CONTINENTS’ SYSTEM HAS THE CAPACITY TO GENERATE SEQUENTIAL OR RANDOM NUMBERS .......................................................................... 7 A. Under ACA Int’l, It Is Insufficient To Allege The Mere Potential To Generate Random Or Sequential Numbers ...................... 7 B. Following ACA Int’l, The Third Circuit Has Confirmed That A Plaintiff Must Establish Present, Not Theoretical Cpacity ................. 8 IV. PLAINTIFF FAILS TO PLAUSIBLY ALLEGE THAT SIX CONTINTENTS’ SYSTEM IS CAPABLE OF DIALING NUMBERS WITHOUT HUMAN INTERVENTION ...................................................... 9 V. PLAINTIFF’S SUPPLEMENTAL AUTHORITY IS INAPPOSITE .......... 11 VI. CONCLUSION ................................................................................... 12 Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 2 of 17 Page ID #:288 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page WEST\282277376.2 -i- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT Federal Cases ACA Int’l v. Fed. Commc’ns Comm’n., 885 F.3d 687 (D.C. Cir. 2018) ..................... ........................................ passim Ammons v. Ally Fin., Inc., Case No. 3:17-cv-00505 (M.D. Tenn. Jun. 27, 2018) ....... .................................. 6 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................. 9 Brown v. NRA Grp., LLC, No. 6:14-CV-610-ORL-31, 2015 WL 3562740 (M.D. Fla. June 5, 2015)......................................................................................... 10 Daniels v. Cmty. Lending, Inc., No. 13-cv-488-WQH-JMA, 2014 WL 51275 (S.D. Cal. Jan. 6, 2014) ............................................................................................ 5 Dominguez v. Yahoo, Inc., No. 17-1243, 2018 WL 3118056 (3d Cir. June 26, 2018)...................... 2, 7, 8, 12 Duguid v. Facebook, Inc., No. 15-CV-00985-JST, 2016 WL 1169365 (N.D. Cal. Mar. 24, 2016) ................................................................................................ 4, 5, 9 Glauser v. GroupMe, Inc., No. C 11-2584 PJH, 2015 WL 475111 (N.D. Cal. Feb. 4, 2015) ....................... 11 Gragg v. Orange Cab Co., 995 F. Supp. 2d 1189 (W.D. Wash. 2014).................................................. 10 Herrick v. GoDaddy.com LLC, 2018 WL 2229131 (D. Az. May 14, 2018) .................................................. 4, 6, 9 Johnson v. Yahoo!, Inc., No. 14 CV 2028, 2014 WL 7005102 (N.D. Ill. Dec. 11, 2014) ......................... 10 Luna v. Shac, LLC, 122 F. Supp. 3d 936 (N.D. Cal. 2015) ................................................................. 9 Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 3 of 17 Page ID #:289 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page WEST\282277376.2 -ii - REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT Marks v. Crunch San Diego, LLC, 55 F. Supp. 3d 1288 (S.D. Cal. 2014) ........................................................ 10 Marshall v. CBE Grp., Inc., No. 216CV02406GMNNJK, 2018 WL 1567852 (D. Nev. Mar. 30, 2018) ........................................................................................................ 6 McKenna v. WhisperText, No. 5:14-CV-00424-PSG, 2015 WL 428728 (N.D. Cal. Jan. 30, 2015) ...................................................................................................... 10 McMillion v. Rash Curtis & Assocs., No. 16-CV-03396-YGR, 2018 WL 3023449 (N.D. Cal. June 18, 2018) ...................................................................................................... 11 Meyer v. Portfolio Recovery Assocs., 707 F.3d 1036 (9th Cir. 2012) ............................................................... 11, 12 Morse v. Allied Interstate, LLC, 65 F. Supp. 3d 407 (M.D. Pa. 2014) ................ ........................................... 10 Reyes v. BCA Fin. Servs., Inc., No. 16-24077-CIV, 2018 WL 2220417 (S.D. Fla. May 14, 2018)................... 5, 6 Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729 (9th Cir. 1987) .................................................................... 9 Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) ......................................................... 6, 7, 11, 2 Sterk v. Path, Inc., 46 F. Supp. 3d 813 (N.D. Ill. 2014) .................................................................. 10 Weisberg v. Stripe, Inc., No. 16-cv-00584-JST, 2016 WL 3971296 (N.D. Cal. July 25, 2016) .............. 4, 5 Federal Statutes 47 U.S.C. § 227(a)(1) ................................................................................ 