Consumer Finance Insights
January 3, 2019

Northern District of California Kicks TCPA Case Challenging Confirmatory Text Messages

On December 13, 2018, the Northern District of California granted summary judgment to a Telephone Consumer Protection Act (TCPA) defendant in a case involving confirmatory text messages. In Phan v. Agoda Company, No. 5:16-cv-07243 (N.D. Cal. Dec. 13, 2018), the plaintiff alleged that text messages he received from the defendant confirming his travel reservations violated the TCPA.  The Court rejected his argument that these messages constituted telemarketing.  Defendants facing TCPA suits should consider whether challenged communications were telemarketing or not, as different levels of consent apply to the two forms of communications.

The TCPA prohibits certain communications, including where an automatic telephone dialing system (ATDS) is used to place calls or to send text messages to an individual without consent.  However, the level of consent required for such communications depends on whether the communication is telemarketing or not.  For telemarketing communications, consent must be written and meet several other regulatory requirements.  For non-telemarketing communications, consent need not be written and can be provided in a number of circumstantial ways.  So, for example, courts have concluded that loan servicers whose customers provide their cellphone numbers have consent for non-telemarketing communications to those customers.

In Phan, the plaintiff booked travel through the defendant’s website and received a text message from the defendant after each booking.  The text messages confirmed receipt of the plaintiff’s bookings and prompted him to use the defendant’s app to manage his bookings.  Plaintiff argued that the text messages were telemarketing because they referenced defendant’s app and encouraged him to download it.  The Court rejected this argument for a couple of reasons.  First, the plaintiff was able to change his booking through the end of his travel and was able to do so through the defendant’s app.  The Court explained that this meant that the link to the app was related to the parties’ transactional relationship and were not made for telemarketing purposes.  Second, the Court found that the language of the text message showed that its purpose was to confirm the plaintiff’s reservation and provide an avenue for changes, not to advertise.

Defendants facing TCPA claims should consider whether challenged communications are telemarketing or not.  Often, plaintiffs merely assume that each communication connected in any way to a product or service is a telemarketing communication.  But as Phan shows, that is not the case.

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