TCPA

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09.21.18

Executive Summary

  • On September 20, 2018, the Ninth Circuit in Marks v. Crunch San Diego, LLC (Case: 14-56834), overturned a lower court’s ruling that a text messaging system was not an automatic telephone dialing system (ATDS) under the Telephone Consumer Protection Act (TCPA), holding instead that the statutory definition of an ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.
  • The Court found that because the language of the TCPA was ambiguous, it used canons of construction, legislative history, and the statute’s overall purpose in determining that a system only needs to store numbers and then dial them automatically to qualify as an ATDS.
  • The Court declined to follow the Third Circuit’s opinion in Dominguez v. Yahoo, Inc., noting the decision unpersuasive as it contained an “unreasoned assumption that a device must be able to generate random or sequential numbers in order to qualify as an ATDS” and “merely avoided the interpretive questions raised by the statutory definition of ATDS.”
  • Many anxiously await the Federal Communication Commission’s (FCC) updated ruling on the definition of an ATDS because its omnibus overhaul will certainly be guided by the analytical framework set forth in the D.C. Circuit’s opinion, and the new Chairman has questioned many of the FCC’s interpretations that have led to the proliferation of TCPA lawsuits.

Background

The system at issue is called the Textmunication system, which is a web-based marketing platform designed to send promotional text messages to a list of stored telephone numbers. Phone numbers can be input manually or automatically. Crunch Fitness communicates with its prospective and current gym members by sending text messages through the Textmunication system, which, after a Crunch Fitness employee logs in, selects the phone numbers, and generates the content, automatically sends the text messages to the selected phone numbers.

Marks signed up for a gym membership with Crunch Fitness in 2012. Over an eleven- month period, he received three text messages. In 2014, Marks filed a putative class action against Crunch Fitness, alleging violations of the TCPA.

The district court granted summary judgment in favor of Crunch Fitness on the ground that the system at issue did not qualify as an ATDS because it did not have the capacity to randomly or sequentially generate numbers and then dial those numbers.

Analysis

After spending significant ink discussing the intent and purpose behind the creation of the TCPA, noting that much of what was written in 1991 related to the technology at the time, the Court discussed ACA International and its effect on the statute itself. The Court noted that because the D.C. Circuit vacated the FCC’s interpretation of what device qualified as an ATDS, “only the statutory definition of ATDS … remains.” (Op., p. 17-18.) Essentially, we have a blank slate. The next issue was whether the statutory text was “plain and unambiguous” or “ambiguous.”

The Court in an almost conclusory fashion found that the statutory text was confusing and thus ambiguous, as evidenced by: (1) Marks and Crunch Fitness offering competing interpretations of the language, and (2) the D.C. Circuit’s opinion finding that “‘[i]t might be permissible’ for the FCC to adopt an interpretation that a device had to generate random or sequential numbers in order to be an ATDS, or that a device could be an ATDS if it was limited to dialing numbers from a stored list.” (Op., p. 20.) The Court then looked to the context and structure of the statutory scheme as well as the statute’s overall purpose for clarification.

“Although Congress focused on regulating the use of equipment that dialed blocks of sequential or randomly generated numbers – a common technology at that time – language in the statute indicates that equipment that made automatic calls from lists of recipients was also covered by the TCPA.” In short, the Ninth Circuit held that Congress intended to regulate devices that make automatic calls. Specifically, as support for this statement, the Court noted:

  • Provisions in the TCPA allow an ATDS to call selected numbers (i.e., those who have provided prior express consent); and
  • Provisions in the TCPA permit exceptions to the statute, which allows a system that qualifies as an ATDS to automatically call specific numbers from a set list.

The Court held, therefore, that “the statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a ‘random or sequential number generator’, but also includes devices with the capacity to dial stored numbers automatically.” In short, the definition of an ATDS means “equipment which has the capacity – (1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator – and to dial such numbers.” (Op., p. 23.)

Practical Implications

There are a few key points that must be noted:

  1. Definition of an ATDS: A severe definition of an ATDS now controls in the Ninth Circuit – absent a successful further appeal.

