Friday, June 23, 2017

FYI: 7th Cir Rejects Narrow Reading of TCPA Consent

The U.S. Court of Appeals for the Seventh Circuit recently concluded that a consumer's consent to receive promotional information from a retailer is sufficient consent under the federal Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. ("TCPA") to receive other mass marketing texts. 


The primary issue the Seventh Circuit addressed was the scope of the consent the consumer provided when she gave her cell phone number to the retailer.  The consumer argued that she only provided her cell phone to receive special discount offers, and did not consent to "mass marketing" text messages. 


The Seventh Circuit rejected the argument, and determined that the marketing texts were part of the "exclusive information and special offers" she consented to receiving.  The Court determined that the texts at issue were all related to the same subject matter covered by the consumer's consent, and the consumer could not attempt to parse her consent to receive some promotional information but not others. 


A copy of the opinion is available at:  Link to Opinion


A retailer used a vendor's software text-messaging platform to connect with its customers.  The store used a variety of methods to obtain its customers' cell phone numbers.  The customers could opt in the store's "Text Club" by providing their cell phone numbers to employees while in the store, they could text the store's name to a number posted in the stores, or they could fill out a card provided by the store.  The card specifically stated that the information would be used solely for providing "exclusive information or special offers." 


The vendor's text-messaging platform used a simple system to deliver text messages.  The numbers received via text were automatically loaded into the vendor's platform.  The numbers given to store employees or received on the card were manually entered into the platform. 


The retailer could then manage its promotional texts by accessing the vendor's web interface.  Employees could log in to the interface and draft messages to be sent to the text club members.  The store had the ability to send the texts immediately or set a future date and time for the messages to be sent.  The store had collected over 20,000 customers for its text club messages.


The plaintiff brought a putative class action complaint against the retailer, alleging the store violated the TCPA by using an automatic telephone dialing system ("ATDS") to send texts without the express consent of the recipient. The trial court certified a class of individuals with a series of Illinois area codes who had received automated texts from the store in the proceeding four years. Both parties then moved for summary judgment.  The trial court denied the plaintiff's motion for summary judgment, and granted the store's motion, concluding that the software platform the vendor used did not qualify as an ATDS under the TCPA.  The plaintiff appealed the granting of summary judgment, and the store cross-appealed the certification of the class.


On appeal, the Seventh Circuit quickly confirmed that text messages to cell phones constitute "calls" under the TCPA and, thus, the prohibitions provided by the TCPA applied to the text messages at issue. 


The trial court based its granting of the retailer's motion for summary judgment on the conclusion that the plaintiff had not sufficiently established the vendor's platform was an ATDS under the TCPA. 


As you may recall, the TCPA prohibits making any call without the prior express consent of the recipient using any ATDS to any cell number.  See 47 U.S.C. § 227(b)(1)(A)(iii).  The trial court concluded that the vendor's platform did not qualify as an ATDS based on the affidavit from one of the vendor's employees who stated that human intervention was required "nearly" every step of the way, from entering the new numbers into the platform, to determining when the texts would be sent to the consumers.


On appeal, the Seventh Circuit concluded that the trial court erred in granting summary judgment on the basis that the vendor's platform was not an ATDS.  According to the Seventh Circuit, the affiant's use of the word "nearly" demonstrated that human intervention was not necessary at the precise point of action prohibited by the TCPA: using technology to "push" the texts to an aggregator that sends the messages out simultaneously to hundreds or thousands of cell phone users at a pre-determined date and time.


The Seventh Circuit then addressed the issue the trial court did not address: the plaintiff's consent to receive text messages. 


The Appellate Court first looked at the evolution of consent under the TCPA.  The Court observed that the FCC explained in its 1992 Order that "persons who knowingly release their phone number have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary." 7 FCC Record at 8769, ¶ 31.  According to the Seventh Circuit, the FCC explained that "telemarketers will not violate our rules by calling a number which was provided as one at which the called party wishes to be reached." Id.


The Seventh Circuit then looked at another order from 2012 in which the FCC determined texts and calls that include or introduce an advertisement or constitute telemarketing require express written consent. See 47 C.F.R. § 64.1200(a)(2). Then, the Court looked at an FCC 2015 Order where the FCC clarified that the existence of a consumer's wireless number in another person's wireless phone, standing alone, does not demonstrate consent to autodialed texts. That Order also clarified that consent could be revoked "at any time and through any reasonable means." 30 FCC Rcd at 7989-90, ¶ 47.


Turning to the facts, the Seventh Circuit noted that plaintiff gave her cell phone number to the store on "several" different occasions. First, plaintiff signed up for what she characterized as a "frequent buyer card." The retailer also produced a "VIP" Card and a "CLIENT LIST" card with plaintiff's name and cell phone number. Both of the cards contained the following disclaimer: "INFORMATION PROVIDED TO [the company] IS USED SOLELY FOR PROVIDING YOU WITH EXCLUSIVE INFORMATION AND SPECIAL OFFERS. [The company] WILL NEVER SELL YOUR INFORMATION OR USE IT FOR ANY OTHER PURPOSE." 


The retailer also provided system notes reflecting plaintiff's request for a sales associate to call her when a particular pair of shoes arrived back in stock. Finally, according to the Court, the record established, and plaintiff admitted, that she texted the store's name to the vendor in order to opt into the text program.


Based on these facts, the Seventh Circuit concluded that plaintiff had provided her consent to receive the texts.  Plaintiff argued that she had only provided her consent to receive texts regarding discounts, but did not consent to "mass marketing" materials.  The Court rejected this argument, concluding that plaintiff's interpretation of "consent" was too narrow. The court relied on a Ninth Circuit decision that concluded "an effective consent is one that relates to the same subject matter as is covered by the challenged calls or text messages." 


The Court also cited an Eleventh Circuit ruling that concluded that by "voluntarily providing his cell phone number" to the defendant, the plaintiff gave his prior express consent to be contacted. 


Based on these rulings, the Seventh Circuit concluded that plaintiff had provided the consent required under the TCPA. 


The Seventh Circuit distinguished the few cases the plaintiff cited in support of her position that her consent was limited.  In those cases, according to the Seventh Circuit, the courts concluded that the consent the consumer provided did not provide "carte blanche" consent to receive all calls or texts.  The Court concluded that those cases actually supported its conclusion that the calls or texts at issue have to be tied to the purpose for which the consent was provided.


As to the class certification issue, the Seventh Circuit affirmed the trial court's certification of a class consisting of individuals with certain Illinois area codes who had received automated texts from the store in the proceeding four years.  The Appellate Court concluded that all of the requirements for certifying a class had been satisfied.  With its ruling on summary judgment, however, the Court determined that the entry of summary judgment was appropriate as to the class, but would not be effective as to any class members who could demonstrate that they never provided their consent to the store. 


Accordingly, the Seventh Circuit affirmed the trial court's granting of summary judgment and certification of a class.




Ralph T. Wutscher
Maurice Wutscher LLP
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