Trying to reach consumers where they are – i.e., on their phones? Think twice. A decision earlier this month from the Northern District of Illinois is an important cautionary tale for companies sending marketing text messages. Ralph Lauren Corporation and Ralph Lauren Retail, Inc., ( “Ralph Lauren”), and the marketing company Ralph Lauren uses, Vibes Media, LLC learned a tough lesson, with the court refusing to dismiss plaintiff Patrick Hudson’s amended complaint.
In that case, Hudson filed a putative Telephone Consumer Protection Act (“TCPA”) class action suit against Ralph Lauren and Vibes after allegedly receiving 188 text messages from them. In his amended complaint, Hudson claimed that the defendants violated the TCPA by “sending him text messages using an Automatic Telephone Dialing System (“ATDS”) without his express consent.” They also ran afoul of the law, according to Hudson, “by failing to include opt-out instructions in each message.”
The facts are where this case is somewhat interesting. The initial text message that Hudson received contained the following message: “PoloFactoryStores: Reply Y to get automated offers & ads. Consent is not a condition of purchase. Up to 6 alert msgs/mo.Msg&DataRatesMayApply. Rply STOP to end.”
Hudson replied “Y,” and so, the defendants went on to send him more than the promised “6 alert msgs/mo.” In fact, he claims that he received at least 32 text messages over the six alerts per month amount that he had originally consented to. Further, he claimed that 80 percent of texts he received from the defendants did not include any opt-out instructions.
In their motion to dismiss, Ralph Lauren and Vibes argued that Hudson pled himself out of a TCPA claim because he admitted in his amended complaint that he provided them with prior express consent to receive the text messages at issue. Hudson countered,” The defendants exceeded the scope of his consent by sending him more than six texts in certain months, despite his express agreement to only receive” up to six messages per month.
In deciding on Ralph Lauren’s motion to dismiss, the court addressed the issue of consent first, stating that the “scope of consent must be determined upon the facts of each situation.” While Ralph Lauren and Vibes argued that the wording of the initial text message did not limit Hudson’s consent, the court noted that they did not cite to any law for support.
In fact, the court found that there is at least one case that stands for the exact opposite point the defendants argued for—a case wherein the defendant was found to have exceeded the scope of Hudson’s consent because he agreed to receive up to three text messages per week and the defendant sent more than three text messages to the plaintiff over two separate seven-day periods.
In light of that case, and because Hudson’s consent did “not preclude a finding that he did not consent to all the messages the defendants sent,” the court declined to dismiss his TCPA claim against Ralph Lauren and Vibes on the basis of prior express consent.
Next, the court turned its attention to the ATDS issue. Ralph Lauren and Vibes argued that Hudson “failed to plausibly allege that [they] used an ATDS to send text messages to his phone.” Against that background, the court first made two conclusions regarding the law surrounding the definition of an ATDS: (1) the U.S. Court of Appeals for the D.C. Circuit’s decision in ACA International v. FCC is binding on the court, and (2) the court will determine the proper definition of an ATDS in the first instance because several “courts in this district have concluded that ACA International invalidated both the 2003 and 2008 Orders [from the Federal Communications Commission] with respect to the ATDS definition.”
Next, the court acknowledged that the defendants argued for the court to adopt the ATDS definition adopted by the U.S. District Court for the Northern District of Illinois in Pinkus v. Sirius XM Radio. In that case, the court defined ATDS as having “the capacity to generate telephone phone numbers, either randomly or sequentially, and then to dial those numbers.” The court here ultimately found that, “even under the defendants’ proposed narrow definition of an ATDS,” the plaintiff’s allegations do not foreclose the use of an ATDS.
Specifically, the court noted that in the plaintiff’s amended complaint, he alleges that “the defendants used equipment with the ability to store or produce cellular telephone numbers to be called using a random or sequential number generator and to dial such numbers without human intervention,” as evidenced by “the high volume of text messages, the generic and impersonal nature of the messages, and the defendants’ use of an SMS code.” The court determined that those allegations sufficiently suggest the defendants’ use of an ATDS at the motion to dismiss stage.
Finally, the court addressed Hudson’s claim that the defendants’ “failure to include instructions on how to stop receiving Ralph Lauren advertisements in every text message that Defendants sent,” allegedly violated 47 U.S.C. § 227(c)(1) and 47 C.F.R. § 64.1200(b)(3).
The defendants argued that the opt-out requirements only apply to artificial or prerecorded voice messages. Ibid. The court agreed, holding that “because the plain language of § 64.1200(b)(3) encompasses only voice telephone messages and [the plaintiff] identifies no other basis for imposing an opt-out requirement with respect to every text message the defendants sent [the plaintiff], he cannot pursue a claim for violation of 47 U.S.C. § 227(c)(1) and 47 C.F.R. § 64.1200(b)(3) based on the lack of such information in each text message he received.”
So, what are the takeaways here? Well, first, if you are going to engage in a text message marketing campaign, stay within your advertised limits. That is to say that, if you state – like the defendants in Hudson did – that you will send the consumer up to six text messages per month, make sure that you are only sending up to, and no more than, six text messages per month to that consumer. Therefore, unless there is a clear reason to do so, companies should consider obtaining consumer’s consent to receive “recurring” text messages, rather than a specified number per month.
Additionally, and although the defendants in Hudson won on this issue, it cannot hurt to include opt-out instructions frequently. The CTIA guidelines require SMS campaigns to include “opt-out instructions at program opt-in and at regular intervals in content or service messages, at least once per month.” In the long run, it is preferable to make clear how customers can opt-out of marketing messages rather than get caught up in costly litigation.
*The case is Hudson v. Ralph Lauren Corp., 1:18-cv-04620 (N.D. Ill.).
Shane Micheil is an associate at Womble Bond Dickinson (US) LLP, who focuses his practice on commercial and financial services litigation.
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