Antitrust Law Daily Wrap Up, PRIVACY—W.D. Wash.: Consumer proceeds with claims Papa Murphy’s violated TCPA, (Jan 7, 2016)

By Michael Menzhuber, J.D., LL.M.

Papa Murphy’s motion for summary judgment, to dismiss a putative class action claim that it violated the Telephone Consumer Protection Act (TCPA) by sending text messages without obtaining “prior express written consent” as required by the Federal Communication Commission’s (FCC’s) 2012 Order, was denied by the federal district court in Tacoma, Washington. However, Papa Murphy’s motion to stay the proceeding, pending the Supreme Court’s decision in Spokeo, Inc. v. Robbins (Dkt. 13-1339), was granted (Lennartson v. Papa Murphy’s Holdings, Inc., January 5, 2016, Leighton, R.).

In 1992, the FCC ruled that, absent instructions to the contrary, persons who knowingly released their phone numbers consented to be autodialed. In February of 2012, this ruling was revised to require certain prior express written consent requirements. Those who had obtained consent under the 1992 Order were given until October 16, 2013, to comply with these new requirements.

In July of 2015, the FCC, in response to a petition, reiterated that written consent, obtained in congruence with the 1992 Order, was not compliant unless it met the definitional requirements of “prior express written consent” outlined in the 2012 Order. However, because it determined that petitioners could have reasonably interpreted its 2012 Order to suggest that prior written consent would remain valid even if it did not satisfy the 2012 Order, the FCC granted the petitioners a waiver and 89 days to obtain the proper consent.

In March of 2012, John Lennartson registered through Papa Murphy’s Holdings, Inc.’s (Papa Murphy’s) website to receive promotional text messages. After registering, he was texted at least eleven times and did not reply “stop” to any of these messages. Subsequently, Lennartson filed a class action lawsuit claiming that Papa Murphy’s violated the TCPA by text messaging him and other alleged putative class members, without adequate prior express written consent.

Papa Murphy’s filed a motion for summary judgment on the grounds that it obtained proper prior consent and that the FCC’s 2012 interpretation of the TCPA was unconstitutional. Alternatively, Papa Murphy’s asked for a stay of the proceedings until the Supreme Court reached a decision in Spokeo on whether Congress may confer Article III standing upon plaintiffs who suffer no concrete harm by authorizing private rights of action for bare violations of a federal statute.

Papa Murphy’s argued that it should not be penalized for its noncompliance with the 2012 order because: (1) under its interpretation of the rule, the prior express consent it obtained under the 1992 Order was valid because it was in writing, and the FCC conceded that its 2012 Order could have been reasonably interpreted that way; and (2) the 2015 Order represents an adjudicatory restatement that the court could not apply because its consent requirements caused a significant change in the law.

The court, however, agreed with Lennartson that: (1) the 2012 Order did not grandfather existing written consents that did not meet the definitional requirements of “prior express written consent”; and (2) the 2015 Order could be applied retroactively because it clarified, rather than changed, an existing rule. The court also noted that the “prior express written consent” requirements were first articulated in the 2012 Order and if Papa Murphy’s was confused by the order, it could have petitioned the FCC for relief.

The court determined that it lacked jurisdiction to assess the validity of the FCC’s 2012 Order, as requested by Papa Murphy’s, because the appellate courts have exclusive jurisdiction to make this assessment. Consequently, it denied Papa Murphy’s motion for summary judgment on constitutional grounds.

The court, however, did grant Papa Murphy’s motion to stay the proceedings, pending the Supreme Court’s decision in Spokeo because: (1) it determined that the case was relevant; and (2) a decision in that case would have an effect on the class certification process in the present case.

The case is No. C15-5307 RBL.

Attorneys: June P. Hoidal (Zimmerman Reed LLP) for John Lennartson. Jeffrey B. DeGroot (DLA Piper US LLP) for Papa Murphy’s Holdings, Inc. and Papa Murphy’s International LLC.

Companies: Papa Murphy’s Holdings, Inc.; Papa Murphy’s International LLC

Cases: Privacy WashingtonNews