The Northern District of California recently dismissed a plaintiff’s TCPA claim based on text messages that confirmed plaintiff’s hotel reservations and encouraged him to download defendant’s app.
The Ninth Circuit has sought clarification from the California Supreme Court on the issue of whether TCPA violations are covered by commercial general liability policies for unwarranted privacy intrusion violations.
Telemarketing or Transactional Texts?
The operative issue was whether the text messages were advertising or telemarketing, or whether they were merely transactional or informational. The court held that the messages were not telemarketing and that plaintiff provided consent for transactional messages.
In doing so, the court considered defendant’s argument that the texts were transactional because they merely confirmed plaintiff’s travel details and directed him to an app that allowed him to make modifications to an ongoing transaction. Plaintiff, on the other hand, took the position that the messages were advertising or telemarketing because the travel arrangements had been completed and the app permitted plaintiff to undertake new transactions.
The court rejected plaintiffs argument, in part, based upon analogous cases, the totality of the circumstances and the context. It found that the texts were, in fact, part of an “ongoing business transaction” because, until the time plaintiff completed his travel, he could modify his travel plans. Additionally, the court found that the plain language of the texts indicated the mere intent to confirm plaintiff’s travel plans and manage them via the app.
The court found unpersuasive plaintiff’s argument that the app could be used to engage in other commercial transactions. Importantly, the court considered a recent Ninth Circuit decision and that the texts contained “no content encouraging” the purchase of services. The mere inclusion of a link to the app, according to the court, “simply cannot be said to advertise the commercial availability of this product or service under the law.”
Although the decision has been appealed to the Ninth Circuit, it is a victory for telemarketers. Consult with an experienced FTC CID lawyer prior to engaging in a text message marketing campaigns to discuss legal issues relating to commercial, transactional and hybrid telemarketing messages.
The matter is Phan v. Agoda Co. Pte. Ltd. (N.D. Cal. Dec. 13, 2018).
Do CGL Policies for Privacy Violations Cover TCPA Claims?
The issue: Whether coverage in commercial general liability policies for violations of the right to privacy extend to unwanted intrusions, or is it limited to the dissemination of personal information to a third-party?
The U.S. Court of Appeals for the Ninth Circuit has requested clarification of this issue from the California Supreme Court in the case of Yahoo Inc. v. National Union Fire Insurance Company of Pittsburgh, PA. The decision and manner in which insurance policies are interpreted under California law will significantly impact Telephone Consumer Protection Act litigation.
Two California appeals courts have reached different conclusions on this issue.
The Yahoo case involves multiple putative TCPA class actions against Yahoo for the alleged transmission of unsolicited text messages in violation of the TCPA. None of them contain allegations that confidential information was disclosed.
When Yahoo’s request for coverage was denied, it filed a breach of contract action in federal court against its insurer. The court decided that Yahoo’s CGL policy did not extend to the TCPA actions and granted defendant’s motion to dismiss.
As a general rule, the right of privacy encompasses a right to be free from unwanted intrusions (a/k/a seclusion) and a right to maintain personal information confidential (a/k/a right to secrecy). California law is presently unclear whether CGL coverage applies to seclusion-based injuries where no private information is disseminated.
The Ninth Circuit justices noted that the question was submitted due to its significance with respect to TCPA claims against insureds and large liability exposure in such telemarketing cases.
If you are interested in learning more about these topics, implementing preventative telemarketing compliance protocols, or if you would like to discuss how to defend a TCPA lawsuit, please email the author at firstname.lastname@example.org.
Richard B. Newman is an Internet marketing attorney at Hinch Newman LLP.
Informational purposes only. Not legal advice. Previous case results do not guarantee similar future result. Attorney advertising.