Opinion
C19-1430JLR
08-13-2021
DAVID BORDEN, Plaintiff, v. EFINANCIAL, LLC, Defendant.
ORDER GRANTING MOTION TO DISMISS
JAMES L. ROBART, United States District Judge.
I. INTRODUCTION
Before the court is Defendant eFinancial, LLC's (“eFinancial”) motion to dismiss Plaintiff David Borden's second amended complaint. (Mot. (Dkt. # 57); see also Reply (Dkt. # 63).) Mr. Borden opposes eFinancial's motion. (Resp. (Dkt. # 62).) The court has considered the motion, all submissions filed in support of and in opposition to the motion, the relevant portions of the record, and the applicable law. Being fully advised, the court GRANTS eFinancial's motion to dismiss.
Neither party requests oral argument (see Mot., Resp.), and the court finds oral argument unnecessary to its disposition of the motion, see Local Rules W.D. Wash. LCR 7(b)(4).
II. BACKGROUND
Mr. Borden filed his original complaint in this proposed class action on September 9, 2019. (Compl. (Dkt. # 1).) On August 10, 2020, Mr. Borden filed an amended complaint, asserting one cause of action on behalf of himself and a proposed class under the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 (“the TCPA”). (Am. Compl. (Dkt. # 39).) The TCPA prohibits companies from using an “automatic telephone dialing system” (“ATDS” or “autodialer”) to make calls to a telephone No. assigned to a cellular service. 47 U.S.C. § 227(b)(1)(A). It defines an ATDS as “equipment which has the capacity (A) to store or produce telephone No. to be called, using a random or sequential No. generator; and (B) to dial such numbers.” Id. § 227(a)(1). The TCPA does not impose liability where the “called party” provides “prior express consent” to receive calls. Id. § 227(b)(1)(A).
Mr. Borden alleged that after completing a basic form on Progressive.com's website that offered a quote for life insurance, he was directed to a page on eFinancial's website that requested additional information, including his phone number. (Am. Compl. ¶¶ 13-16; see also SAC (Dkt. # 56) ¶¶ 15-18.) After completing the eFinancial form, Mr. Borden clicked a button labeled “Next, your rates, ” to proceed with the rate quote. (Am. Compl. ¶¶ 17-20; SAC ¶¶ 19-22.) Mr. Borden alleged that he did not see a message in fine print below the “Next, your rates” button before he clicked. (Am. Compl. ¶ 21; SAC ¶ 23-24.) That message stated:
By pressing the button above you agree to this website's Privacy Policy, and you consent to receive offers of insurance from Efinancial [sic], LLC at the email address or telephone No. you provided, including autodialed, pre-recorded calls, SMS or MMS messages. Message and data rates may apply. You recognize and understand that you are not required to sign this authorization in order to receive insurance services from eFinancial and you may instead reach us directly at (866) 912-2477.(Am. Compl. ¶¶ 21-22, Ex. 1; SAC ¶¶ 23-24, Ex. 1 (“ABOUT form”).)
Although Mr. Borden decided not to move forward with his application for life insurance, he subsequently began to receive marketing text messages from eFinancial on his personal cell phone (the “eFinancial Insurance Text Message Advertisements”). (Am. Compl. ¶¶ 29-32; SAC ¶¶ 31-35.) He alleged that eFinancial sent its Insurance Text Message Advertisements using an ATDS and that the “Next, your rates” button and the fine print beneath it were insufficient to establish that he gave “prior express consent” to receive messages. (Am. Compl. ¶¶ 22-25, 37; SAC ¶¶ 24-27, 40.)
On October 16, 2020, the court granted eFinancial's motion to stay this matter pending the Supreme Court's decision in Facebook, Inc. v. Duguid, No. 19-511 (U.S.), which promised to resolve a split among the Courts of Appeals regarding how to interpret the statutory definition of “automatic telephone dialing system.” (10/16/20 Order (Dkt. # 51) at 3-4 (discussing circuit split), 7); see also Facebook Inc. v. Duguid, __ U.S. __, 141 S.Ct. 1163, 1168 (2021) (“We granted certiorari to resolve a conflict among the Courts of Appeals regarding whether an autodialer must have the capacity to generate random or sequential phone numbers.”).
The Supreme Court issued its decision on April 1, 2021. See Duguid, 141 S.Ct. at 1163. The Court held that “a necessary feature of an [ATDS] is the capacity to use a random or sequential No. generator to either store or produce phone No. to be called.” Id. at 1173. Thus, the Court concluded that “[b]ecause Facebook's [text message] notification system neither stores nor produces No. ‘using a random or sequential No. generator, '” it is not an ATDS, and Mr. Duguid's TCPA claim was properly dismissed. Id. at 1168-69. In reaching this decision, the Supreme Court abrogated prior Ninth Circuit precedent that had held that an ATDS need only have the capacity to “store No. to be called” and to “dial such No. automatically.” Id. at 1168 (quoting Duguid v. Facebook (“Duguid I”), 929 F.3d 1146, 1151 (9th Cir. 2019), overruled by Duguid, 141 S.Ct. at 1168); see also Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1053 (9th Cir. 2018).
