Antitrust Law Daily Wrap Up, TOP STORY—9th Cir: Best Buy’s Reward Zone Robocalls to Customer Could Be Illegal Solicitations, (Oct 18, 2012)

By E. Darius Sturmer, J.D.

A series of automated telephone calls placed by Best Buy to the home of a customer allegedly enrolled in its Reward Zone loyalty program could have constituted violations of the Telephone Consumer Protection Act (TCPA) of 1991 and the Washington Automatic Dialing and Announcing Device Act (WADAD), the U.S. Court of Appeals in San Francisco has ruled. A district court’s granting of summary judgment in Best Buy’s favor was therefore reversed, and the matter was remanded for further proceedings. (Chesbro v. Best Buy Stores, L.P., October 17, 2012, Noonan, J.).

The parties disputed whether the customer had enrolled in the program. Best Buy maintained that his enrollment subjected him to a privacy policy that authorized it to contact him with program-related communications. The calls at issue were robot-calls urging the listener to redeem his Reward Zone points, directing him to a website where he could further engage with the program, and thanking him for shopping at the store.

The calls to the customer were not exempt from the provisions of the TCPA that made it unlawful “to initiate any call . . . using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party,” the court decided. While the Federal Communications Commission exempted from the general prohibition on automated commercial calls those that both did not include an unsolicited advertisement or constitute a telephone solicitation and did not adversely affect the privacy rights of a called party, it had determined that so-called dual purpose calls—those with both a customer service or informational component and a marketing component were illegal.

The calls at issue demonstrated a prohibited advertising purpose. Because the calls served no other point than to encourage recipients to engage in future purchasing activity at the store, they constituted telemarketing under the do-not-call regulation.

Given that the customer had repeatedly and expressed asked not to be contacted, any assertion that he had either consented to receiving them or that the communications were not unsolicited was unpersuasive, the court added.

As the text of the WADAD was substantially similar to its federal counterpart, the same reasoning applied to the consumer’s state law claim against the chain. A WADAD violation, the court noted, was automatically a violation of the Washington Consumer Protection Act (WCPA), as well. Thus, the calls at issue also violated the WADAD’s prohibition on automated solicitation, the WCPA, and Washington’s do-not-call provision, the court’ concluded.

The case is No. 11-35784.

Kimberlee Gunning (Terrell Marshall Daudt & Willie PLLC) for the plaintiff-appellant. Anne M. Lockyer for the defendant-appellee.

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