• by Wendy Davis  @wendyndavis, September 5, 2014

The mobile social network Path argues in new court papers that it didn't violate a federal telemarketing law by allegedly sending text messages to users' friends.

Path filed the papers in hopes of convincing the 7th Circuit Court of Appeals to hear the company's appeal of an earlier ruling by U.S. District Court Judge Samuel Der-Yeghiayan. In June, he refused to dismiss a lawsuit accusing the company of violating the Telephone Consumer Protection Act.

“The decision below is wrong and warrants immediate review,” Path says of Der-Yeghiayan's ruling. The company adds that Der-Yeghiayan's decision marks “a dramatic expansion” of the telemarketing law and could pose new legal risks for anyone who sends text messages.

The lawsuit dates to 2013, when Illinois resident Kevin Sterk alleged that he received a text message stating that Path user Elizabeth Howell wanted to show him photos on the service. The text contained a link to a site where Sterk could register to join the social networking service.

Sterk, who is seeking class-action status, argued that Path violated the Telephone Consumer Protection Act by sending him the invitation. That law prohibits companies from using automated dialers to send SMS ads without the recipients' permission.

Path unsuccessfully argued to Der-Yeghiayan that its system didn't rely on automated dialers. The company said its SMS-sending system doesn't itself generate numbers, but instead sends messages to people whose phone numbers were provided by users.

The company now is asking the 7th Circuit to decide the meaning of the “automated dialer.” Path says in its motion papers that Congress intended for the telemarketing law to apply to systems that can generate phone numbers, either randomly or in a sequence.

Path argues that applying the law to companies that can automatically place calls to a list of numbers -- as opposed to generate those numbers -- would expose most cell phone owners to liability.

“Most cell phones have speed dial, group texting, and text auto-response capabilities -- functions that give them the capacity to automatically dial numbers from pre-existing lists, without a human manually typing in each number,” Path argues. “Unless corrected by this court, the ruling below will subject every call or text from a cell phone, mobile device, or computer to another cell phone to potential TCPA liability.”

But Sterk says in court papers filed this week that Der-Yeghiayan’s decision was correct, and that Path's arguments are “meritless.”

Sterk adds that Path's alleged “spam­-viting” is the kind of practice that Congress meant to prohibit. “There can be little doubt that sending unsolicited text messages promoting its app en masse to cell phone numbers scraped from a new user’s mobile device is anything other than an abusive telemarketing practice,” he argues.

Questions about the definition of automated dialers are coming up with increased frequency in the courts. So far, judges have reached different conclusions about what that term should cover.

While Der-Yeghiayan ruled against Path, U.S. District Court Judge Michael Baylson in Pennsylvania recently sided with Yahoo about the scope of the telemarketing law. In that case, Baylson dismissed a lawsuit brought by Philadelphia resident Bill Dominguez, who alleged that Yahoo violated the Telephone Consumer Protection Act by sending him thousands of misdirected SMS messages. Dominguez is now appealing that ruling to the 3rd Circuit Court of Appeals.