1, 5 Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. ......................... passim Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 4 of 17 Page ID #:290 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page WEST\282277376.2 -iii - REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT Regulations In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd. 559 (2008) .......................................................................... 3 In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd. 14014 (2003) ......................................................................... 2, 3, 4 In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 FCC Rcd. 7961 (2015) ........................................................................ 3, 7 Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 5 of 17 Page ID #:291 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -1- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT Defendant SIX CONTINENTS HOTELS, INC. (“Six Continets” or “Defendant”) submits this Reply Brief in Support of its Motion to Dismiss Plaintiff ERIC WASHINGTON’s (“Plaintiff”) Second Amended Complaint (“SAC”). I. INTRODUCTION The Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., is aimed at combating automated telemarketing calls and text messages sent en masse to tens of thousands of recipients using random and sequential dialers. To that end, the TCPA targets “automated telephone dialing system[s]” or “ATDS” as defined in 47 U.S.C. § 227(a)(1). ATDS “means equipment which has the capacity – (A) to store or produce numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. As Plaintiff’s Opposition itself confirms, this case bears none of the above hallmarks. The messages were not sent en masse, did not consist of impersonal telemarketing or other advertising, and were not transmitted via a random or sequential dialing system. Plaintiff received unique hotel reservation confirmation messages, specific to reservations placed by an individual for particular hotels, for stays on dates selected by that individual. Each text message had its own distinct reservation confirmation number, hotel address, dates of stay, and hotel phone number. Those confirmations were sent only to Plaintiff’s telephone number of course, because sending reservation confirmations en masse to telephone numbers generated randomly would serve no purpose, and Plaintiff does not allege otherwise. And the reservation confirmations were sent only after a rese vation was made with each hotel and associated with Plaintiff’s telephone number, thus necessitating human interaction before any confirmation was ever sent. Because the facts alleged in this case do not implicate the TCPA, Plaintiff does not and cannot allege one of the essential elements of a TCPA claim – that the reservation text messages were sent to him via ATDS. To do so, Plaintiff had to allege facts raising a plausible inference that the system used to send the text Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 6 of 17 Page ID #:292 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -2- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT messages can store or produce numbers using a random or sequential number generator, or has the present capacity to do so merely upon the press of a button. Plaintiff also had to plausibly allege that the system can dial such numbers without human intervention. Plaintiff has done neither. Instead, the allegations of Plaintiff’s Second Amend d Complaint (“SAC”) are predicated on the now-defunct, overly-expansive int rpretation of the TCPA issued by the Federal Communications Commission (“FCC”) in 2015. As this Court is aware, the United States Court of Appeals for the District of Columbia Circuit in ACA Int’l v. Fed. Commc’ns Comm’n., 885 F.3d 687 (D.C. Cir. 2018) struck down the FCC’s “unreasonably expansive interpretation of the statute.” Id. at 692. Faced with this intervening authority, Plaintiff now attempts to retreat to the FCC’s 2003 Order, and asserts that Six Continents’ system constitutes a “predictive dialer.” Opp. at 10. Plaintiff’s newly-minted, unpled predictive dialer argument makes no sense because a predictive dialer is designed for voice communications, and assists telemarketers in predicting when a sales agent will be available to take calls. A predictive dialer does not send text messages and would serve no function in text messaging because no sales ag nt will be speaking with the person being texted. Moreover, customized reservation confirmation text messages do not involve sales or sales agents. Plaintiff’s argument makes absolutely no sense. Plaintiff also attempts to