Class Action Defense Cases-Satterfield v. Simon & Schuster: Ninth Circuit Reverses Defense Summary Judgment In Class Action Holding Text Message Is A “Call” Under TCPA And Triable Issues Exist As To Class Action Plaintiff’s Consent To Receive Text Message

Jul 13, 2009 | By: Michael J. Hassen

Summary Judgment in Telephone Consumer Protection Act (TCPA) Class Action Improper because Text Message may Constitute a “Call” within the Meaning of TCPA and because Triable Issues of Material Fact Exist as to Whether Defendants were “Affiliates” of and therefore Whether Plaintiff Consented to Receive Text Message Ninth Circuit Holds

Plaintiff filed a putative class action against Simon & Schuster, Inc. and ipsh!net Inc. alleging violations of the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227; the class action complaint was filed after plaintiff received an unsolicited text message. Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) [Slip Opn., at 7329, 7332-33]. According to the allegations in the class action, plaintiff received the text message after she became a registered user of “in order to receive a free ringtone,” id., at 7333. Plaintiff had signed up at the request of her minor son, and his initials and first three letters of his last name, her email address, zip code, phone number and account information in order to sign up. Id., at 7333-34. Further, she affirmatively agreed to “receive promotions from Nextones affiliates and brands.” Id., at 7334. Plaintiff thereafter received a text message from Simon & Schuster, sent by ipsh!, promoting the sale of a new Stephen King novel, id. Plaintiff’s number was one of 100,000 cell phone numbers obtained by ipsh! from Mobile Information Access Company (MIA), the “exclusive agent for licensing the numbers of Nextones subscribers.” Id. Defense attorneys moved for summary judgment on the class action claims on the grounds that “(1) it had not used an ATDS [Automatic Telephone Dialing System], (2) [plaintiff] had not received a ‘call’ within the meaning of the TCPA, and (3) [plaintiff] had consented to the message and had not been charged for its receipt.” Id., at 7335. The district court granted the summary judgment “holding that (1) Simon & Schuster and ipsh! had not used an ATDS and (2) [plaintiff] had consented to receiving the message.” Id. The district court did not reach the issue of whether the text message was a “call” within the meaning of the TCPA, id. The Ninth Circuit reversed.

After summarizing the TCPA, the Ninth Circuit held that the district court erred in granting summary judgment because “there was a disputed issue of material fact as to whether the system Simon & Schuster used was an ATDS; (B) the text message was a ‘call’ within the meaning of the TCPA; and © [plaintiff] did not consent to the receipt of such a message, because Simon & Schuster is not an affiliate or brand of Nextones.” Satterfield, at 7336-37. First, the Circuit Court held that the district court erroneously limited an ATDS to a phone system that “produced, or called numbers ‘using a random or sequential number generator.’” Id., at 7337. Based on its analysis of the statute, the Ninth Circuit held that the relevant inquiry is “whether the equipment has the capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator,’” not whether it actually did so in the particular case at bar. Id., at 7337-38. So defined, the Court reversed summary judgment because it found “a genuine issue of material fact with regard to whether this equipment has the requisite capacity,” id., at 7338.

Next, while the district court did not reach the issue, the Ninth Circuit held that, giving deference to the Federal Communications Commission (FCC), see Chevron v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984), see Satterfield , at 7333 and 7340-44, “a text message is a ‘call’ within the meaning of the TCPA” because, even though the TCPA does not define “call,” the FCC “has explicitly stated that the TCPA’s prohibition on ATDSs ‘encompasses both voice calls and text calls to wireless numbers including, for example, short message service (SMS) calls,” id., at 7339 (quoting In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14115 (July 3, 2003)). And finally, the Ninth Circuit found a triable issue of fact as to “consent,” because there was nothing in the record to suggest that defendants were “affiliates” of See Satterfield, at 7344-45. “Thus, [plaintiff’s] consent to receive promotional material by Nextones and its affiliates and brands cannot be read as consenting to the receipt of Simon & Schuster’s promotional material. Accordingly, the district court erred in granting summary judgment.” Id., at 7345. Accordingly, the Ninth Circuit reversed the order granting summary judgment in favor of defense and remanded the class action to the district court. Id., at 7346.

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