After the Supreme Court issued its decision, the parties agreed that Mr. Borden would file an unopposed motion to file a second amended complaint and that eFinancial would then move for dismissal. (JSR (Dkt. # 52).) The court granted leave to amend, (5/11/21 Order (Dkt. # 55)), and Mr. Borden filed his second amended complaint on May 11, 2021, (SAC). In his second amended complaint, Mr. Borden adds allegations that eFinancial uses a sequential No. generator to store and produce telephone No. to which it sends the eFinancial Insurance Text Message Advertisements. (See, e.g., SAC ¶¶ 6, 34, 40, 46-50; see also MTA (Dkt. # 54), Ex. 1 (“Redlined SAC”) ¶¶ 6, 34, 40, 46-50.) For example, Mr. Borden now alleges:
In sending [the] eFinancial Text Message Advertisements, [eFinancial] used a sequential No. generator to store and subsequently produce (i.e., select, retrieve, and/or provide the No. from memory) [Mr. Borden] and the putative class's telephone numbers. [eFinancial] used the sequential No. generator to determine the order in which to pick the telephone No. to be dialed from [eFinancial's ]stored list (database), such that each eFinancial Insurance Text Message Advertisement is sent in an adjustable but predetermined sequential order, which is based on the No. of days since the lead form was initially completed (“eFinancial Mass. Text Advertisement Sequential Order”). This was done for the sole purpose of bombarding [Mr. Borden] and the putative class with eFinancial Insurance Text Message Advertisements in a specific, yet adjustable, sequential order.(SAC ¶ 34.) Mr. Borden further alleges:
[eFinancial's]ATDS uses a sequential No. generator to store telephone numbers, and to subsequently determine the order in which to pick the telephone No. to be dialed. Specifically, the ATDS picks the order based on the adjustable but predetermined eFinancial Mass. Text Advertisement Sequential Order, for the sole purpose of dialing those No. and sending them eFinancial Insurance Text Message Advertisements en masse.
. . . Additionally, Defendant's ATDS also uses a sequential No. generator to assemble sequential strings of No. in a field labeled LeadID, which are then stored and assigned to a telephone No. and are used when the sequential No. generator picks the order, which is based on the adjustable but predetermined eFinancial Mass. Text Advertisement Sequential Order.
. . . [eFinancial's ]ATDS further has the capacity to dial the assembled sequential strings of No. it stores in the LeadID field.(SAC ¶¶ 48-50.) Thus, Mr. Borden alleges that eFinancial uses a sequential No. generator to (1) determine the order in which to pick phone No. to be dialed from a stored list or database of phone No. and (2) populate the LeadID field that is assigned to a phone No. and used to identify phone No. in its database. (See id.) Mr. Borden does not allege that eFinancial generates random or sequential phone No. and sends text messages to those phone numbers. (See generally SAC.) Mr. Borden also amended his allegations that he did not provide prior express consent to receive the eFinancial Insurance Text Message Advertisements. (See SAC ¶¶ 7-8; Redlined SAC ¶¶ 7-8.) Specifically, he now alleges that
[eFinancial] chose to utilize an inconspicuous purported Internet browse-wrap agreement, which failed to establish assent from the consumer and did not include the disclosures required by the TCPA in order to protect consumers, leaving insurance seekers with no choice but to agree to the terms of [eFinancial's] purported agreement to participate in [eFinancial's] mass text message advertising campaign if the consumer endeavored to purchase online insurance.(SAC ¶ 7.)
On June 8, 2021, eFinancial filed the instant motion to dismiss Mr. Borden's second amended complaint. (Mot.)
III. ANALYSIS
eFinancial contends that Mr. Borden's TCPA claim must be dismissed with prejudice because (1) he acknowledges that he provided his phone No. to eFinancial and, as a result, the phone No. was not randomly or sequentially generated as required to plausibly allege the use of an ATDS, and (2) he gave prior express consent to receive the text messages when he clicked the “Next, your rates” button on the eFinancial website. (See generally Mot.) Mr. Borden counters that (1) Duguid does not require that a phone No. be randomly or sequentially generated to plausibly allege the use of an ATDS and (2) his allegations do not establish that he gave prior express consent to receive eFinancial's text messages. (See generally Resp.) As discussed in greater detail below, the court agrees with eFinancial that Mr. Borden has not plausibly alleged that it used an ATDS to send its text messages. The court grants eFinancial's motion to dismiss and dismisses Mr. Borden's second amended complaint with prejudice.
eFinancial disputes that the TCPA's prohibitions extend to sending unsolicited text messages. (See Resp. at 5 n.2.) It assumes for the purposes of this motion, however, that text messages are covered. (See Id. (citing Duguid, 141 S.Ct. at 1168 n.2 (assuming, but not deciding, that TCPA extends to text messages)).)