ignore the holding and import of ACA Int’l. Plaintiff insists it is enough that he allege the system has the theoretical capacity to produce numbers using a random or sequential number generator with computer programming. Courts in the Ninth Circuit have alredy correctly concluded that ACA Int’l is binding authority in this area and forecloses that precise argument. Just this month, the Third Circuit in Dominguez v. Yahoo, Inc., No. 17-1243, 2018 WL 3118056 (3d Cir. June 26, 2018), confirmed that conclusion. Plaintiff alleges no facts plausibly demonstrating that an ATDS was used to send the text messages Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 7 of 17 Page ID #:293 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -3- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT to him, and the SAC should be dismissed with prejudice for failure to state a claim under the TCPA. II. PLAINTIFF’S RELIANCE ON PREDICTIVE DIALERS IS INAPPOSITE Plaintiff recognizes that ACA Int’l forecloses reliance on the FCC’s overly- expansive 2015 interpretation of the TCPA in I re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 FCC Rcd. 7961, ¶ 16 (2015) (2015 Order). Accordingly, Plaintiff now pivots, arguing that the SAC survives under the FCC’s prior 2003 and 2008 rulings in In re Rules and Regulations Implementing the Telephone Consumer Protecti n Act of 1991, 18 FCC Rcd. 14014, ¶ 132 (2003) (“2003 Order”) and I re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd. 559, 566 (2008) (“2008 Order”). Under Plaintiff’s logic, because the 2003 and 2008 Orders hold that predictive dialers qualify as ATDS’s, the SAC has adequately alleged an ATDS was used to send the text messages to him. See Opp. at 2, 7-10, 21-22. This is illogic, not logic, and Plaintiff’s argument is wrong on several counts. A. ACA Int’l Reached The FCC’s Prior Orders First, Plaintiff’s argument presupposes that ACA Int’l did not reach the 2003 and 2008 Orders. Plaintiff is wrong. Given the FCC’s lack of clarity regarding the language “using a random or sequential number generator,” the D.C. Circuit specifically “set aside” the FCC’s interpretations regarding that language. 885 F.3d at 701. Indeed, the D.C. Circuit explicitly rejectd the FCC’s objection that the Court lacked jurisdiction to hear a challenge concer ing the functions an ATDS must be able to perform because “the issue was resolved in prior agency orders – specifically, declaratory rulings in 2003 and 2008.” Id. at 701. The D.C. Circuit emphasized that “[w]hile the Commission’s latest ruling purports to reaffirm the prior orders, that does not shield the agency’s pertinent pronouncements from review.” Id. (emphasis added). As such, the D.C. Circuit “set aside the Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 8 of 17 Page ID #:294 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -4- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT Commission’s treatment of those matters.” Id. at 703. Accordingly, even if the 2003 and 2008 Orders somehow aided Plaintiff – and they do not – ACA Int’l forecloses any reliance on those now defunct declaratory rulings. B. Predictive Dialers Involve Live Phone Calls, Not Text Messages Second, Plaintiff’s assertion that he has somehow plausibly alleged a “predictive dialer” neither makes legal nor logical sense. Under the 2003 Order, “a predictive dialer is equipment that dials numbers and, when certain computer software is attached, also assists telemarketers in predicting when a sales agent will be available to take calls.” 2003 Order at 14091. That is, predictive dialers are specialized telemarketing equipment involving live phone calls, not text messages. See Herrick v. GoDaddy.com LLC, 2018 WL 2229131, at *6 n.6 (D. Az. May 14, 2018). Thus, even if ACA Int’l did not invalidate the FCC’s prior interpretations from 2003 and 2008 – and ACA Int’l expressly did so – the FCC’s predictive dialer rulings are not relevant to systems sending confirmatory text messages. Plaintiff does not and cannot allege that Six Continents’ system uses a predictive dialer. Instead, Plaintiff alleges the legal conclusion that Defendant sent text messages, confirming an individual’s hotel rese vations, using an “ATDS” that “has the capacity to generate random numbers.” SAC¶¶ 18, 26, 31. Accordingly, regardless of whether the 2003 and 2008 Orders remain valid, Plaintiff’s reliance on predictive dialers is misplaced because he does not a d cannot allege that Six Continents’ system functions as one. See Duguid v. Facebook, Inc., No. 15-CV- 00985-JST, 2016 WL 1169365, at *6 (N.D. Cal. Mar. 24, 