    What does this mean? Plaintiffs in the Ninth Circuit will likely argue that “anything qualifies as an ATDS.”

  2. Human Intervention: Many have argued (and some courts have agreed) that a system is not truly automatic when human intervention is involved. The Court here essentially found that if human intervention is minor, such as when a person “turn[s] on” or “triggers” a system to dial numbers, the system still qualifies as an ATDS. The Court noted that Congress was targeting equipment that could “engage in automatic dialing, rather than equipment that operated without any human oversight or control.” Thus, merely “flip[ping] the switch on an ATDS,” does not qualify as human intervention, nor does human intervention occur when a human adds phone numbers to a dialing platform.

    What does this mean? Companies should still argue aggressively that human intervention is a necessary part of their telephone or texting system; however, systems that require minimal human intervention may satisfy the Marks definition of an ATDS within the Ninth Circuit.

  3. Capacity: One of the hot button issues is whether capacity means “present” or “potential.” The Dominguez court (among others) found that it meant present. However, the Court here declined to “reach the question whether the device needs to have the current capacity to perform the required functions or just the potential capacity to do so.”

    What does this mean? We continue to live in a world of uncertainty and doubt (at least in the Ninth Circuit), but we take it as a good sign that the Court did not speak to this issue. The trend has been present capacity and we are hopeful that the FCC will cement that in the future.

  4. Possible FCC action: The FCC is currently considering new interpretations of the TCPA in light of ACA International. If nothing else, Marks has raised the stakes of FCC action even higher. All eyes are on the FCC; many are expecting the FCC to issue its new interpretation after the mid-terms, perhaps by the end of the year.

Overall, the Court’s opinion in Marks is a reminder that the TCPA is alive and well. Plaintiff’s lawyers will continue to file litigation and companies will need to continue their strong efforts of TCPA compliance.

If a consumer signs a contract with a creditor in which the consumer consents to be called, can he or she later revoke that consent if they simply change their mind?  In a significant decision under the Telephone Consumer Protection Act, a District Court in the Eleventh Circuit recently said they cannot.  A consumer cannot unilaterally modify the contract – and revoke consent to be called – when that consent was part of a bargained-for-exchange.

In Medley v. Dish Network, LLC, consumer plaintiff Linda Medley entered into an agreement with Dish Network in connection with her satellite service in which she agreed that Dish Network could “contact [her] regarding [her] DISH Network account or to recover any unpaid portion of [her] obligation to DISH, through an automated or predictive dialing system or prerecorded messaging system … .”  Subsequently, in an effort to stop calls, Medley attempted to revoke her prior express consent by faxing her revocation to Dish.  When Dish’s calls to Medley did not cease, she sued the company for violation of the TCPA.

The TCPA prohibits any person from making calls to a cellular telephone using an artificial or prerecorded voice, or using an automatic telephone dialing system, unless the call is made for emergency purposes or with prior express consent of the called party.  In Medley, Dish claimed that the consumer could not revoke her contractual consent and, therefore, the calls to her were permissible.  Medley countered that the TCPA allowed her to revoke consent and that she did so by fax.  The battle lines were drawn.  Could a consumer revoke TCPA consent that was included in a bargained-for contract simply because she changed her mind about being called?

Although the Eleventh Circuit has not addressed this issue yet, the District Court followed a developing line of cases, beginning with the Second Circuit’s Reyes v. Lincoln Automotive Financial Services decision, holding that TCPA consent is not unilaterally revocable when it is contained in an express provision of a contract.  The Court agreed that “it is black-letter contract law that one party to an agreement cannot, without the other party’s consent, unilaterally modify the agreement once it has been executed.”  As a result, the Court found Medley’s revocation ineffectual and concluded that Dish did not violate the TCPA.

TCPA cases around the country are replete with examples of consumers attempting to revoke contractual consent – and racking up significant damages in the process.  The Medley decision puts a significant dent in the validity of that type of alleged revocation. 

 

In a case of first impression, the United States District Court for the Western District of Michigan held that direct-to-voicemail messages qualify as a “call” under the Telephone Consumer Protection Act.  The Court’s opinion thus subjects another modern technology to the requirements of express consent and other strictures of the TCPA.