A. Standard of Review
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Although not a “probability requirement, ” this standard asks for “more than a sheer possibility that a defendant has acted unlawfully.” Id. The court construes the complaint in the light most favorable to the nonmoving party, Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005), and must accept all well-pleaded allegations of material fact as true, see Wyler Summit P'ship v. Turner Broad. Sys., 135 F.3d 658, 661 (9th Cir. 1998). However, the court need not accept as true a legal conclusion presented as a factual allegation. Iqbal, 556 U.S. at 678. The court may consider materials attached to or incorporated by reference in the pleadings. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
B. eFinancial's Motion to Dismiss
To state a claim under 47 U.S.C. § 227(b)(1)(A), a plaintiff must plausibly allege that “(1) the defendant called a cellular telephone number; (2) using an [ATDS]; (3) without the recipient's prior express consent.” Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1042-43 (9th Cir. 2012). As noted above, an ATDS is defined as “equipment which has the capacity (A) to store or produce phone No. to be called, using a random or sequential No. generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1).
Before Duguid, the Ninth, Second, and Sixth Circuits had held that a system qualified as an ATDS if it had the capacity to store phone No. to be called and to dial such No. automatically; it did not need to have the capacity to use a random or sequential No. generator to generate the phone No. in the first instance. See Duguid, 141 S.Ct. at 1169 n.2 (citing Duguid I, 936 F.3d at 1152 (holding that an ATDS need not be able to use a random or sequential generator to store phone numbers; rather, “it need only have the capacity to ‘store No. to be called' and ‘to dial such No. automatically'”); Duran v. La Boom Disco, Inc., 955 F.3d 279, 290 (2d Cir. 2020) (holding that system was an ATDS because it had capacity to store a list of phone No. collected through defendant's Facebook advertisement and to “dial those stored No. without human intervention”); Allan v. Pa. Higher Educ. Assistance Agency, 968 F.3d 567, 579 (6th Cir. 2020) (holding that defendant's device was an ATDS where it stored phone No. provided by student-loan recipients and dialed those phone No. automatically)). Other circuits, however, had held that a claim for violation of § 227(b)(1)(A) requires that the defendant's dialing system randomly or sequentially generate phone No. and then dial those numbers. See Duguid, 141 S.Ct. at 1169 n.2 (citing Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 468 (7th Cir. 2020) (Barrett, J., for the court) (holding that AT&T's system was not an ATDS because it “exclusively dials No. stored in a customer database”); Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301, 1306-08 (11th Cir. 2020) (noting that “Congress . . . passed the law to prevent callers from accidently reaching 911 lines by dialing randomly or sequentially generated telephone numbers-a concern raised in the legislative debates” and holding that § 227 “cover[ed] devices that randomly or sequentially generated telephone No. and dialed those numbers, or stored them for later dialing”); Dominguez v. Yahoo, Inc., 894 F.3d 116, 119 (3d Cir. 2018) (affirming grant of summary judgment to Yahoo where plaintiff could not show that Yahoo's system “had the present capacity to function as an autodialer by generating random or sequential telephone No. and dialing those numbers”). The Court granted certiorari to resolve this circuit split, which it characterized to be about “whether an autodialer must have the capacity to generate random or sequential phone numbers.” Duguid, 141 S.Ct. at 1168-69.
The Supreme Court reversed Duguid I and held that the phrase “using a random or sequential No. generator” modifies both “store” and “produce” in the statutory definition. Id. at 1169. The Court explained that Congress specifically intended § 227(b)(1)(A) to address the problems caused when companies used technology to dial random or sequential blocks of telephone No. automatically:
This case concerns “automatic telephone dialing systems” (hereinafter autodialers), which revolutionized telemarketing by allowing companies to dial random or sequential blocks of telephone No. automatically. Congress found autodialer technology to be uniquely harmful. It threatened public safety by “seizing the telephone lines of public emergency services,
dangerously preventing those lines from being utilized to receive calls from those needing emergency services.” . . . Indeed, due to the sequential manner in which they could generate numbers, autodialers could simultaneously tie up all the lines of any business with sequentially numbered phone lines. Nor were individual consumers spared: Autodialers could reach cell phones, pagers, and unlisted numbers, inconveniencing consumers and imposing unwanted fees.Id. at 1167 (quoting H.R. Rep. No. 102-317, p.24 (1991) (internal citations omitted)). Thus, “[e]xpanding the definition of an autodialer to encompass any equipment that merely stores and dials telephone No. would take a chainsaw to these nuanced problems when Congress meant to use a scalpel.” Id. at 1171; see also Id. at 1172 (“That Congress was broadly concerned about intrusive telemarketing practices . . . does not mean it adopted a broad autodialer definition. Congress expressly found that the use of random or sequential No. generator technology caused unique problems for business, emergency, and cellular lines. Unsurprisingly, then, the autodialer definition Congress employed includes only devices that use such technology, and the autodialer prohibitions target calls made to such lines.” (internal citations omitted).)
