Sunday, October 28, 2012

FYI: 9th Cir Rules Against Retailer in TCPA Putative Class Action, Involving Customer Service/Information Call w/ Alleged Marketing Component

The U.S. Court of Appeals for the Ninth Circuit recently held that a retailer violated the Telephone Consumer Protection Act, and the Washington Automatic Dialing and Announcing Device Act, when it called a consumer to provide information regarding its rewards program, after the retailer had agreed to cease calling the consumer. 
A consumer signed up for a payment plan to finance his purchase of a computer from an electronics retailer.  The parties dispute whether the consumer also signed up for the retailer's rewards program at the time of that purchase.  The retailer contacted the consumer on several occasions via automated telephone calls.  The consumer complained to the Washington Attorney General's office after one such automated call, and the retailer agreed to cease calling the consumer.  Several months later, the consumer received another automated call from the retailer, in which the retailer advised the consumer of changes to the rewards program. 
The consumer then filed a class-action complaint, alleging violations of the Telephone Consumer Protection Act ("TCPA"), as well as the Washington Automatic Dialing and Announcing Device Act ("WADAD").  The lower court granted summary judgment in the retailer's favor, and the consumer appealed. 
As you may recall, the TCPA makes it unlawful "to initiate any telephone call to any residential telephone line using an artificial voice...without the prior express consent of the called party, unless the call is...exempted by rule or order by the Commission..."  47 U.S.C. Sec. 227(b)(1)(B).  Although the FCC exempted from that prohibition calls that do not "include or introduce an unsolicited advertisement...", calls that that have both a customer service/informational component and a marketing component remain prohibited.  See 47 C.F.R. Sec. 64.1200(a)(2)(iii) (2011); In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14097-14098 para. 140-142. 
On appeal, the retailer argued that the calls were made for informational purposes only, and did not encourage the consumer to buy any specific goods or servicers. 
The Ninth Circuit rejected the retailer's argument, finding that the calls made by the retailer encouraged the consumer to redeem his rewards points, which would involve making a purchase.  Further, the calls directed the consumer to a website where he could make purchases, and thanked him for shopping with the retailer. 
Based on the contents of the calls, the Ninth Circuit concluded that "the calls encouraged the listener to make future purchases at [the retailer]."  Because neither the statute nor the regulations "require an explicit mention of a good, product or service where the implication is clear from the context," the Court held that the calls were prohibited under the TCPA. 
The Ninth Circuit also considered whether the consumer might have consented to receive the telephone calls.  The Court found little merit to this suggestion, however, finding that the consumer "repeatedly and expressly asked not to be contacted." 
Finally, the Ninth Circuit examined the consumer's claims under the WADAD.  It found that requirements under the WADAD were largely similar to those of the TCPA, and so reached the same conclusion as to both statutes. 
Accordingly, the Ninth Circuit reversed the lower court's decision, and remanded the matter for further proceedings consistent with its opinion. 

Ralph T. Wutscher
McGinnis Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
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