Defendant debt collector Dyck-O’Neal, Inc. delivered 30 messages to plaintiff consumer Karen Saunders’ voicemail using VoApp’s “DirectDROP” voicemail service.  The service did what it was supposed to do by delivering the voicemail messages through the telephone service provider’s voicemail server without actually calling Saunders’ phone number.  Saunders sued under the TCPA, and Dyck-O’Neal filed for summary judgment on the grounds that “ringless voicemails” are not subject to the TCPA.

The Court began its analysis by drawing predictable parallels to traditional voicemails and text messages which are subject to the TCPA.  The Court quoted from the FCC’s infamous 2015 Order, stating that Congress intended to protect consumers from “unwanted robocalls as new technologies emerge” (emphasis added).  The Court examined the technology behind the ringless voicemails, which included the fact that the technology did not call a telephone number assigned to a cell phone account – the statutory prerequisite for applying the TCPA provision at issue.  Nevertheless, the Court gave credence to the calls’ “effect on Saunders” rather than the fact that no call was made to a cell phone number.  According to the Court, that effect was “the same whether the phone rang with a call before the voicemail is left, or whether the voicemail is left directly in her voicemail box.”  The Court reasoned that Dyck-O’Neal did nothing other than reach Saunders on her cell phone through a “back door,” and failure to regulate this “back door” through application of the TCPA would be an “absurd result.”

Many collection agencies and marketing companies have been successfully using the direct-to-voicemail messages, and many others have considered following suit.  The Court’s decision is part of the risk-benefit analysis but, in the age of a quickly-evolving TCPA jurisprudence, another court may reach a different result.  This decision, facially at odds with the statutory text, could turn out to be an outlier or could mark the beginning of a trend.  Troutman Sanders will continue to monitor this line of cases.

The Third Circuit recently applied the D.C. Circuit’s decision in ACA International v. FCC and granted summary judgment in favor of the defendant in a Telephone Consumer Protection Act claim.  The Court held in Dominguez v. Yahoo, Inc. that Yahoo’s Email SMS Service was not an automatic telephone dialing system (or “ATDS”) because it did not have the “present capacity to function as an autodialer.”

Plaintiff Bill Dominguez filed suit against Yahoo alleging that it violated the TCPA by sending thousands of text messages to his cellular phone without his prior express consent.  Specifically, Dominguez received a text message from Yahoo each time the prior owner of the number received an email sent to his Yahoo email account.  Plaintiff alleged that Yahoo’s Email SMS Service was an ATDS as defined by the TCPA.

In 2014, the Eastern District of Pennsylvania found the Email SMS Service was not an ATDS because it “did not have the capacity to store or produce telephone numbers using a random or sequential number generator.”  On appeal of that decision, the FCC issued its 2015 Declaratory Ruling interpreting “capacity” to “include any latent or potential capacity.”  As a result of the 2015 Declaratory Ruling, the appellate court vacated the district court’s decision and remanded the case to the district court.  Thereafter, Yahoo again moved for summary judgment, which was again granted in its favor.  The district court’s second decision resulted in another appeal to the Third Circuit.  While the appeal was pending, the D.C. Circuit issued its opinion in ACA International v. FCC.

In light of the decision in ACA International, the Third Circuit held that it would “interpret the statutory definition of an autodialer as [it] did prior to the issuance of 2015 Declaratory Ruling.”  The question the Third Circuit focused on is “whether [Dominguez] provided evidence to show that the Email SMS Service had the present capacity to function as an autodialer.”  After reviewing multiple expert reports on Yahoo’s Email SMS Service, the Third Circuit held that Dominguez could “not point to any evidence that create[d] a genuine dispute of fact as to whether the Email SMS Service had the present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.”  The Court further noted that the evidence showed that the Email SMS Service only sent messages to numbers that were “individually and manually inputted into its system by a user.”  As such, the system at issue was not an ATDS and summary judgment was granted in favor of Yahoo.