016) (“Duguid has not alleged that Facebook uses a predictive dialer, or equipment that functions like a predictive dialer. The Complaint plainly alleges that the text messages were sent using an ATDS that ‘has the capacity to store or prduce telephone numbers to be called, using a random or sequential number generator.’”); Weisberg v. Stripe, Inc., No. 16-cv-00584-JST, 2016 WL 3971296, at *4 (N.D. Cal. July 25, 2016) (rejecting plaintiff’s predictive dialer argument, because the plaintiff’s allegations Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 9 of 17 Page ID #:295 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -5- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT showed defendant sent messages targeted to a specific hone number, and therefore the plaintiff had “not plausibly alleged that the text messages were sent randomly to him by an ATDS”). Of course, Plaintiff has alleged no facts plausibly demonstrating that an ATDS was in fact used. C. Nothing In The Prior FCC Orders Jettisons The Requirement Of Random Or Sequential Number Generation Third, nothing in any of the FCC’s prior orders – even assuming they are still valid – reads out the phrase “random and sequential umber generator” from the statutory definition of an ATDS. As in Duguid, 2016 WL 1169365, at *5 “Plaintiff’s own allegations suggest direct targeting that is inconsistent with the sort of random or sequential number generation required for an ATDS.” The content of the text messages is specific to unique hotel reservations, evidencing direct targeting rather than the use of random or sequential numbers. Weisberg, 2016 WL 3971296, *4 (ATDS allegation implausible where plaintiff alleged that defendant was “capable of dialing a list of numbers contained in a database” “automatically” and “without human intervention,” because plaintiff did not plausibly allege text messages were sent randomly); Daniels v. Cmty. Lending, Inc., No. 13-cv-488- WQH-JMA, 2014 WL 51275, at *5 (S.D. Cal. Jan. 6, 2014) (plaintiffs did not adequately allege the use of an ATDS where the “allged calls to Plaintiffs do not appear to have been ‘random,’ 47 U.S.C. § 227(a)(1); instead the calls are alleged to be directed specifically toward Plaintiffs”). Plaintiff’s allegations confirm that the text messages were sent directly and specifically to Plaintiff. Not only was the number not randomly or sequentially generated; it also was not randomly or sequentially dialed. Accordingly, Plaintiff’s reliance on predictive dialers and the FCC’s prior orders is unavailing. Relying on an order from a Florida district court, Reyes v. BCA Fin. Servs., Inc., No. 16-24077-CIV, 2018 WL 2220417, (S.D. Fla. May 14, 2018), Plaintiff contends that ACA Int’l does not hold that a predictive dialer must be able to Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 10 of 17 Page ID #:296 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -6- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT generate and dial random or sequential numbers to constitute an ATDS. Opp. at 10. Reyes, however, erroneously concluded that ACA Int’l left open the possibility that a device could qualify as an ATDS even it lacked the capacity to generate random or sequential numbers. Id. at *9. ACA Int’l observed that the FCC’s 2015 Order gave no clear answer to the question of whether “a device qualif[ies] as an ATDS only if it can generate random or sequential numbers to be dialed, or can it so qualify even if it lacks that capacity?” Rather than allow for the latter possibility, the D.C. Circuit held that the FCC “fail[ed] to sati fy the requirement of reasoned decisionmaking interpretation.” 885 F.3d at 701-02. And for that reason, far from permitting the interpretation suggested by the FCC, Reyes and Plaintiff, the D.C. Circuit “set aside” the FCC’s interpretation. Id. The 2003 and 2008 Orders are no longer valid.1 Indeed, a contrary interpretation that jettisoned the language “random and sequential number generator” out of the statutory definition would directly conflict with basic canons of statutory construction against rendering statutory language superfluous, and the Ninth Circuit’s clear instruction that “[w]hen evaluating the issue of whether equipment is an ATDS, the statute’s clear language mandates that the focus must be on whether the equipment has the capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator.’” Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir. 2009). Consistent with Satterfield, courts in the Ninth Circuit have already rejected the argument made by Plaintiff here. See Herrick, 2018 WL 2229131, at *8 (declining to expand definition of ATDS to include “any equipment that merely stores or produces telephone numbers in a database” because doing so would “improperly render the limiting phrase ‘using a random or sequential number generator’ superfluous.”); Marshall v. CBE Grp., Inc., No. 216CV02406GMNNJK, 1 For the same reasons, Ammons v. Ally Fin., Inc., Case No. 3:17-cv-00505 (M.D. Tenn. Jun. 27, 2018), another out-of-circuit order, misinterprets ACA Int’l and is inapposite here. Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 11 of 17 Page ID #:297 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -7- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT 2018 WL 1567852, at *5 (D. Nev. Mar. 30, 2018) (relying on Satterfield in refusing to “stray from the statute’s language which mandates that the focus be on whether the equipment has the capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator’”). III. PLAINTIFF FAILS TO ALLEGE THAT SIX CONTINENTS’ SYSTEM HAS THE CAPACITY TO GENERATE SEQUENTIAL OR RANDOM NUMBERS Plaintiff does not dispute that the text messages at issue were directly targeted to Plaintiff. He nonetheless contends that he has adequately alleged an ATDS because the system need not send text messages randomly to qualify as an ATDS, but rather have the theoretical “capacity” to d so. Opp. at 20. But the SAC’s barebones allegations on “capacity” do not suffice. The SAC offers no facts but only conclusory allegations that Six Continents’ system has the “capacity to store and dial . . . random or sequential numbers” o , alternatively, if it “does not already have the capacity to generate random or sequential numbers, that capacity can be trivially added.” SAC ¶¶ 32, 34-35. But more fundamentally, Plaintiff’s argument is foreclosed by both ACA Int’l as explained in the Third Circuit’s recent decision in Dominguez v. Yahoo, Inc., No. 17-1243, 2018 WL 3118056 (3d Cir. June 26, 2018). A. Under ACA Int’l , It Is Insufficient To Allege The Mere Potential To Generate Random Or Sequential Numbers The 2015 Order – which Plaintiff expressly concedes is now invalid under ACA Int’l – concluded that “the capacity of an autodialer is not limited to its current configuration but also includes its potential functionalities.” 2015 Order at 7974. “In other words, a device could qualify as an autodialer under the TCPA [according to the FCC] if it had the latent or potential capacity to store or produce telephone numbers using a random or sequential number generator, nd to dial those numbers.” Dominguez, 2018 WL 3118056. ACA Int’l held, among other things, that the FCC’s interpretation was “utterly unreasonable in the breadth of its Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 12 of 17 Page ID #:298 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -8- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT regulatory [in]clusion.” 885 F.3d at 699. Under the FCC’s logic, “essentially any smartphone, with the addition of software, can gain the statutorily enumerated features of an autodialer and thus function as an ATDS.” Id. at 696. Because that conclusion would have been untenable, the D.C. Circuit held that “capacity” turns on questions “such as how much is required to enabl 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. Plaintiff’s arguments regarding latent or potential capacity are fo eclosed under ACA Int’l. B. Following ACA Int’l , The Third Circuit Has Confirmed That A Plaintiff Must Establish Present, Not Theoretical Capacity Building on ACA Int’l, the Third Circuit in Dominguez addressed a TCPA claim in which a confirmatory text message was sent to the recipient each time an email was received on the defendant’s service. Dominguez held that any argument that the system in question had the “latent or potential capacity to function as an autodialer” was foreclosed by ACA Int’l, and the plaintiff must instead show that the system has “the present capacity to function as autodialer.” 