District Court (Ill.) Says Web Service was a Common Carrier Exempt from TCPA; Says Text Messages at Issue Were Not “Advertisements”

In Payton v. Kale Realty, LLC,  2016 WL 703869 (N.D. Ill. 2016), Judge Lefkow held that a web service was exempt from the TCPA.

Regardless of plaintiffs’ self-defeating argument, the undisputed facts establish that VoiceShot provides telecommunication services rather than information services. While plaintiff is correct that VoiceShot’s services include data storage to allow users to store contact lists and past messages on VoiceShot’s website, this does not automatically convert the telecommunications service to an information service. For example, broadband Internet services were once classified as information-services because “providers of wireline broadband Internet access service offer subscribers the ability to run a variety of applications that fit the definition of information services, including those that enable access to email and the ability to establish home pages.” In the Matter of Protecting and Promoting the Open Internet, 30 FCC Rcd. 5601 ¶ 323 (Mar. 12, 2015). But recently the Federal Communications Commission (FCC) determined that although broadband service providers “still provide various Internet applications, including e-mail, online storage, and customized homepages, in addition to newer services such as music streaming and instant messaging,” id. ¶ 347, broadband Internet access service is a telecommunications service. Id. ¶ 336. The FCC also found that a service provider with a processing function that converts data and “does not alter the information being transmitted, but rather enables the transmission of the information” is still a telecommunication service. Id. The FCC explained that functions that are incidental to an underlying telecommunications service that do not alter the information being transmitted but merely enable the transmission of the information are “adjunct-to-basic services,” which are telecommunication services. Id. Thus, although VoiceShot’s services provide the ability to store contact lists and convert messages into a format that a downstream carrier can understand, such functions “do[ ] not somehow convert the basic telecommunications service offering into an information service,” especially where the message sent by the subscriber is the same message received by the recipient.

The District Court went on to find that the sender of the text was exempt from the TCPA because the text sent was not an “advertisement”.

The FCC’s regulations define “advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services.” 47 C.F.R. § 64.1200(f)(1). “Whether a given call includes or introduces an ‘advertisement’ depends on the call’s content.” Dolemba v. Illinois Farmers Insurance Co., No. 15 C 463, 2015 WL 4727331, at *2 (N.D. Ill. Aug. 10, 2015) (citing Golan v. Veritas Entm’t, LLC, 788 F.3d 814, 820 (8th Cir. 2015)). For example, a call that seeks to hire individuals to sell a defendant’s products may constitute an advertisement “if the individuals called are encouraged to purchase, rent, or invest in property, goods, or service, during or after the call.” In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd. 14014, 14098–99 ¶ 142 (July 3, 2003). . .  Here, plaintiffs assert that defendants sent text message advertisements that were more than mere help-wanted postings.   In Dolemba, the plaintiff alleged that the defendant sent a prerecorded message inviting him to attend a “town hall call offering a business opportunity promoting the commercial availability of insurance, goods, intangibles and services.” Dolemba, 2015 WL 4627331, at *1. The plaintiff further alleged that the “business opportunity requires the new agent to acquire goods and services and expend money to [sic] or for the benefit of” Farmers. Id. There, the court found that “[t]he fact that the call informed Dolemba what he would be selling (‘insurance’), without more, does not make the call an advertisement.” Id. at *4. Accordingly, the court held that plaintiff had not adequately alleged that the call he received included or introduced an advertisement. Id.  To reach this conclusion, the court analogized to Friedman. In Friedman, the plaintiff alleged that the defendant sent a prerecorded message inviting him to contact the defendant “at a specific telephone number to attend a ‘recruiting webinar’…wherein [plaintiff] could learn about [defendant’s] products and services in order to sell said products and services to other Americans who are in need of health or similar insurance policies.” Friedman, 2013 WL 4102201, at *1. Individuals who completed the webinar received an email that “provide[d] the opportunity to enter into a contract with” the defendant, which contained fees the individual would have to pay to sell the defendant’s products, in exchange for which the defendant would supply client lists. Id. In Friedman, the court held that the call offered the plaintiff the opportunity to “enter into an independent contractor relationship,” and was “not part of an overall marketing campaign to sell access to a customer database.” Id. at *5. The court explained that “the mere fact that after an individual enters into an independent contractor relationship with Defendant and the individual may choose to purchase the ‘Turning 65’ list does not mean that Defendant’s message was advertising the commercial availability of goods and services.” Id. As such, the court there dismissed the TCPA claims against defendants.  Here, the text message Payton received, read, in its entirety, “Kale Realty named 2013 Top 100 Places to Work by Tribune – We pay 100% on sales – Reply or visit http://joinkale.com to learn more! Rply 68 to unsubscribe.” (Dkt. 151 at 4; Id. Tab 8.) As Kale points out, because there is no reference to the sale of goods or services in Kale’s text to Payton, plaintiff has to delve into the details of how the employment for Kale agents works and in doing so assert that Kale is selling their agents something. Kale admits that it does not hire real estate agents as employees but, rather, as “independent contractors who are sponsored by Kale.” (Dkt. 154 ¶ 2– 3.)