The decision in Dominguez indicates that courts, post-ACA, will likely be focusing on the narrowed definition of what constitutes an ATDS.  Because courts no longer have to analyze “potential capacity,” we may see a shift in focus to a telephone system’s “present capacity to function as an autodialer by generating random or sequential telephone numbers and dialing those numbers.”

On May 31, the Fourth Circuit Court of Appeals affirmed a $150,000 sanctions award against three consumer attorneys and their law firms for bad faith conduct and misrepresentations.

The opinion reads like a detective story and lays out, in the Court’s own words, “a mosaic of half-truths, inconsistencies, mischaracterizations, exaggerations, omissions, evasions, and failures to correct known misimpressions created by [consumer attorneys’] own conduct that, in their totality, evince lack of candor to the court and disrespect for the judicial process.”

The litigation arose from a payday loan that plaintiff James Dillon obtained from online lender Western Sky.  Later, Dillon engaged attorneys Stephen Six and Austin Moore of Stueve Siegel Hanson LLP and Darren Kaplan of Kaplan Law Firm, PC who filed a putative class action against several non-lender banks that processed loan-related transactions through the Automatic Clearing House network.  Defendant Generations Community Federal Credit Union promptly moved to dismiss Dillon’s lawsuit on the basis of the loan agreement’s arbitration clause.  In response, Dillon challenged authenticity of the loan agreement and a two-year-long dispute ensued during which the district court refused to send the case to arbitration based on Dillon’s authenticity challenge; Generations appealed the district court’s decision; and the Fourth Circuit vacated it and remanded the case for further proceedings on the arbitration issue.  Significantly, when questioned by both the district court and the Fourth Circuit, Six maintained authenticity challenge and represented that he had drafted the complaint without the loan agreement and that Dillon’s claims do not rely on the loan agreement.

Six’s representations regarding the contents of the complaint were problematic given the complaint specifically referenced the loan agreement and its terms.  Evidence uncovered during arbitration-related discovery showed that Dillon possessed the loan agreement all along and, crucially, that he supplied his counsel with a copy of the agreement a week before the complaint was filed.  The latter piece of evidence was discovered only as a result of forensic examination of Dillon’s computer.  Once this evidence came to light, Dillon responded to Generations’ requests for admissions that the loan agreement was authentic.

Generations moved for sanctions against Dillon’s attorneys.  Instead of admitting their wrongdoing, Kaplan argued that there was never any challenge to authenticity, and Six argued that he still doubted authenticity even though he signed Dillon’s admissions that the loan agreement was authentic.  Invoking its inherent authority to punish bad faith behavior, the district court sanctioned Six, Kaplan, and their law firms jointly, ordering them to pay the defendants $150,000 in attorneys’ fees.  Moore was held liable jointly for only $100,000 of the total amount due to his lesser role in the bad-faith conduct.  The lawyers appealed.

The Fourth Circuit summarily rejected their arguments that neither the rules of ethics nor the Federal Rules of Civil Procedure required them to disclose the copy of the loan agreement before discovery commenced.  “These arguments miss the point.  Counsel are not being sanctioned for their failure to disclose the Dillon copy of the Western Sky loan agreement.  Rather, counsel are being sanctioned for raising objections in bad faith—simultaneously questioning (and encouraging the district court to question) the authenticity of a loan agreement without disclosing that the Plaintiff provided them a copy of that loan agreement before the complaint was filed.”

Discovery in consumer litigation is often asymmetrical and focuses on defendants’ obligations.  This opinion is a good reminder that the rules apply to plaintiffs too and that the courts will not condone a “crusade to suppress the truth to gain a tactical advantage.”

