District Court (Cal.) Levels Some Sanity on TCPA Cases; Grants Summary Judgment to TCPA Defendant against Text-Message Plaintiff Who Provided Cell Phone Number as part of Subscription for Services

In Roberts v. PayPal, Inc., 2013 WL 2384242 (N.D.Cal. 2013), Judge Hamilton granted summary judgment to a TCPA defendant who was sued for sending a text message to a Plaintiff who had provided the cell phone number to the defendant as part of using the defendant’s services.  What is interesting about this case is that the Court decided not to decide the matter on the sufficiency of the consents set forth in the subscriber agreement, but rather on (1) whether the Plaintiff provided the cellular telephone number to the Defendant, and (2) whether the subsequent contact by text message was related to the purposes for which the cellular telephone number originally was given.  The facts were as follows:

Plaintiff alleges that defendant PayPal sent an unsolicited text message to his cellular phone, and brings this suit on behalf of himself and a putative class of “all cellular telephone account holders owning a cellular telephone number to which a text message was sent advertising the commercial availability of PayPal’s property, goods, or services without the prior express invitation or permission to receive advertisements by text message.”  Plaintiff became a PayPal customer in September 2002, and agreed to PayPal’s user agreement, which, at the time, did not include any reference to phone calls placed by PayPal to its customers. Instead, the agreement stated that PayPal would only contact customers via email or via postings on the PayPal website. However, the user agreement did state that it “is subject to change by PayPal without prior notice (unless prior notice is required by law), by posting of the revised agreement on the PayPal website.” Plaintiff later accepted a revised agreement on May 3, 2003, which still did not make reference to phone contact, but which again allowed PayPal to amend the agreement by posting the amended terms on its web-site. ¶  On November 10, 2008, PayPal changed the terms of its user agreement so that it could contact its customers by phone. Specifically, the amended terms read:  Calls to You. By providing PayPal a telephone number (including a wireless/cellular telephone), you consent to receiving autodialed and prerecorded message calls from PayPal at that number. Soon after, on December 8, 2010, plaintiff accessed his account to send a payment. On the same day, plaintiff added his cell phone number to his ac-count. Plaintiff claims that he did not read the revised user agreement, which included the new “Calls to You” section. Immediately after providing his phone number, plaintiff received a text message, stating: PayPal: Welcome! To learn about PayPal Mobile services, visit m.paypal.com. To stop notifications, text STOP to 729725. For more info, text HELP to 729725 o 1/2 r call 1–888–221–1161. Msg and data rates may apply. 2/2  (Note: the “1/2” and “2/2” indicate that the message was split into two text messages, presumably because of length restrictions on plaintiff’s phone.)  This text message is the basis for plaintiff’s suit, which was filed on February 8, 2012, asserting one cause of action for violation of the TCPA.

Judge Hamilton granted summary judgment to the defendant, finding that the Plaintiff consented to receive the text message.

First, PayPal argues that plaintiff consented to receive text messages simply by providing his cell phone number to PayPal. PayPal notes that Congress has delegated to the FCC the authority to “prescribe regulations to implement the requirements of” the TCPA. 47 U.S.C. § 227(b)(2). The FCC has issued rules and regulations regarding the issue of “prior express consent,” stating that “persons who knowingly release their phone numbers have in effect given their invitations or permission to be called at the number which they have given, absent instructions to the contrary.” See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 7 F .C.C.R. 8752, 8769 (Oct. 16, 1992). PayPal has not identified any Ninth Circuit cases adopting this particular section of the 1992 FCC report, but does cite to the Ninth Circuit’s recent decision in Meyer v. Portfolio Recovery Associates, LLC, in which the court relied on a different FCC report in interpreting the TCPA’s “prior express consent” provision. 707 F.3d 1036, 1042 (9th Cir.2012).  . . . ¶  . . . The court does find the reasoning of Pinkard persuasive, and adopts it here. In particular, the court finds that Pinkard correctly applied the Ninth Circuit’s Satterfield decision in reaching its conclusion. In Satterfield, the plaintiff provided her cell phone number to a company called Nextones (which was not a defendant in that case) in order to receive a free ringtone. 569 F.3d at 949. The plaintiff then received a text message from defendant Simon & Schuster, which had obtained a list of Nextones subscribers. Id. The court held that “Satterfield had solely consented to receiving promotional material from Nextones or their affiliates and brands,” and that her consent “cannot be read as consenting to the receipt of Simon & Schuster’s promotional material.” Id. at 955. Thus, the Satterfield court found that there was no “prior express consent” as to Simon & Schuster, and reversed the district court’s grant of summary judgment in defendant’s favor. Id. at 956. The Pinkard court, in applying Satterfield, found that it “actually hinders, rather than helps, plaintiff,” because “[u]nlike Ms. Satterfield, plaintiff in this case sued the party to whom she gave her telephone number.” 2012 WL 5511039 at *5. “And in that situation, the Satterfield court explicitly found that express consent existed.” Id. ¶  In this case, the court similarly finds that the holding of Satterfield is distinguishable. First, as in Pinkard, the plaintiff provided his cell phone number to defendant, and then received a text message from defendant (and not a third-party). Second, unlike Satterfield, the content of the complained-about text message is closely related to the circumstances under which plaintiff provided his cell phone number. The Satterfield plaintiff provided her cell phone number to Nextones in order to receive a free ringtone, and then received a text message from a completely different company (Simon & Schuster) regarding a completely different subject (a Stephen King novel). In contrast, the plaintiff in this case provided his cell phone number in order to receive information regarding PayPal’s mobile services (as plaintiff’s counsel stated at the hearing), and then received a text message regarding PayPal’s mobile services. Thus, even if the court were to narrowly construe the scope of plaintiff’s “prior express consent,” the text message at issue would fall within the scope of that consent. For these reasons, the court finds that plaintiff did give his prior express consent to receive the text message at issue, and GRANTS summary judgment in favor of defendant.

Judge Hamilton felt no need to determine whether PayPal’s subscriber agreement provided consent, having found that merely providing the cell phone number (along with the text message being closely related to the purpose of providing the number) was sufficient.

Because the court finds that plaintiff consented to receive text messages from PayPal simply by providing his cell phone number, it need not (and does not) reach the merits of PayPal’s alternative argument, that plaintiff agreed to the PayPal user agreement and therefore provided prior express consent to receive text messages. However, the court notes that plaintiff expressly agreed to the user agreement on two occasions-when he first signed up for a PayPal account in September 2002, and again in response to a PayPal prompt in May 2003. However, it was not until November 2008 that the user agreement made clear that PayPal could contact its users by phone. PayPal argues that plaintiff consented to the 2008 version of the agreement simply by agreeing to prior versions of the agreement, which allowed PayPal to amend the agreement by posting the amended terms on its website. However, PayPal does not allege that plaintiff expressly consented to the 2008 version of the agreement, and does not allege that plaintiff was ever alerted to the existence of a revised agreement. Instead, PayPal takes the position that plaintiff had access to the revised agreement (which was available on PayPal’s website), and could have reviewed it before providing his cell phone number. However, the TCPA requires “prior express consent” to receive text messages, and the court is hesitant to find that plaintiff could have provided his consent through a revised user agreement of which he was never made aware. Thus, the court’s grant of summary judgment is made without reference to the PayPal user agreement, and is based only on plaintiff’s providing his number to PayPal.