On December 14, the U.S. District Court for the Northern District of California dismissed a proposed Telephone Consumer Protection Act class action against Agoda Company Pte., ruling that the subject text message was not an advertisement for Agoda’s app.

Agoda runs a worldwide hotel reservation service that customers can use through the company’s website or through its smartphone app.  The suit, brought by consumer An Phan, was initially filed in state court but was removed by the defendants.  According to the complaint, Agoda is a subsidiary of Priceline.

Phan alleged that in order to book a hotel room using the service, customers must submit their name, e-mail address, country of residence, and mobile phone number.  Once the booking is complete, customers receive a text message reading: “Good news!  Your Agoda booking [number] is confirmed.  Manage your booking with our free app.”

Judge Beth Labson Freeman agreed with Agoda and ruled that the confirmation texts do not violate the TCPA even though they are sent with an automated dialing system because their purpose is limited to confirming bookings and encouraging customers to manage their bookings via the app.  The texts are sent as part of an “ongoing business transaction.”

In the order granting Agoda’s motion for summary judgment, Judge Freeman wrote: “Here, the context and the content of the messages demonstrate that the purpose of the messages was not to advertise or telemarket, but instead was directly cabined to facilitating and completing an existing transaction.”

Phan argued that Agoda’s inclusion of a link to its app in the confirmation text was “superfluous” advertising for the app.  The Court disagreed, stating that the app is “readily analogized” to Agoda’s website.  According to the ruling, “Though the app may fairly be considered a product or service of Agoda, the messages simply cannot be said to advertise the commercial availability of this product or service under the law.”

Consent Requirement Hinges on Message Content

This decision highlights the importance of the specific content of the communication at issue in a TCPA case, which impacts the type of consent that is required.  According to the FCC in a 2012 ruling, if a call utilizing auto-dialer or prerecorded technology “includes or introduces any advertisement or constitutes telemarketing,” then prior express written consent from the telephone subscriber is required.  In re Rules & Regs. Implementing the TCPA of 1991, 27 FCC Rcd. 1830, 1838-44 (2012) (“2012 Order”); 47 C.F.R. § 64.1200(a)(2).  The FCC regulations define prior express written consent as a written agreement that includes “clear and conspicuous disclosure informing the person signing that by executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice.”  2012 Order, 27 FCC Rcd. at 1855.  In July 2015, the FCC reiterated that compliance hinges on whether the consent meets the definitional requirements of “prior express written consent” as set forth in the FCC’s 2012 Order.  In re Rules & Regs. Implementing the TCPA of 1991, 30 FCC Rcd. 7961, 8012-14 (2015).

Here, Phan provided express consent for the text messages when he voluntarily provided his phone number and agreed to Agoda’s Terms of Use and Privacy Policy.  Written consent was not required because of the Court’s ruling that the text message did not contain advertising or telemarketing content.

Practical Implications

While TCPA cases continue to be filed at an increasingly high rate, companies should ensure that the messages they send or calls they place to customers are based upon consent and that they relate to the business transaction(s) for which the contact information was obtained.  In short, consent continues to be viewed contextually, and compliance measures should reflect this mindset.

The lawsuit is An Phan v. Agoda Company PTE Ltd., et al., Case No. 5:16-cv-07243, in the U.S. District Court for the Northern District of California.