On Monday, May 14, 2018, the Federal Communications Commission (“FCC”) issued a public notice seeking comment on interpretation of the Telephone Consumer Protection Act (“TCPA”) in light of the D.C. Circuit’s decision in ACA International v. FCC. The notice reflects an intent by the FCC to take up the proper interpretation of the TCPA promptly. Specifically, the FCC seeks comment on key areas of the TCPA, including:

  • How to interpret “capacity” in light of the D.C. Circuit’s decision in ACA, including the amount of user effort required to enable a device to function as an automatic telephone dialing system (“ATDS”);
  • The functions a device must be able to perform to qualify as an ATDS, including whether the word “automatic” envisions only non-manual dialing of telephone numbers;
  • How to treat reassigned wireless numbers and how to interpret the term “called party” for reassigned numbers, including whether the term refers to the person the caller expected to reach, the party the caller reasonably expected to reach, or the person actually reached;
  • Revocation of prior consent, including particular opt-out methods that would suffice to revoke consent;
  • The scope of the term “person” under the statute, and whether it includes federal government contractors; and
  • The appropriate limit for calls made to a reassigned number.

The initial comment period closes on June 13, 2018 and the reply comment period closes on June 28, 2018, meaning that the issues would be ripe for decision by the FCC in short order.

The ACA decision was immediately hailed by current FCC Chairman Ajit Pai, who said in a statement that the “unanimous D.C. Circuit decision addresses yet another example of the prior FCC’s disregard for the law and regulatory overreach. As the court explains, the agency’s 2015 ruling placed every American consumer with a smartphone at substantial risk of violating federal law. That’s why I dissented from the FCC’s misguided decision and am pleased that the D.C. Circuit too has rejected it.” Commissioners O’Rielly and Carr similarly praised the decision, giving Chairman Pai the necessary majority to effect major change in the TCPA landscape.

The call for comments also follows on the heels of a petition filed with the FCC by the U.S. Chamber of Commerce and 17 trade groups. The petition focused solely on the definition of an ATDS. Like the FCC’s request for comment, the petition tracks the language of the D.C. Circuit’s decision in ACA, where it struck down major portions of the FCC’s previous expansive interpretations of the TCPA, including its definition of an ATDS. While the FCC has taken the position for 15 years that a predictive dialer is an ATDS, the D.C. Circuit found that the 2015 Order and its predecessors do not give a clear answer as to whether a device qualifies as an ATDS only if it can generate random or sequential numbers for dialing. The U.S. Chamber petition urges the FCC to confirm that equipment must use a random or sequential number generator to store or produce numbers and dial those numbers without human intervention to qualify as an ATDS and to find that only calls made using actual ATDS capabilities are subject to the TCPA. Calling the ACA decision “an opportunity to restore rationality to . . . the TCPA,” the groups ask the Commission to issue a declaratory ruling as soon as possible to clarify the ATDS definition.

In sum, the groundwork is being laid at the FCC for a major change in interpretation of the TCPA, and the changes under consideration would substantially reduce the legal risks for companies using telephony to contact consumers.

Troutman Sanders LLP has unique industry-leading expertise with the TCPA, with experience gained trying TCPA cases to verdict and advising Fortune 500 companies regarding their compliance strategy. We will continue to monitor legislative developments and regulatory implementation of the TCPA in order to identify and advise on potential risks.

On May 3, the U.S. Chamber of Commerce and 17 trade groups filed a petition with the Federal Communications Commission for a declaratory ruling seeking a narrow definition of an automatic telephone dialing system, or “ATDS” – one of the key components of liability under the Telephone Consumer Protection Act.

The decision follows the D.C. Circuit’s landmark decision in ACA International v. FCC, which was largely seen as a major win for defendants in TCPA lawsuits, as the D.C. Circuit struck down key portions of the FCC’s previous expansive interpretations of the TCPA, including its definition of an ATDS.  In an opinion by Judge Sri Srinivasan, the court found the FCC’s interpretation, as announced in the 2015 Order, “utterly unreasonable” and lacking clarity.  The ruling also struck down long-standing TCPA rulings going back to 2003 on the issue of predictive dialers.  While the FCC has taken the position for 15 years that a predictive dialer is an ATDS, the D.C. Circuit found that the 2015 Order and its predecessors do not give a clear answer as to whether a device qualifies as an ATDS only if it can generate random or sequential numbers for dialing.