2018 WL 3118056. The Third Circuit rejected arguments – precisely like the ones made by Plaintiff here – that such present capacity could be satisfied by adding computer code or new software to the device’s operating system, or that e ability to generate random numbers is an inherent function in any operating system. See id. and Opp. at 23-24. The Third Circuit thus concluded that the plaintiff could not establish that the system had the “present capacity” to generate random or sequential numbers, and instead, the system sent only confirmatory text messages to specifically targeted users. While the plaintiff “suffered great annoyance” in the form of 27,800 unwanted text messages, those messages were specifically directed to plaintiff’s telephone number, and “not because of random number generation.” Id. The Third Circuit’s rejection of “latent or potential capacity” is fully consistent with the approach already taken by district courts in this Circuit. See, Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 13 of 17 Page ID #:299 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -9- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT e.g, Duguid, 2017 WL 635117, at *4 (allegation that capacity “can be trivially added with minimal computer coding” insufficient); Herrick, 2018 WL 2229131, at *8 (that it might be “theoretically plausible” to reprogram the system to have capacity was insufficient). This Court should follow the D.C. and Third Circuits, and its sister district courts within the Ninth Circuit, in holding that the mere theoretical possibility of reprogramming a system to generate random or sequential numbers is insufficient to allege “capacity” for pur oses of the TCPA.2 IV. PLAINTIFF FAILS TO PLAUSIBLY ALLEGE THAT SIX CONTINTENTS’ SYSTEM IS CAPABLE OF DIALING NUMBERS WITHOUT HUMAN INTERVENTION In determining whether “human intervention” was involved, district courts in this circuit look to “the stages of the process prior to Plaintiff’s receipt of the text message.” Luna v. Shac, LLC, 122 F. Supp. 3d 936, 941 (N.D. Cal. 2015) (declining to follow out of circuit orders and examining steps involved in sending text message in holding that text messages were result of “human intervention”). Plaintiff’s allegations underscore that human intervention is the trigger for sending the messages – the act of booking a reservation to a specific hotel, on specific dates, results in a confirmation message sent to the specified phone number. FAC ¶ 18. The confirmation is thus the product of two acts of human intervention: (1) the act of booking a reservation, a d (2) the association of the reservation with a phone number. Confirmatory textmessages following these acts do not plausibly suggest lack of human intervention. Rather, such specific, targeted messages, triggered by the booking of a hotel reservation, mean the messages are 2 Plaintiff argues that he may be relieved of his pleading burdens because discovery may later reveal additional information. Opp. at 23-24. Plaintiff has it backwards. A plaintiff cannot state a claim based only on the speculative hope that in the future discovery may support a theory of liability. Ashcroft v. Iqbal, 556 U.S. 662, 678-89 (2009). It “defies common se se” for plaintiffs to contend that, even if their pleadings are insufficient, they should be allowed to take discovery in the hope of finding evidence to support their claims. Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987). Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 14 of 17 Page ID #:300 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -10- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT sent only to phone “[n]umbers [that] enter the system through . . . human curation and intervention.” Marks, 55 F. Supp. 3d at 1292. Plaintiff erroneously argues that the only relevant step is the actual transmission of the message. Opp. at 16. The cases cited by Plaintiff – all of which were out of circuit – largely involved predictive dialers. See Morse v. Allied Interstate, LLC, 65 F. Supp. 3d 407, 410 (M.D. Pa. 2014); Sterk v. Path, Inc., 46 F. Supp. 3d 813, 819 (N.D. Ill. 2014); Brown v. NRA Grp., LLC, No. 6:14-CV-610- ORL-31, 2015 WL 3562740, at *4 (M.D. Fla. June 5, 2015).3 Because predictive dialers place calls automatically and en masse, and no human intervention is necessary to trigger a call, it is understandable why some courts focused on whether there was human intervention precisely when the telephone call was made. By contrast, the content and context of the text messages here show they were sent to only a single selected number, one at a time, with customized messaging. They are not mass, impersonal advertisements.4 In analogous situations, district courts in the Ninth Circuit have held that it was human interaction earlier in the process that caused the system to send the message. See, e.g., McKenna v. WhisperText, No. 5:14-CV-00424-PSG, 2015 WL 428728, at *3 (N.D. Cal. Jan. 30, 2015) (noting texts sent by an automated system but only in response to an “affirmative” human action); Gragg v. Orange Cab Co., 995 F. Supp. 2d 1189, 1191 (W.D. Wash. 2014) (detailing an automated system that would craft and send messages to riders after a human