Antitrust Law Daily Wrap Up, PRIVACY—SDCal: Text Message Recipients Failed to State Telephone Consumer Protection Act Claims, (Jun 17, 2013)

By Peter Reap, J.D., LL.M.

Two individuals, Joshua Friedman and Ryan Kerzner, who allegedly received spam advertisements and/or promotional offers via text message, failed to state valid claims on behalf of a purported class under the Telephone Consumer Protection Act (TCPA) against Massage Envy Franchising, Massage Envy’s franchisees located in in Sherman Oaks and Encino California, and M6 Marketing, Inc., the federal district court in San Diego has decided (Freidman v. Massage Envy Franchising, LCC, June 13, 2013, Lorenz, M.). The claims were dismissed with leave to amend.

Background. In November 2012, Friedman alleges that the defendants began using his cellular telephone in order to send him spam advertisements and/or promotional offers, via text message. Friedman believes that the text messages he received in November and December 2012, originated from defendant M6 at the instruction of the other defendants, thus making the other defendants all liable for M6's actions. He asserts that these text messages were placed using an “automatic telephone dialing system,” (ATDS) and he never contacted nor conducted any business with the defendants to warrant such communications.

Kerzner alleges that on November 19, 2012, he received a text message that was similar to the one Friedman had received from the defendants. Kerzner received another text message on November 23, 2012, with a similar promotion, which he also claims is from the defendants. He replied to the defendants with the word “Stop” and then with a second reply message reading “Remove me.” M6 sent another text message in response, stating “I am sorry, we did not understand your last message. Help? Reply HELP. Quit?” Kerzner alleges that these messages originated from M6 at the direction of the defendants, and that he has never contacted nor conducted business with the defendants. Further, Kerzner alleges that the text messages were sent using an ATDS. Both plaintiffs claim that they have never given consent to receive unsolicited text messages, nor were the text messages considered to be for emergency purposes.

Telephone Consumer Protection Act

The TCPA prohibits “persons” from (1) making “any call,” (2) “using any automatic telephone dialing system or artificial or prerecorded voice,” (3) “to any telephone number assigned to a . . . cellular telephone service . . . .” 47 U.S.C. § 227(b)(1)(A). The Ninth Circuit has held that a text message is a call within the meaning of the TCPA.

Although both plaintiffs alleged that the texts that they received “were placed via an ‘automatic telephone dialing system,’ (‘ATDS’) as defined by 47 U.S.C. § 227(a)(1) as prohibited by 47 U.S.C. § 227(b)(1)(A),” their allegations were nothing more than a “formulaic recitation of the elements of a cause of action,” and did nothing more than assert a speculation, the court ruled. Twolmbly, 550 U.S. at 555, 570.

The text messages were generic and impersonal, but that was not enough to make the claims plausible, according to the court. It was just as conceivable that the text messages were done by hand, or not using an ATDS. The text messages that the plaintiffs present were similar in content, but differed enough to make it appear as if an ATDS was not utilized. Furthermore, in their Opposition, Plaintiffs did no more than restate allegations in the complaint, with the addition of textual emphasis to certain words and phrases. The plaintiffs also ignored the Twombly/Iqbal standard and implored the Court to follow overruled and outdated precedence. That, the court declined to do, it stated.

The cases cited by the plaintiffs contained more detail suggesting that an ATDS was utilized, the court noted. Here, the Plaintiffs simply asserted that the text messages they received were impersonal, without additional factual details. Simply stating that their complaint is “specific and detailed” and restating its exact language was insufficient to meet the applicable pleading standards.

In addition, Franchising argued that it could not be held liable under the TCPA because it did not actually send the unsolicited text messages to the plaintiffs. It contended that rote recitation of conclusory language intended to establish a relationship between Franchising and M6 was not enough to show an agency relationship under California Civil Code § 2295. The court agreed.

To sufficiently plead an agency relationship, a plaintiff must allege facts demonstrating the principal’s control over its agent. Under California Civil Code § 2295, the facts must show: (1) that the agent or apparent agent holds power to alter legal relations between principal and third persons and between principal and himself; (2) that the agent is a fiduciary with respect to matters within scope of agency; and (3) that the principal has right to control conduct of agent with respect to matters entrusted to him.

Absent from the complaint were facts that could demonstrate the three factors above that could raise the allegations beyond the speculative, the court held. The plaintiffs did not sufficiently plead an agency relationship between M6 and Franchising, and therefore, they could not assert a claim under the TCPA against Franchising under that specific theory.

The plaintiffs contended that if Franchising was not considered to be an agent of M6, then as a beneficiary of M6's actions, it was still directly liable under the TCPA. This argument strained credulity, as nothing in the language of the TCPA or case law suggested that this was accurate, the court explained.

The TCPA states that it is unlawful for any person “to make any call . . . to any telephone number assigned to [ ] a cellular telephone service . . .” 47 U.S.C. § 227(b)(1)(A). The plain language of the statute suggested that civil liability was assigned to any party who “makes” a call. There was nothing suggesting a broader standard of liability as the plaintiffs asserted. Thus, the court declined to extend liability under the TCPA to any beneficiary of the alleged unlawful actions.

Even if it could be liable under the TCPA, the plaintiffs did not allege sufficient facts to have Article III standing to sue Franchising, the court ruled. To satisfy Article III, a party must show that (1) it has suffered an injury in fact that is concrete and particularized and actual or imminent; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely as opposed to merely speculative, that the injury will be redressed by a favorable decision.

The plaintiffs must show a causal relationship between M6 sending the text messages, and the actions of Franchising in order to establish the second element. As noted, the plaintiffs failed to sufficiently allege an agency relationship that would in turn infer direct or vicarious liability. Accordingly, the plaintiffs did not allege facts sufficient to establish that they have standing to pursue a TCPA claim against Franchising.

M6 also moved to dismiss Kerzner’s TCPA claim regarding the second “confirmatory” text message. M6 argued that the text did not subject it to liability under the TCPA because it was sent in response to two of Kerzner’s text messages.

Common sense dictated that Kerzner’s TCPA claims for the text message that M6 sent in response were not actionable, the court determined. Given the simultaneous text messages that Kerzner sent, it is understandable that M6 would send a text message seeking clarification. Furthermore, courts recognized that not every single call constituted a TCPA offense. One message seeking clarification was not a “proliferation of intrusive, nuisance calls” that the TCPA sought to prevent.

The case is Civil No. 3:12-cv-02962-L-RBB.

Attorneys: Todd M. Friedman for Joshua Friedman. Christopher James Beal (DLA Piper US LLP) for Massage Envy Franchising, LLC.

Companies: Massage Envy Franchising, LLC; M6 Marketing, Inc.

Cases: Privacy FranchisingDistribution CaliforniaNews