Joining the Chamber of Commerce petition are many members of the financial services industry, including ACA International, the American Bankers Association, the Mortgage Bankers Association, the Consumer Bankers Association, and the American Financial Services Association.  In the petition, the groups urge the FCC to confirm that equipment must use a random or sequential number generator to store or produce numbers and dial those numbers without human intervention to qualify as an ATDS and to find that only calls made using actual ATDS capabilities are subject to the TCPA.  Calling the ACA decision “an opportunity to restore rationality to . . . the TCPA,” the groups ask the Commission to issue a declaratory ruling as soon as possible to clarify the ATDS definition.

Troutman Sanders LLP has unique industry-leading expertise with the TCPA, with experience gained trying TCPA cases to verdict and advising Fortune 500 companies regarding their compliance strategy.  We will continue to monitor legislative developments and regulatory implementation of the TCPA in order to identify and advise on potential risks.

The District of Nevada recently applied the D.C. Circuit’s decision in ACA International v. FCC and granted summary judgment in favor of the defendant on plaintiff’s Telephone Consumer Protection Act claim.  Specifically, the Court held in Marshall v. The CBE Group, Inc. that CBE’s phone system does not qualify as an automatic telephone dialing system, commonly referred to as an “ATDS.”

Plaintiff Gretta Marshall filed suit against CBE, a third-party debt collector, alleging that it violated the TCPA and the Fair Debt Collection Practices Act through its collection efforts related to her outstanding bill.  Marshall alleged that CBE’s agents used an ATDS to contact her in violation of the TCPA.  CBE places calls using a Manual Clicker Application (“MCA”), requiring the call agent to click a bullseye on a computer screen to place a call.  When a CBE agent clicks the bullseye, a call is sent through a cloud-based connectivity pass-through, LiveVox, and then the CBE agent is connected with the person to whom the call is placed.

In analyzing CBE’s “communication infrastructure,” the Court stated that in light of the ACA v. FCC decision, it would apply the statutory language defining an ATDS, resulting in a focus on whether CBE’s phone equipment has the capacity to produce or store phone numbers to be called using a random or sequential number generator.  The Court noted that the overwhelming authority held that “point and click” dialing systems, used in unison with cloud-based pass-through services, did not qualify as ATDSs due to the human intervention required to place the call.  Applying this rationale, the Court found that CBE agents who were required to click the bullseye were “integral to initiating outbound calls.”  This finding weighed in favor of finding that the MCA, used with LiveVox, was not an ATDS.

Further, the Court dismissed Marshall’s allegations that LiveVox, the cloud-based pass-through, placed the calls and qualified as an ATDS.  Marshall argued that because LiveVox could perform call progress analysis (such as maintaining call logs), it actually initiated the call, not CBE.  Ultimately, the Court found that Marshall had not presented any evidence or legal authority sufficient to create a genuine dispute of material fact as to LiveVox’s alleged qualification as an ATDS.  Specifically, Marshall did not show that LiveVox’s ability to track calling information meant that LiveVox has the capacity to produce or store telephone numbers to be called, using a random or sequential number generator, and to dial the numbers.

Given the human intervention necessary to place calls using MCA and Marshall’s failure to create a genuine dispute of material fact regarding LiveVox’s role, the Court held that CBE did not use an ATDS to place calls to Marshall.

The District of Nevada is one of the first courts to apply the decision from ACA International v. FCC when interpreting the definition of an ATDS.  The decision in Marshall v. CBE indicates that courts will be able to simplify their analysis of whether a telephone system qualifies as an ATDS under the TCPA by eliminating the need to determine “potential functionalities” of a calling system and instead focusing on the calling systems’ “capacity to store or produce telephone numbers to be called, using a random or sequential number generator.”

Please join us on Tuesday, April 17th from 2:00 – 3:00 PM ET for a complimentary webinar with speakers Chad Fuller, David Gettings, Alan Wingfield and Virginia Bell Flynn.

So often the defense of consumer class actions focuses on the substance of the law. Was my consumer report accurate? Was my collection letter misleading or deceptive? Did I have consent to place a call using an ATDS?

