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From Antitrust Law Daily, May 5, 2017

Company not liable for marketer’s text flood because customers’ opt-in was consent

By E. Darius Sturmer, J.D.

Chicago-based apparel retailer Bijora, Inc., doing business as Akira, was not liable for allegedly willful and knowing violations of the Telephone Consumer Protection Act (TCPA), after the software company it hired to provide text marketing services sent approximately 60 text messages over a 20-month span to over 20,000 customers, the U.S. Court of Appeals in Chicago has ruled. While the trial court’s rationale in granting summary judgment to Akira—that the company had not, through its marketing vendor, used an autodialer to send the promotional text messages in question—may have been erroneous, summary judgment was nevertheless appropriate because the complaining consumer had effectively consented to the texts, the appellate court determined. Summary judgment was therefore affirmed (Blow v. Bijora, Inc., May 4, 2017, Rovner, I.).

The complaining consumer brought the claims on behalf of all of the more than 20,000 customers who had signed up for Akira’s "Text Club" in one of the company’s Chicago-area stores. Alleging that Akira had violated the TCPA’S prohibition against using an automatic telephone dialing system to make calls without the express consent of the recipient, the consumer sought $1.8 billion on behalf of the class--$1,500 for each of the 1,200,000 texts the marketer sent between September 2009 and May 2011 advertising store promotions, parties, events, contests, sales, and giveaways. The district court granted summary judgment against the claims on the basis that the software platform relied upon by the marketer did not constitute an autodialer.

Use of "autodialer." The appellate court pushed aside the question of whether the process employed by the marketer fit within the Federal Communications Commission’s expansive interpretation of an autodialer as "premature."

The appellate court also rejected an argument that Akira "admitted" in the district court to using an autodialer. That dispute arose, the court explained, from Akira’s response to a request for admission by the consumer, in which it neglected to explicitly contest an autodialer use contention contained in four nearly identical requests submitted by the consumer. The district court had reasonably concluded, after considering the entirety of the litigation and the discovery responses surrounding Akira’s supposed admission, that Akira had inadvertently failed to add the phrase "except unknown if [the marketer] used an ‘AutoDialer’" in its response, in the appellate court’s view. Calling it "unreasonable" for the consumer to believe the omission to have been an admission by Akira, the appellate court decided that the lower court did not abuse its discretion in allowing Akira leave to amend its pleading to correct the mistake.

Consent to text messages. Irrespective of the autodialer question, independent grounds existed for summary judgment because the consumer had consented to the text messages, the appellate court held. The record demonstrated that she gave her cell phone number to Akira on several different occasions, and that several of the texts she subsequently received contained instructions as to how to unsubscribe, which she uniformly ignored.

The court discredited the consumer’s contention that she never consented to Akira’s texts because she "provided her phone number … to receive discounts" but not to receive "mass marketing text messages," unpersuaded that a legal distinction existed between the two. The attempt to parse her consent to accept some promotional information from Akira while rejecting "mass marketing" texts construes consent too narrowly, the appellate court stated, agreeing with the Ninth Circuit’s recent ruling in Van Patten v. Vertical Fitness Group, 847 F.3d 1037 (2017), that "an effective consent is one that relates to the same subject matter as is covered by the challenged calls or text messages." It was reasonable to conclude that if the contact was related to the reason the number was provided, consent was valid. In the instant case, the texts were clearly related to the promotional purposes for which the consumer had provided her cell phone number.

Cross-appeal, sanctions. Akira’s challenges to the district court’s granting of class certification and denial of sanctions were also repudiated by the appellate court. No abuse of discretion could be found in the lower court’s conclusion that the commonality requirement for class certification—the only certification element challenged by Akira—was satisfied because the class members’ claims arose from the same factual circumstances and were being evaluated under the same statute.

Moreover, the conduct of the consumer’s counsel in pressing the claims in the litigation did not rise to the level of impropriety that would justify sanctions, the appellate court said. Although it ultimately rejected the consumer’s claim that her consent did not extend to the various types of texts she received, the appellate court "would not go so far as to conclude that her position was so baseless as to warrant sanctions."

The cases are Nos. 16-1484 and 16-1608.

Attorneys: Dana Perminas (Messer, Stilp & Strickler, Ltd.) for Nicole Blow. James K. Borcia (Tressler LLP) for Bijora, Inc. d/b/a Akira.

Companies: Bijora, Inc.

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