Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—2d Cir.: Unsolicited text message class suit against Subway affirmed, (May 15, 2024)

By Kenneth H. Ryesky, M.B.A., J.D.

SMS text message complained of was sent and received before Telephone Consumer Protection Act had been amended by Congress to apply to SMS messaging.

The Second Circuit has affirmed dismissal of a putative class action complaint against fast food chain Subway for violations of the Telephone Consumer Protection Act. The complaint alleged that Subway violated the Act by having its subcontractor send unsolicited SMS text messages to classes of people who, under the act, should not have been recipients. The text messages sent were found to not contravene the Act because they did not entail an "automatic telephone dialing system" or an "artificial or prerecorded voice" as alleged in the complaint, and accordingly did not constitute violations as alleged in the complaint (Soliman v. Subway Franchisee Advertising Fund Trust, Ltd., No. 22-1726 (2d Cir. May 10, 2024)).

The availability of emerging technological developments facilitated the proliferation of automated unsolicited telephonic advertising (the so-called "junk telephone calls" or "junk calls"). In addition to the personal annoyance experienced by many recipients of such telephone calls, there were serious public safety issues caused by the recipients' telephone lines by not properly terminating the junk call, thereby commandeering the telephone line and leaving emergency service personnel, physicians, and others unable to promptly respond to urgent situations. To remedy such imperilments and inconveniences, Congress enacted the Telephone Consumer Protection Act of 1991 (TCPA).

The TCPA was amended several times following its initial enactment to keep pace with the technological developments and the legal issues they presented. One such line of technological developments widely availed cellphones to the public. Using the cellphone and its associated infrastructure, short message script technology (SMS) emerged and proliferated. Businesses quickly began to use SMS technology to advertise their wares and services in ways that were not clearly addressed by the TCPA, and some entrepreneurs set themselves up to purvey SMS advertising services to businesses in other product and service lines. Accordingly, in 2018, Congress again amended the TCPA to address SMS messaging.

On December 1, 2015, a woman in California who had received some SMS messages from or on behalf of a fast food purveyor (Subway) and who had not previously objected to those messages received an unsolicited SMS message from Subway advertising a special offer of a free bag of chips with any purchase from Subway. Per the instructions in the SMS, the woman requested Subway to discontinue sending her unsolicited SMS messages, and promptly received confirmation that she was unsubscribed and would receive no further SMS messaging. But on December 5, 2015, the woman received another SMS from Subway reminding her that the free bag of chips offer would expire the next day.

In 2019, the woman filed a putative class action lawsuit in federal district court in Connecticut alleging TCPA violations by (1) use of an "automatic telephone dialing system"; and (2) "artificial or prerecorded voice." The lawsuit sought statutory damages for class members under the private right of action provisions of TCPA. The district court granted Subway's motion to dismiss the action and the woman appealed to the Second Circuit.

Automated dialing system. The appellate court affirmed the district court's dismissal of the automated dialing system allegation. The relevant 36-word TCPA definition of "automatic telephone dialing system" uses the word "number" three times. The word "number" as used there refers to telephone numbers, and not to SMS numbers (although the telephone and SMS numbers of an individual are typically one and the same).

Artificial or prerecorded voice. The Second Circuit affirmed the district court's dismissal of the artificial or prerecorded voice allegation. At the time of the TCPA's enactment, the word "voice" was defined in the popular dictionaries (and continues to be so defined) as a sound made by humans (or other vertebrates) using laryngeal organs. While cell phones and other equipment typically emit a sound upon receipt of a SMS message, sound is not an integral part of the SMS text messages themselves. "Voice," whether natural or artificial, live or prerecorded, has no application to SMS messages.

The Case is No. 22-1726.

Judge: Chin, D.

Attorneys: Brenden P. Leydon (Wocl Leydon LLC) for Marina Soliman. Tomio B. Narita (Womble Bond Dickinson LLP) for Subway Franchisee Advertising Fund Trust, Ltd.

Companies: Subway Franchisee Advertising Fund Trust, Ltd.

Cases: Advertising ConsumerProtection ConnecticutNews NewYorkNews VermontNews