had taken an action on a mobile 3 The sole text messaging case cited by Plaintiff rega ding human intervention, Johnson v. Yahoo!, Inc., No. 14 CV 2028, 2014 WL 7005102, at *5 (N.D. Ill.Dec. 11, 2014), noted that defendant’s argument regarding human interaction prior to sending a text message was “reasonable,” but held that the record prevented th court from holding that the system “has no capacity to act without human intervention.” Id. at *5. In this case, Six Continents’ system could not send messages without human intervention, becaus it obviously cannot send a confirmatory text message unless an individual reserves a hotel room. 4 Indeed, Plaintiff alleges that he continued to receive text messages despite texting back “STOP” and “STOP ALL.” SAC ¶ 22. Had the messages indeed been sent automatically, such responses would have terminated that automatic process. Instead, the messages continued, suggesting they were indeed “triggered by some form of human action.” Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 15 of 17 Page ID #:301 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -11- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT app); Glauser v. GroupMe, Inc., No. C 11-2584 PJH, 2015 WL 475111, at *6 (N.D. Cal. Feb. 4, 2015) (human intervention where texts at i sue were merely “triggered” by intentional human activity, and automated system actually “dial[ed]” numbers to which the texts were sent). Consistent with these cases, the Court should find that the messages here were not sent by an ATDS. V. PLAINTIFF’S SUPPLEMENTAL AUTHORITY IS INAPPOSITE Nothing in Plaintiff’s Notice of Supplemental Authority (Dkt. No. 33), McMillion v. Rash Curtis & Assocs., No. 16-CV-03396-YGR, 2018 WL 3023449 (N.D. Cal. June 18, 2018), alters the outcome of this case, nor the requirement, reiterated in Satterfield, that an ATDS must have the capacity ‘to store or pr duce telephone numbers to be called, using a random or sequential number generator.’” 569 F.3d at 951. The procedural posture of McMillion’s order was a motion for reconsideration, and thus the question was whether t re was “an intervening change in the controlling law.” Id. at *3. The district court concluded there was no intervening change because ACA Int’l did not overturn the FCC’s 2003 and 2008 Orders. But as explained above, this reading of ACA Int’l is erroneous – the D.C. Circuit expressly “set aside” the FCC’s expansive int rpretation of the TCPA with respect to whether a device could qualify as an ATDS even if it lacked the functionality to generate sequential or random numbers. See ACA Int’l, 885 F.3d at 701-02. In addition, McMillion, which was a predictive dialer case, not a text messaging case, focused on whether the system had the potential capacity to call randomly or sequentially generated telephone numbers. 2018 WL 3023449, at *3. It relied on Meyer v. Portfolio Recovery Assocs., 707 F.3d 1036, 1043 (9th Cir. 2012), for the proposition that predictive dialers qualify as an ATDS. 2018 WL 3023449, at *3. But in Meyer, the defendant conceded that its predictive dialers had the requisite capacity under the TCPA, and thuse Ninth Circuit concluded Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 16 of 17 Page ID #:302 DLA P IPER LLP (US) LOS ANGELES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WEST\282277376.2 -12- REPLY IN SUPPORT OF MOTION TO DISMISS SE COND AMENDED COMPLAI NT this was sufficient to determine that the device at issue qualified as an ATDS. Meyer, 707 F.3d at 1043. McMillion’s brief discussion regarding “capacity” with respect to predictive dialers is of no assistance to Plaintiff here. As noted, this case involves text messages directly and specifically targeted to Plaintiff, not predictive dialers. Further, while Satterfield observed that a device “need not actually store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it,” 569 F.3d at 951, both ACA Int’l and the Third Circuit’s recent decision in Dominguez clarify that a plaintiff cannot rely on “latent or potential capacity to function as an autodialer.” 2018 WL 3118056. The FCC’s interpretation to the contrary was “utterly unreasonable.” ACA Int’l, 885 F.3d at 699. It should not and cannot bind this Court. VI. CONCLUSION For the forgoing reasons, Six Continents respectfully requests that the Court grant its Motion to Dismiss without leave to amend. Dated: June 29, 2018 DLA PIPER LLP (US) By:/s/ Edward D. Totino EDWARD D. TOTINO BENJAMIN W. TURNER Attorneys for Defendants SIX CONTINENTS HOTELS, INC. Case 2:16-cv-03719-ODW-JEM Document 35 Filed 06/29/18 Page 17 of 17 Page ID #:303