United States: District Court Confirms That Text Messages Completing Consumer-Initiated Transaction Are Not Telemarketing

Last Updated: July 25 2017
Article by Joseph C. Wylie II, Molly K. McGinley and Lexi D. Bond

A recent decision from the Western District of Washington, Noah Wick v. Twilio Inc., Case No. C16-00914RSL, resulted in dismissal of a putative class action lawsuit under the Telephone Consumer Protection Act, 47 U.S. Code § 227 ("TCPA"), against Twilio Inc. ("Twilio"), a cloud communications platform service company which allows software developers to programmatically make and receive phone calls and send and receive text messages using its platform. Although several of Twilio's arguments for dismissal were rejected, the court agreed with Twilio that the plaintiffs' claims should be dismissed because a text message sent to complete a customer-initiated transaction is not telemarketing and the customer in this instance had given prior express consent to be contacted by providing his mobile number to the sender.

The lead plaintiff in the case alleged that he received an unsolicited text message and phone call immediately after he attempted to obtain a free sample of a product on the website for a nutritional supplement company, in violation of the TCPA. Twilio moved to dismiss the claim on the grounds that Wick lacked standing and failed to state a plausible claim for relief. Although the court found that Wick had standing, it agreed that he did not state a plausible claim for relief and, accordingly, dismissed the case.

The court first considered Twilio's argument that Wick did not raise a plausible inference that the message he received was sent using an Automatic Telephone Dialing System ("ATDS"). Twilio argued that, even if its system were capable of bulk dialing, Wick did not allege that it could do so without human intervention because a third party drafted the message content, transmitted the target phone number, and decided when to send the message. The court disagreed, finding that Twilio's system had the potential ability to automatically send a pre-recorded message to thousands of numbers in a short period of time. The fact that a human was involved in Twilio's process did not "alter the plausible inference that Twilio's system has the capacity to dial numbers without the need for human intervention" and therefore is an ATDS.

Next, the court turned to Twilio's argument that Wick did not raise a plausible inference that Twilio initiated the text message or call. In analyzing this question, the court relied heavily on the FCC's 2015 Declaratory Ruling, 30 FCC Rcd. 7980, in which the FCC concluded that facts and circumstances of a particular call dictate whether entities that provide software applications or platforms that facilitate calling can be considered the "makers" or "initiators" of telephone calls under the TCPA, including: (1) who took the steps necessary to physically place the call; and (2) whether another person or entity was so involved in placing the call as to be deemed to have initiated it, considering the goals and purposes of the TCPA. With regard to text messages, Wick alleged that Twilio edits customer content, chooses the call time, call order and what number a message will be sent from, and fails to require its customers to certify that they are complying with the TCPA. Wick alleged the Twilio is aware that its platform is used to send messages that violate the TCPA and brags that its customers are able to spam mobile phones with its platform. Given these allegations, the court found it plausible that Twilio is an active participant in developing the message the recipient ultimately receives, controlling the initiation of the message, and allowing, if not promoting, unsolicited text message campaigns. However, the court did not find Wick's allegations sufficient to raise a plausible inference that the telephone call he received was initiated by Twilio. Wick merely alleged that a woman called him after he left the supplement website and requested his credit card information. Wick did not identify the caller's number or suggest any connection between it and Twilio, so the TCPA claim as to the phone call was insufficient.

Finally, the court turned to Twilio's argument that Wick consented to the communications at issue because he initiated an order on a website related to the text messages and calls he received. The complaint demonstrated that Wick entered his identifying information on the website, agreed to the terms and conditions, and clicked "Rush my Order" before closing the page. After initiating, but not completing, his order Wick received a text message reminding him that his order was incomplete and providing a web address at which to finish it. Before analyzing whether Wick's actions granted consent, the court first focused on the definition of telemarketing. The FCC defines telemarketing as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods or services, which is transmitted to any person." 47 C.F.R. § 64.1200(f)(12). Ninth Circuit precedent establishes that messages whose purpose is to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender are not advertisements. Aderhold v. car2go N.A. LLC, 668 Fed. Appx. 795, 796 (9th Cir. 2016). With that in mind, the court ruled that the text message Wick received did not constitute telemarketing. On these same facts the court concluded that Wick consented to the communications at issue when he submitted his telephone number as part of the ordering process. Thus, Wick failed to plead a TCPA violation, and the court granted Twilio's motion to dismiss.

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