Antitrust Law Daily Wrap Up, PRIVACY—N.D. Cal.: Oh Bebe, TCPA text messaging claims proceed, (Feb 5, 2015)

By Edward L. Puzzo, J.D.

A putative TCPA class action against Bebe Stores, based on its text messages to customers, alleged sufficient injury to provide standing, and alleged lack of consent, the use of an ATDS and knowledge and willfulness sufficient to state a claim, the federal district court in Oakland, California, has ruled (Meyer v. Bebe Stores, Inc., February 2, 2015, Rogers, Y.).

Melita Meyer alleged that she provided her cell phone number at a Bebe retail store when making a clothing return and purchase, believing it was required for that purpose. Soon thereafter she received an unsolicited promotional text message from Bebe. Meyer brought a putative class action, alleging that Bebe Stores’ use of text messages (also known as SMS messages) violated the Telephone Consumer Protection Act (TCPA). Bebe moved to dismiss the claims, based on a lack of standing and the failure to state a claim.

Standing. In response to the complaint, Bebe argued that Meyer had failed to allege injury-in-fact and therefore lacked Article III standing. Injury-in-fact was absent, Bebe argued, because Meyer’s only claimed injury was economic and she did not allege she incurred any carrier charges for the specific text message at issue. California’s Unfair Competition Law (UCL) does require economic injury for standing, the court stated, but the requirements for Article III standing are not as narrow. Instead the applicable standard is that of Smith v. Microsoft Corp. (Advertising Law Guide ¶64,809, S.D. Cal. July 20, 2012) which stated “that by alleging he received a text message in violation of the TCPA, [plaintiff] has established a particularized injury in satisfaction of Article III premised on the invasion of his privacy, even absent any economic harm.”) Thus, the court ruled, Meyer had alleged sufficient injury-in-fact for standing in this case.

Stating a claim. Bebe also argued that Meyer had failed to state a claim under the TCPA. One claimed basis for that position was that Meyer allegedly consented to receive the text message at issue. The court noted that, per Federal Communications Commission regulations (47 CFR Section 64.1200(a)(2)), after October 16, 2013, express consent for advertising or telemarketing messages must be in writing. The text message in question here occurred on December 10, 2013, and asked the recipient to opt into a list which would provide customers with 10 percent discounts on purchases. The court found that the pleadings established a plausible lack of express written consent for the post October 2013 text message at issue, and further plausibly established that the opt-in message, which contained both an informational component and a marketing component, was an advertisement sent for telemarketing purposes as the regulation defined those terms. Thus dismissal on the basis of consent was not appropriate, the court ruled.

A second basis for the assertion that Meyer had failed to state a claim was that she did not sufficiently allege Bebe’s use of an automatic telephone dialing system (ATDS) as required by the TCPA. The court noted that, contrary to Bebe’s assertion, the pleadings did allege the use of an ATDS with the capacity to store or produce and dial numbers randomly or sequentially. These allegations were sufficient at the pleading stage to meet this objection, the court ruled.

The basis for Bebe’s final argument that Meyer failed to state a claim under the TCPA was that, as to statutory damages, her allegation that Bebe’s TCPA violation was knowing or willful was bare and conclusory. At the pleading stage, such an allegation was sufficient, the court stated, citing Hashw v. Dep’t Stores Nat. Bank (986 F. Supp. 2d 1058, D. Minn. 2013). Thus, the court ruled that the claims could not be dismissed based upon a failure to state a claim.

The case is Civil Action No. 14-cv-00267-YGR.

Attorneys: Karen Emily Nakon (Strategic Legal Practices, APC) for Melita Meyer. Amy L. Pierce (Pillsbury Winthrop Shaw Pittman LLP) for Bebe Stores, Inc.

Companies: Bebe Stores, Inc.

Cases: Privacy CaliforniaNews