In this context, Mr. Borden's allegations are insufficient to establish that eFinancial's system is an ATDS. He alleges that eFinancial's system uses a sequential No. generator to select which stored phone No. to dial and to populate the LeadID field that eFinancial's system uses to identify “or ‘point to'” phone No. in its database. (See SAC ¶¶ 34, 48-50.) He does not, however, allege that eFinancial's system “generate[s] random or sequential phone numbers” to be dialed; instead, he expressly alleges that he provided his phone No. to eFinancial through the ABOUT form. See Duguid, 141 S.Ct. at 1168; (see SAC ¶¶ 19-22). eFinancial's use of its system to send advertisement text messages to consumers who entered their phone No. into a form on its website simply does not implicate the problems caused by autodialing of random or sequential blocks of No. that Congress sought to address when it passed the TCPA.
Mr. Borden relies on footnote 7 of Duguid for the proposition that it is enough that an autodialer “use a random No. generator to determine the order in which to pick No. from a preproduced list [and] then store those No. to be dialed at another time.” (Resp. at 2 (quoting Duguid, 141 S.Ct. at 1172 n.7); see also Resp. at 5-6.) As eFinancial points out, however, Mr. Borden's argument relies on a selective reading of one line within footnote 7 and ignores the greater context of that footnote and the opinion. As another district court recently recognized, “the Court employed the quoted line to explain how an autodialer might both ‘store' and ‘produce' randomly or sequentially generated phone numbers.” Hufnus v. DoNotPay, Inc., No. 20-cv-08701-VC, 2021 WL 2585488, at *1 (N.D. Cal. June 24, 2021). The Supreme Court cited an amicus brief filed by the Professional Association for Consumer Engagement (“PACE”) in support of the narrow interpretation of ATDS that the Eleventh Circuit set forth in Glasser “narrower ATDS interpretation of Glasser” rather than the expansive interpretation favored by the Ninth, Second, and Sixth Circuits. Duguid, 141 S.Ct. at 1172 n.7; (see Reply, Ex. A (“PACE Brief”) at 32-33). Rather than support Mr. Borden's position, the PACE Brief makes clear that the preproduced list of phone No. referenced in footnote 7 was itself created through a random or sequential No. generator, thus differentiating it from the stored list of consumer-provided phone No. used by eFinancial. (See generally PACE Brief at 19; see SAC ¶¶ 19-22); see also Hufnus, 2021 WL 2585488, at *1-*2 (discussing footnote 7 and granting motion to dismiss where plaintiff alleged that defendant collected phone No. from consumers who signed up for defendant's services); Timms v. USAA Fed. Savings Bank, No. 3:18-cv-01495-SAL, 2021 WL 2354931, at *5-*6 (D.S.C. June 9, 2021) (discussing footnote 7 and granting motion for summary judgment where plaintiff contended that defendant's system qualified as an ATDS if it used a random No. generator to determine the order in which to pick phone No. from a preproduced list).
Because Mr. Borden has not plausibly alleged that the system that eFinancial used to send its Insurance Text Message Advertisements was an ATDS within the meaning of the TCPA, the court need not address whether Mr. Borden plausibly alleged that he did not provide prior express consent for eFinancial to send him those text messages. The court GRANTS eFinancial's motion to dismiss Mr. Borden's second amended complaint. Further, because Mr. Borden expressly alleges that he provided his phone number to eFinancial-and thus the text messages at issue necessarily were not sent through an ATDS-the court concludes that amendment would be futile and dismisses this action with prejudice. See Foman v. Davis, 371 U.S. 178, 182 (1962); Flowers v. First Hawaiian Bank, 295 F.3d 966, 976 (9th Cir. 2002).
IV. CONCLUSION
For the foregoing reasons, the court GRANTS eFinancial's motion to dismiss (Dkt. # 57). The court DISMISSES this action with prejudice.