Please join Troutman lawyers for a discussion of some recent developments in procedure that could be game-changers. These are legal developments that do not turn on the substance of the claim, but could raise effective defenses if used appropriately. We will discuss the impact the Bristol-Myers Squibb decision has had on personal jurisdiction in nationwide class actions, the tolling effect of pending class actions on future lawsuits, and the impact of Spokeo arguments in practice. For good measure, we will also discuss the impact that the D.C. Circuit’s landmark ruling in ACA v. FCC has had on Telephone Consumer Protection Act individual lawsuits and class actions in the first month since the decision.

Click here to register.

On March 12, Judge Eldon E. Fallon of the U.S. District Court for the Eastern District of Louisiana tossed a plaintiff’s putative class action lawsuit against the American Heart Association (“AHA”), Anthem Foundation, Inc., and Anthem, Inc. under the Telephone Consumer Protection Act relating to text messages sent to a consumer following her attendance at a CPR training course. This decision provides some additional clarity for health care companies in distinguishing between informational and telemarketing outreach under the TCPA.

The underlying facts are straightforward. The plaintiff attended a CPR training event and provided her cellular telephone number to the AHA to receive content including “monthly CPR reminders” and “healthy messaging information.” She subsequently received “more than 20 text messages” from AHA, such as “AHA/Anthem Foundation: Memorize your work address. You may need to recite it to a dispatcher should you have to call 9-1-1 from the office.” Each of the roughly two dozen text message included “AHA/Anthem Foundation” at the beginning of the message. Although the text messages generally provided health-related informational content, one text message provided a link to the AHA’s website to find available CPR courses in a specific geographic area—some of which were free, and others available for a fee.

The plaintiff’s theories of liability were that (1) the messages were telemarketing, and thus the prior express consent she provided to AHA was not sufficient for the at-issue text messages; (2) nonprofit Anthem Foundation was vicariously liable for text messages sent by AHA because “Anthem Foundation” was included in the body of the message; and (3) Anthem, Inc. was vicariously liable because the inclusion of Anthem Foundation in the text messages was a “purely commercial plug” of its corporate parent. The defendants jointly moved to dismiss the complaint, claiming that the consent provided to AHA was sufficient for the whole of the communications with the plaintiff, and submitted the entire text-message log between the plaintiff and AHA.

The lawsuit attempted to broaden the TCPA in two key ways: (1) expanding vicarious liability to brands allegedly affiliated with the communications, and (2) applying the TCPA’s prior express written consent standard for telemarketing to text messages providing information about local CPR classes—neither of which Judge Fallon was willing to indulge. On the vicarious liability point, the Court found that “although the text messages reference Anthem Foundation, this is irrelevant because the sender was, in fact, AHA.” The Court further noted the lack of any authority suggesting that “a nonprofit’s association with a donor or another charitable entity—i.e., Anthem Foundation—gives rise to a TCPA claim when she voluntarily sought to receive certain communications and information.”

As to the content of the messages, Judge Fallon examined the text message relating to CPR courses, which contained a link to a search function allowing users to find nearby classes. The Court visited the link and provided screenshots of the website in its ruling. It observed that “[t]o sign up for a CPR class—whether for-pay or free—a visitor must click on one of the providers, in which the [visitor] is taken to the provider’s Website.” The Court wrote, “[I]n this case, common sense tells the Court that the information in which Plaintiff labels as ‘commercial’ is undoubtedly informational. Defendants AHA and Anthem Foundation provide individuals with a public resource to seek CPR training. This resource is the type of communications Plaintiff wanted and signed up to receive: information about CPR and healthy living. Her complaint is thus unwarranted.”

With this dismissal and others like it, health care companies can be heartened that multiple courts have taken a “common sense” approach interpreting the TCPA to permit beneficial, health-related outreach to their members and consumers. However, this area of law remains murky, and thus companies are reminded of the importance of maintaining accurate records to minimize litigation risks.

The defendants were jointly represented by Covert J. Geary of Jones Walker LLP in New Orleans, Louisiana. Anthem Foundation, Inc. and Anthem, Inc. were also represented by Chad R. Fuller, Virginia Bell Flynn, and Justin M. Brandt of Troutman Sanders LLP.