- October 30, 2014
- Posted by: Seth Heyman
- Category: Marketing & Advertising Law
The vicious TCPA war being fought in the courts shows no sign of slowing. As a follow up to a previous post, here is a summary of a few recent battles:
Victory for Defendant: Marks v. Crunch San Diego, LLC
In what has become a depressing pattern, health club company Crunch was hit with a TCPA lawsuit after allegedly sending promotional text messages to the plaintiff. Crunch filed a motion for summary judgment, claiming that it did not use an “automated telephone dialing system,” to transmit promotional text messages, but instead utilized a third-party web-based platform that requires humans to manually input the phone numbers before they are sent.
Crunch argued that because the platform it uses to send text messages “lacks the capacity to store or produce telephone numbers . . . using a random or sequential number generator,” it cannot – by definition – be an autodialer under the TCPA and, therefore, the TCPA does not apply. The Court agreed.
In rendering its decision, the Court analyzed other courts’ interpretations of “capacity” under the TCPA which have determined that it is the system’s present, not potential, capacity to store, produce or call randomly or sequentially generated telephone numbers that matters for purposes of falling within the scope of the TCPA’s autodialer definition. The Court noted that because the platform used by Crunch requires “human curation and intervention” for number entry, it could not reasonably be considered a random or sequential number generator within the purview of the TCPA, and did not violate the statute.
Victory for Plaintiff: Gomez v. Campbell-Ewald Co.
The Defendant was a marketing consultant hired by the US Navy to develop and execute a recruiting campaign targeting young adults aged 18 to 24. The campaign included text messages, which were to be sent only after consumers consented to receive them.
Campbell-Ewald hired another company to send the texts and for generating the list of phone numbers to be dialed to which they were sent. The 40-year-old plaintiff (clearly not a recruitment candidate) later received a text stating: “Destined for something big? Do it in the Navy. Get a career. An education. And a chance to serve a greater cause. For a FREE Navy video call [number].” Gomez filed a putative class action against Campbell-Ewald for allegedly violating the TCPA.
The marketing company argued that it could not be liable under the statute because it outsourced the dialing and did not actually make any calls on behalf of its client. But the Ninth Circuit Court of Appeals determined that liability may be found for another’s TCPA violations where an agency relationship, as defined by federal common law, is established between the defendant and a third-party caller.
The Ninth Circuit’s decision in this case is an apparent contradiction to its previous decision holding that Taco Bell was not vicariously liable for a TCPA violation.
Victory for Defendant: Mais v. Gulf Coast Collection Bureau Inc.
The Eleventh Circuit Court of Appeals reversed a lower court’s summary judgment in favor of the plaintiff in a case against a third party debt collector that directed numerous robocalls to his cell phone in an effort to collect on a debt owed to Westside Regional Hospital.
While being treated in the emergency room, the plaintiff’s wife completed an admissions form on which she provided her cell phone number. The form clearly stated that all information provided by the patient could be shared with third parties for billing purposes.
Mais filed a putative class action suit under the TCPA. Gulf Coast moved for summary judgment, arguing that it could not be liable because Mais expressly consented to be contacted when his wife gave his cell phone number and signed the admissions form. The defendant argued that the calls fell within a statutory exception for “prior express consent” as interpreted in a 2008 declaratory ruling by the FCC.
The lower court reviewed the FCC ruling and determined that it did not apply. On appeal, however, the Eleventh Circuit Court noted that pursuant to the Hobbs Act, Federal courts do not have jurisdiction to invalidate FCC orders. Instead, Congress granted that power exclusively to federal appellate courts, and the lower court exceeded its authority by invalidating the 2008 FCC Ruling.
The Court determined that Mais’s claims fell squarely within the scope of the FCC Ruling, which stated that the provision of a cell phone number to a creditor “reasonably evidences prior express consent to be contacted at that number regarding the debt.” Thus, consent was provided when the plaintiff’s wife signed the form that granted permission for the hospital to release her information to the creditor.